Why Better POS Is Vital To Saving SMB Retail

New Orleans, home to the PYMNTS Bureau of Temperate Winter, is loved and sometimes reviled for being behind the times on many things. That can often include payments. But over the last year or so, a wave of point-of-sale (POS) upgrades has seemingly hit many of the small vendors here, whether sellers of food via pop-up restaurants, handmade jewelry or art. Transactions that were once more likely than not to require cash — at least in the non-tourist areas of the city — have now gone pretty much digital.

That’s just one example of how POS innovation is filtering down to the world of small and medium-sized businesses (SMBs) everywhere — and how, in turn, better POS technology and deployment are making for richer consumer experiences. The trend promises to heat up even more in the 2020s, and in a new PYMNTS interview, Butch Langlois, president, North America, for cloud-based retail management software seller Vend, provided an in-depth tour of those changes and a glimpse of what’s to come.

“There’s been very little POS innovation for a long time,” he said, echoing similar comments from other payments and retail experts over the last few years — comments that underscore the big changes happening now, and the big changes certain to come in the new decade that starts in a few months. The norm for so long, Langlois added, involved cumbersome frustration. “You had big clunky terminals, you had to have I.T. groups, and you had to call in people when it crashed.” And the work was usually more time-consuming and expensive when it came to SMBs.

POS Trends

None of this is news for PYMNTS readers. But that trip down memory lane is worthwhile only to remind ourselves of how much is indeed changing. Recent PYMNTS research puts an even finer point on the issue, and from the point of view of the restaurant industry.

The average American ate out 185 times in 2018 — dropping from 216 times in 2000. Restaurants looking to compete against meal kit subscriptions and online grocers are increasing their patronage by accelerating and improving their services. New technological strategies, including exploring the potential of mobile point-of-sale (mPOS) systems to provide speedier in-house experiences, can help eateries better attract and retain customers who have grown used to the convenience of other food services.

After all, waitstaff traditionally have to make several trips between fixed POS terminals and guests’ tables when collecting orders and processing payments. Portable mPOS systems can help trim the number of trips staff must make, improving both efficiency and service. Staff can use such tools to take orders and send them directly from the table to the kitchen. Employees can then use the systems to accept both payments and tips when guests are ready to leave, making more efficient use of waiters’ time and improving customers’ experiences. Kitchen staff can use the product to notify servers when their orders are ready, enabling speedy delivery to the table.

That’s just one example of many about the increasing importance of better point-of-sale systems — and the management tasks attached to those systems — to commerce and payments in the 2020s. And as the costs of such systems become affordable to ever smaller businesses — you can thank the cloud for much of that — more operations will face the choice of buying in to the new POS world, or perhaps losing ground to competitors, according to Langlois, among other experts. “It’s a lot cheaper,” he said.

These days, of course, it’s not just about the payments. It’s not even about the payments experience, not really. It’s about providing a full consumer experience while bringing more digital and mobile efficiency to back-end business operations, he told PYMNTS. “It’s all the stuff you have to run your business on the back end,” Langlois said, referring to such areas as inventory management and daily, and automated, reconciliation. All are big tasks for SMBs. “How are you cashing out at the end of day?” he said. “How are you getting that information into an accounting system?”

Integrated Payments

Integrated payment also is a vital, POS-related task for SMBs going forward into the 2020s. “Integrated payment allows them to save a lot of time reconciling items,” Langlois said. “It makes sure there are fewer mistakes.” Flexibility plays a big role, too, in this evolving world of POS and related experiences. “When you build in the cloud from scratch, it gives you the ability to design your product with more flexibility,” he said. That holds special importance as the market gets more and more complex, he said, with different jurisdictions having different regulations involving taxes and other business-critical tasks. Flexibility also matters when designing loyalty programs — along with building better consumer experiences, loyalty and rewards are taking on more importance in retail and payments.

The new world of POS will help brick-and-mortar retailers stand on stronger feet in the coming decade, according to the view of Langlois. “They say the storefront is dead, but I actually see a pushback,” he said. Better POS systems, after all, enable a retailer’s workforce to become more mobile, which can lead to better customer engagement, more sales and a more rewarding shopping experience overall. That thesis will undergo another round of big testing before too long. After all, not only can mobile POS tech enable the creation of pop-up stores during the busy fourth-quarter holiday shopping season, but enable SMBs to hire a few more associates without having to build new checkout lanes.

This is an exciting time for payments — to put it mildly — and this new world of POS is a big reason for that.