booming national economy, and the growing acknowledgment of the labor-saving benefits associated with improved PC-based POS systems. Labor is near the top of the expense column in most retailers' balance books.
The new POS systems offer increased integration as well as new capabilities, such as sales-figure consolidation and the automatic organization of disparate data. POS cl
ients at a register record everything from individual consumer-buying patterns to the effectiveness of shelf-space allocation.
But retailers want systems that go beyond simply capturing point-of-purchase information -- they want integration with back-end client/server systems (e.g., SAP's R/3 suite and Vantive's customer-service automation software) as well as support for their existing investment in PCs running Windows and servers running Unix or NT. They also want to increase communication between their sales force and management by providing capabilities such as e-mail at POS stations. In short, resellers are being asked to provide PC-based POS service that fits into a company's existing IS architecture.
Four important technologies are ushering in the PC POS revolution: new GUIs, RF labels, adherence to client/server application APIs, and easy integration with back-office systems. In addition, a single technology, Java, currently stands poised to make the biggest difference of all by connecting
a POS station to a Web-based infrastructure (and leveraging such new technologies as Web-based data warehousing), although it's not there yet.
The New Interface
Most proprietary POS systems don't share a common user interface (UI). This means that, even if a company hires a person who has experience working at a checkout, for example, it's going to have to train that person to use a new system. But PC-based POS systems with standard UIs are changing all that. They're enabling companies to cut training costs and even create self-shopping systems.
The leading example of a no-training-required system is the ATM machine. NCR's DynaKey (
see the photo
) is an ATM-style POS interface that many vendors are currently using precisely because it's so easy to learn. Says Dan Bogan, vice president of retail marketing for the NCR Retail Services Group, "We've combined our ATM technology and PC-based technology and then connected that to our high-performance scanners. Together it p
rovides consumers with an interface that they're very comfortable working with."
DynaKey is the main competitor to Microsoft Windows, the other easy-to-learn POS interface. Both offer an intuitive, graphical interface that accommodates complex promotions and pricing structures and allows for the near-elimination of POS training.
Looking to the future, the model of an open-system ATM will be extended by even-newer technology emphasizing self-service capabilities. The vision, which is expected to be delivered sometime in late 1998, is entirely self-service check-out lanes. NCR intends to execute such a system by combining bioptic scanners and self-checkout software with a video-based security system.
Supermarket Frequencies
Another technology that is more easily integrated into the PC architecture than it is into legacy systems is RF pricing labels. This market is shared mainly by four vendors: ERS (Wilton, CT), NCR, Sweden-based Pricer, and TelePanel (Toronto, Ontario, Canada).
Retailers use RF to electronically update shelf labels, replacing the familiar paper shelf tags and eliminating the need for store employees to walk through the store aisles with infrared readers to note price changes. Instead, new prices are transmitted from antennas located at the ceiling of the store. To avoid confusion should several neighboring stores all implement RF, each store gets its own signal. The systems are surprisingly simple because they often are available as prepackaged products.
RF is credited with increasing price-tag accuracy while accelerating the response time for stores that are eager to react to their competitors' sudden promotions or price hikes. RF is a proven technology that has actually been available for some time, but demand remained sluggish at first as a result of the dominance of proprietary systems and regulatory prohibitions that relegated RF to stores in only a few states.
During the past year, CB Consultants, a company that specializes in RF technologies, has
seen the use of RF expand in tandem with the rise of PC-based POS. "Stores are seeing RF as a way to change prices whenever they want, either from the PC in the back room or from the warehouse," explains George Gilfoil, president of CB Consultants.
Likewise, the rise in popularity of back-office client/server applications, such as supply-chain software from Manugistics, has led resellers and system integrators to use PC-based POS systems that offer more seamless integration between RF and PC-based POS. Resellers might develop software to transmit data retrieved from single-use POS devices into distributed databases, but it's a strictly one-way exchange, according to
Dave Sabre
, regional partner of the western region for consumer markets at KPMG Peat Marwick. Non-PC POS devices are designed to send data to the back-end database, where the information is crunched by on-line analytical processing (OLAP) systems, such as Arbor Software's Essbase, into useful, compacted sales figures.
Connecting the Back Office
But in the new PC-based POS systems, information is like a two-way street; it runs both to and from the executive suite. By returning processed information back to the store manager, employees at the cash register are empowered to make use of sales and pricing data on their own.
"POS should be just one of the functions of the corporate LAN," explains Sabre. "We have them running HR systems, payroll, and benefit enrollment in addition to POS. The expansion of the features of POS on the PC is what gives us the ability to say to companies that they can improve customer value with these systems."
With the PC, continues Sabre, resellers can get more creative with their services, such as offering interfaces to Internet-based electronic commerce sites and data warehouses, as well as developing middleware to shorten the supply chain.
Future POS
PC-based POS is doing well and will do even better, say industry figures, when it can take advantage of a
thin-client configuration. That would likely mean Java. However, despite the move to open systems, many companies continue to require POS peripheral devices that remain incompatible with open-development platforms, including Java. Even though some POS vendors are currently working on designing Java interfaces for devices, the technology isn't yet available.
"There's a lot of interest right now in the thin client and its impact on point of sales," says Tracy Flynn, vice president for the food-industry-marketing group at NCR Retail Services Group. He points to several expensive qualities of the PC that aren't required for traditional POS, such as access to a disk drive, and then points resellers to the future potential of the network computer or NetPC as excellent alternatives.
"Initially, we won't see these kinds of standards applied to POS; it's still 12 to 18 months out," he predicts. "However, in some markets, such as the hospitality industry, you'll see it sooner because they have fewer periph
erals with which to contend."
By turning to PC-based systems for POS solutions, resellers are betting they will find gold in industry-standard PC development environments, such as Visual Basic and Java. In addition, their customers will enhance their information-retrieval-and-analysis tools by leveraging the increased integration between their POS wares and their client/server application investments.
Where to Find
CB Consultants
Portland, ME
Phone: 207-799-2702
KMPG Peat Marwick
Boston, MA
Phone: 617-723-2700
Internet:
http://www.us.kpmg.com/
Making Money with Point-of-Sale
