Small business essentials: Point of Sale

Microsoft's Retail Management System is bundled with point-of-sale hardware from Hewlett-Packard.

NCR's RealPOS 30 is a thin-client point of service system.

There are more than 1,000 point-of-sale systems available today, and a good one that combines the right hardware with software that can be updated is an essential business tool. Many of the point-ofsale packages that are available are PCbased, and user friendly, giving distributors a variety of choices for their countertop operating platforms. In addition, some of the biggest names in computing are targeting the smaller distributors and retailers who are moving to PC-based systems.

As small businesses, gas and welding product distributors have the opportunity to improve efficiencies at their sales counters by using these technologies. While the information technology giants — the Microsofts, the IBMs, and the NCRs of the world — design this software and hardware as generic "retailing" products, it is readily adaptable for use in distribution businesses.

Retail is the largest segment within the small business category, and single-store retailers account for 98.8 percent of all retailers, according to Microsoft Corp. (www.microsoft.com). That makes small retailers — and welding industry distributors are a part of that market — an important target for the giants of the information technology industry. A recent survey shows that 65 percent of retailers use some version of Microsoft's Windows software as the basic platform for point-of-sale software. That same survey by IHL Consulting Group (www.ihlservices.com/ihl), a research and advisory firm for technologies deployed in the retail and hospitality industries, also found that 20 percent of all installed point-of-sale systems run on MS-DOS, which is considered out-of-date. The IHL survey also determined that 30 percent of all retailers are planning to replace their point-of-sale system in 2006. While the data does not refer specifically to welding suppliers, and it is believed that a smaller percentage of welding product distributors have adopted point-of-purchase technologies for their sales.

However, some distributors are considering purchasing a complete point-of-sale system or updating parts or all of their current system.

With the results of that retailing survey in mind, distributors will not be surprised to know that Microsoft Corp. now is targeting them among many retailers with its new, entry-level point-of-sale application called Microsoft Point of Sale, and two rivals in point-of-sale equipment and computers — NCR Corp. (www.ncr.com) and IBM Corp. (www.ibm.com) — also are offering new or updated entrylevel point-of-sale systems.

Replaceable hardware
Historically, companies such as IBM Corp. catered to large enterprise retailers with numerous stores. But in the wake of the dot-com bust and the realization that one-store retailers amount to big business, the giants in the information technology industry added small businesses to their marketing strategies and their product development plans.

Alan Outlaw, IBM Corp's director of SMB, Retail Store Solutions, says IBM is focusing the experience it gained from working with large retailers on the needs of smaller retailers. "We understand that in retail, regardless of customer size, you can't be forced into making a purchase of a whole, new point-of-sale system based on the need to buy one new thing, such as a printer," says Outlaw. IBM, NCR and Microsoft have developed modular point-of-purchase products that allow distributors to purchase items one-at-a-time with the goal of connecting them in a single point-of-purchase system. Those modular products — whether they are hardware or software items — provide smaller operations protection for their investments. In terms of hardware, that investment protection includes considerations for equipment reliability to the ability to expand the systems as the business grows.

That concept is a marketing strategy for those large companies, but it is important for the business-savvy distributor who is considering making the leap from electronic cash register to PC-based point-of-sale system.

Retailers keep their point-of-sale systems an average of seven to 10 years, says Carrie Smola, NCR's manager for point of sale hardware. For that reason, companies like NCR and IBM work with their suppliers, such as computer chip maker Intel Corp. (www.intel.com), to create point-of-sale platforms that support older technologies, yet take into consideration emerging technologies. "We put in legacy and emerging technology so that retailers can move into the future without replacing an entire system," says Smola. She's talking about scalability — the ability of a system to grow or change along with the business.

For example, Microsoft and IBM are offering a pointof-purchase hardware and software bundle that includes Microsoft's Retail Management and Windows XP software and IBM's SurePOS, along with other peripherals including an LS22 barcode reader from Symbol Technologies Inc. (www.symbol.com). If the retailer decides later to upgrade the barcode reader, he would need only to install the software for the new reader, then plug it in. Similarly, NCR has a point-of-purchase package that it calls RealPOS 30, that can be configured as a very simple solution for the smallest distributor or as a complex system to handle the largest operations. The Microsoft, IBM and NCR packages have investment protection, in that they are designed to be easily upgraded and to support older technologies.

