The Point of Sale (POS) as we know it is a very old and closed system. The incumbent in the (hospitality) POS market, MICROS systems was founded in 1978. However the POS has seen very little innovation since then. There are some fundamental issues with today’s POSs:
According to costhelper,
- Retail or restaurant single-register “starter kits” range from $1,500-$2,500; more elaborate, multiple-station systems with features such as touch-screens, automatic ordering and sophisticated reporting capabilities can cost $15,000-$20,000 and up.
- IBM has POS systems starting around $1,999-$2,499, but costs can increase up to $4,000 or more per station.
- Microsoft offers its Retail Management System starting at $1,290 for a single store with one cashier’s lane.
- QuickBooks sells its Basic POS software for $800, a Pro system for $1,050 and a multi-store version (up to 10 sites) for $1,400; with hardware included, prices start at $1,750.
Unless bought through a reseller, some of these do not factor in the cost of installations, upgrades, deployment or support.
Many POS systems do not have a development platform. This severely limits the ability for 3rd parties to come to the POS. OpenTable, Shopkick and Groupon are some of the apps that come to mind that have made their way to the POS. Some time back, my friends and I did extensive research into this area.
Building an app for an exiting POS is non-trivial, if not entirely impossible.
This is not something you can move around easily. An iPad is an example of something that can be moved around easily.
4. Upgrades are not seamless
Like many other hardware+software systems that was built in the 90s, these POSs were not built for easy software upgrades. An upgrade to a POS involves downtime and can rarely be done in-house without the help of the POS vendor or reseller.
5. They Suck
When you walk in to a retail store today, you’ll likely see a very single purpose clunky system with some seriously shady software (that looks like it was built in the 90s).
Everyone knows what an iPhone app is today – what if this notion of an ‘app’ came to the POS. Imagine an entirely web based POS that had a lightweight HTML/CSS/JS “widget” based app platform (somewhat like the Facebook platform, but not as heavy weight, for starters at least). The POS can enable a marketplace for app developers to build apps that can be easily “installed” on to a POS. Imagine how easy it would be then for Foursquare or Venmo or Paypal or Perkville or a Bill-Splitter app or an E-Receipt app to come to the POS. This would solve #2, Extensibility.
I know of several 3rd parties who will pay a nice premium to get on to a POS (I’m saving you the details here, but I’ve done plenty of research in this area). And these guys are having to do some serious workarounds because of the pain involved in building something for an existing POS. Here’s an example of an iPad that Perkville gave to our neighborhood coffee shop (the founder of Perkville shares the pain of the POS not being as extensible):
I wasn’t sold when I first heard of Square. Square only appealed to small/tiny businesses I thought. And these guys are a nightmare to market and sell to. Startups have failed because of the challenge it takes to market and sell to small businesses. But this tweet by Chris Anderson the other day piqued my interest: