It might be surprising to learn that a great number of smaller convenience store retailers in the U.S. don’t have a point-of-sale (POS) system at all, according to Software Advice, an information resource firm that counsels software buyers.
“It doesn’t make sense when you consider the affordability and the benefits of all the POS systems in today’s market,” said Justin Guinn, a research associate for Software Advice, based in Austin, Texas.
Considering the added complexity that industry standards like PCI compliance and now U.S. EMV (Europay, MasterCard, and Visa) implementation put on merchants, having the mobility to add for line-busting and pay-at-the-pump, integrated payments, loyalty and better reporting capabilities seems a natural fit for a c-store’s toolbox.
How much a c-store invests in POS depends on the retailer’s needs. IBM has basic POS systems starting around $1,999-$2,499, but costs can increase up to $4,000 or more per unit. Microsoft offers its Retail Management System starting at $1,290 for a single store with one cashier’s lane.
There are several reasons a retailer with no POS technology will finally invest in a system, and the top one is often inventory management.
“They’re looking to automate previously tedious manual processes,” said Guinn. “Rather than having to count the inventory themselves and tracking it on an Excel spreadsheet, retailers are looking for software that will automate that functionality.”
The next most popular requirement is sales reporting and analytics that will provide more transparency into the business. “If they’re doing well, this feature tells them why,” Guinn said. “If the business isn’t doing well, that information is just as valuable to help them correct course.”
“Brick and mortar merchants with only one store and thousands in inventory will be under pressure to upgrade to a full system, but I believe they will get there through an interim step of using a counter top EMV capable credit card unit,” said Russell Gibson, manager of marketing technical services for Sinclair Oil Corp. of Salt Lake City. “Over the next few years, the price for a fully-integrated system should drop as tablet technology is integrated to the POS. This is when those that can benefit from such a system will buy one. Of course, you can lead a horse to water….”
WHAT ABOUT MOBILE?
There’s no doubt that mobile point-of-sale (mPOS) hardware and software is the coming trend. However, not a lot of POS shoppers are looking for the technology to accept mobile payments because most customers aren’t demanding it yet.
“What could be more convenient than pulling out your phone and tapping it and completing a transaction,” Guinn said. “But it still seems to be ahead of the curve. No one retailer has really cracked the code yet or even put a lot of resources behind it.”
During the next five years, Guinn predicted that the current core requirements for a POS will remain static. “If you have these in place, they’re the building blocks for everything else,” he said.
The next tech challenge for convenience retailers will be the 2017 deadline for EMV payment technology at the pumps. “It’s going to be really expensive to get all those terminals to be compliant,” Guinn said. “I’m curious if a majority of gas stations will heed the call and become EMV compliant. Or if they don’t think it’s worth the investment and just keep what they have.”
Stay tuned to Convenience Store Decisions‘ March issue, where we delve into 38 in-store categories to identify emerging trends and garner retailer analysis to forecast what operators can expect for 2016 and beyond.