Casio Inc. (www.casio.com), Dig-PoS Systems Group (www.digpos.com) and Hewlett-Packard Co. (www.hp.com) similarly joined forces with Microsoft to launch hardware solutions that feature Microsoft's point-of-purchase applications. Casio offers a QT-8000CW-MBW pointof-sale touch-screen terminal that is designed for one-store operations.

Hewlett-Packard offers its HP rp5000 POS PC-based system, and DigiPoS introduced a point-of-purchase product with cable management and powered serial ports equipped with Intel technology.

What this means for distributors is that they can purchase an entry-level point-of-sale hardware system, then upgrade parts of it as their needs increase and as their finances permit.

Microsoft's offering
The launch of Microsoft Point of Sale 1.0 in 2005 made it clear that Microsoft was targeting small retailing businesses. The application was designed for retail operations as small as one store with one cash register, and without a server. Even as a bare-bones application, Microsoft's Point of Sales software could track and manage sales, and manage inventory and customer information.

A few months after its introduction, the company made a tiny piece of free software available — its Office, Small Business Accounting 2006 and Point of Sale/Retail Management System Connector. That program bridged the gap between point of sales and accounting software. Sometimes referred to as a plug-in or add-on, that software allows users to join point-of-sales data with accounting programs, including Intuit Corp.'s (www.intuit.com) Quickbooks, an accounting program that is widely used in small businesses. The software bridge eliminates timeconsuming entry of data into accounting applications.

Distributors who are interested in the Point of Sale software can check it out at Microsoft's website, where they can view a demonstration and check the compatibility of the application with their current point of sale hardware.

A new Windows
Small distributors who have not upgraded their software because of concerns about the vulnerability of the Windows XP software to malicious programs such as spyware, viruses and Trojan horses may be interested to know that Microsoft expects to release in November its Windows Vista Business program, an operating system designed for businesses.

Microsoft says the Vista operating system features a built-in firewall to monitor outgoing and incoming network-traffic, and security improvementsto Internet Explorer 7 (including a filter that warns Internet surfers that a Web site about to take personal data may be malicious). Microsoft says these features will help to protect business data that is maintained on computers.

Microsoft has set up an Internetbased utility to help business owners and managers to decide if their computer systems can support Windows Vista. The utility lets potential users select from eight categories of features, and recommends a version of Vista that may be applicable. It can be found at www.microsoft.com/windowsvista/getready/upgradeadvisor/default.mspx. That utility also will scan a system with Windows XP software, and identify hardware and software that might need to be upgraded.

Small business storage Small-and medium-size distributors may need data storage tools, and Zetera Corp. (www.zetera.com) says its Hammer Z-Series of data storage provides small-and medium-size distributors a simple storage system that is easy to use and relatively low in cost. The company charges $1,299 for a model with the capacity to store 1 terabyte of data. As an alternative, data storage providers such as EVault Inc. (www.evault.com) offer subscription services. Recently, Carbonite Inc. (www.carbonite.com) began offering a subscription service for less than $5 a month for up to 40 gigabytes of data backup. Backups take place when a computer connects to the Internet over cable or DSL, and data is encrypted and stored on those companies' servers.

 

Remote deposit terminal Businesses that receive large numbers of checks as payments may want to consider remote deposit terminals. These terminals, along with debit and credit card terminals, are used with point-of-sale systems. The terminals also eliminate float time, the time between the date on which a check is deposited and the date on which the money transfers to the depositing account. Some distributors have check scanners, but that technology does not allow for the deposit of checks. With the advent of the (Federal) Check Clearing for the 21st Century Act (Check 21), retailers and banks now can use remote deposit technology to process checks more quickly. The law does not require banks to accept checks in electronic form, so distributors who want the technology must check with their financial institution.