New EPOS Where's The Return On Investment

Most retailers are on their second or third generation of EPOS systems and many are gearing up for their fourth. The very early adopters, mostly in the US, deployed IBM’s 3680 system, large and bulky by today’s standard and using a very proprietary IBM operating system. IBM 3680 made little traction in Europe. 

Then IBM launched the IBM 4680, a greatly improved product that became widely installed around the world and was joined by proprietary systems from other companies, such as NCR, ICL, Nixdorf, Hugin Sweda and TEC.

Many followers started deploying EPOS systems at this point, so they started with second generation systems.  Then, along came Windows based point of sales systems, the third generation of EPOS systems.

When retailers went from their first to their second generation, most of them struggled to make a quantified business case based on sales increases or cost savings. The major benefits were taken with the first generation they deployed. When the second came along, the technology was better and cheaper, but there were few hard benefits other than cheaper maintenance.

Now, the fourth wave is being deployed or actively considered. This time it’s more like the first time.

Some people refer to this wave as Unified Commerce. This means that due to the development of omni-channel retailing, the same fundamental application can be deployed on the web site as the e-commerce engine, on the POS terminal as the POS software application, on a tablet in the store as a mobile POS or customer service device and on a smart phone for the customer to practice self-service. To be truly unified commerce, it means enabling a consumer to search on your web site, capture details of what they are interested in, be able to pick up that information when they arrive in store and carry on from where they left off last time. This means that you need some kind of customer recognition capability. We’ll talk more about that in a future article.

Another view of this wave is that it is about much more than POS transactions. It includes at least some of the following:

  • An intelligent approach to managing click and collect orders and the associated add-on selling opportunity in store
  • If a required item is out of stock where the consumer is now, having the ability to locate that stock wherever it might be in the chain and either reserve it remotely for the customer to collect, have it delivered to the customer or transferred to the local store to collect. Ultimately, this includes visibility of goods “on the boat” and being able to reserve them in the same way. Many people refer to this as having a single stock pool.
  • Offering some of the services available in web applications on the POS devices, tablets and smart phones in the store. These include recommendations (people who bought this also bought this), past customer feedback, a “look book” to educate or guide customers on what to pair with a potential purchase to make an outfit or create a look and full scale clientelling. We’ll feature Outfit Builder approaches and clientelling in future posts.

Finally, there’s the way the solution is delivered. For most of the lifetime of EPOS solutions, the only way to deliver has been via dedicated systems installed in each store with the essential communication back to the central systems to update prices, products offered, etc. For some time, smaller retailers have been deploying EPOS via a cloud service using companies like Cybertill. Now, more and more bigger companies are starting to deploy cloud solutions. It’s still not feasible for high throughout large format environments like supermarkets, where individual cashiers need to scan over 900 items an hour on a Friday evening, but it’s highly feasible in speciality stores where the transaction rate is much lower.

But the original question was Where’s the return on investment?

Quantifiable benefits come in a number of areas:

  • Retailers with a well-developed click and collect process supporting add-on selling have been able to add up to to 19% on click and collect sales volume.
  • Retailers allowing customers to order an out of stock item via a sales colleague with a tablet have seen sales increases of up to 10% of store sales.
  • Retailers deploying clientelling well have grown store sales by up to 15% over a 4 year period. They can get to 5-7% sales growth in two years.
  • Cloud based solutions save cost in several ways. Disaster recovery or business continuity costs can be a lot smaller. Upgrades to functionality can be done so frequently, that they are very small and can mostly be communicated with an email. This saves a lot of large costs associated with once yearly or every two-year upgrades and all they entail. Costs can be scaled up or down as stores open and close. Finding large amounts of Capex for the next investment can be avoided.
  • Running off a unified commerce platform makes it easier to follow a customer through their life cycle with you and to deploy solutions like clientelling when the customer buys elements of their wardrobe in multiple channels. This improves sales team productivity.

Keep an eye on our blog for future articles which will develop some of the points above. 

Posted by Brian Hume
27th September 2018

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