Traditional POS is Dead

Traditional POS is dead -- I've heard that one before. Here's an excerpt from Joe Skorupa's blog over at RIS where he relayed ten trends that were presented at NRF.

7. Mobile POS signals death of traditional POS.
Shoppers don't love self-checkout, but they prefer it to long queues or dealing with associates. Fixed POS is expensive and bulky. Mobile POS frees floor space for other purposes and converts associates from being cashiers to being sales assistants that provide new levels of customer service and incremental basket sales. In addition to unplugging the POS, new alternatives are starting to take hold - thin client, POS as a service, and replacing POS software with e-commerce platforms.

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I'll grant that in some situations for some retailers there might be an opportunity to to ditch the traditional POS, but for the majority of retailers that's just not practical. Take it from a guy that had to wake up at 3am after every Thanksgiving to monitor POS systems across the US on Black Friday. If a retailer's website goes down on Black Friday, they will take a significant hit. If a retailer's chain-wide POS system goes down on Black Friday, that retailer will cease to exist.

Mobile POS works great for Apple because the majority of purchases are one or two big-ticket items that don't involve cash. There's still a traditional POS in every store to fall back on (its just hidden). Try this at home: Choose your favorite e-commerce site and add an item to the cart while timing how long it takes. Now multiply that by 15 to represent the 15 items you might buy at store like Target. The user interface isn't optimized for bulk purchases, and that's how it should be. The webstore and POS are designed for different purposes.

Self-checkout is a great addition to POS and so is mobile checkout. But they add capabilities to POS, not replace it. Centralized architectures, even those based in the cloud, are quite viable as long as there's resiliency in the registers. You cannot assume perfect access to the network, so a POS must always be able to sell regardless of connectivity.

Clearly the different selling channels should be sharing common functionality. Things like calculating tax, accepting coupons, and processing electronic payments can be shared, usually through a service-oriented architecture. This lowers costs and providers greater consistency, both of which help retailers.

On paper these technologies look really good and we should continue to push boundaries, but I'm not ready to call the patient dead just yet.

Comments:

So if POS is not dead, why hasn't Oracle made more effort to integrate it's POS system with it's premier back office system (EBS)? The POS works great standalone, but in today's world it doesn't stand alone all the time. It must be integrated with the other components of the enterprise in order to be truly useful. Pricing, inventory, and order management are only a few of the things that are typically kept in EBS but need to be accessible from the POS. Rolling up sales transactions for true corporate reporting from the EBS or even further upstream, the analytics engine, needs to happen as well. This is one area that Oracle needs to focus on in order to truly make their POS solution an enterprise solution. Instead they have left this major piece of integration work to their customers, if they have the means to tackle such a project.

Posted by James Johnson on February 07, 2011 at 06:10 AM CST #

James, excellent question. The Oracle POS is fully integrated with the Oracle merchandising, inventory, and reporting systems that are specific to retail. There is also an integration that pushes from the merchandising system to the financial sub-systems of EBS and PSFT. However, the POS is not directly integrated to EBS out-of-the-box as you pointed out. While this has not been in high demand from our traditional customer base, we do offer this integration through our partner network and a number of customers are using it in production today. As we encounter more demand, I'm sure the integration will move higher on the list as a candidate for base product.

Posted by David Dorf on February 07, 2011 at 09:13 AM CST #

I agree that it may not be possible to provide out of the box integrations with every Oracle product at the back-end. Ebiz, Siebel, Agile, third-party WFM products, etc - the list goes on. Partners can do this very well for Oracle's customers.

But the POS needs major feature enhancements - esp for grocery stores where there is a need to weigh the goods being sold, the ability to put the POS on the web as an e-commerce platform instead of using another platform and then integrating that with ORPOS.

Posted by Shankar V on February 07, 2011 at 06:51 PM CST #

Shankar, perhaps its lacking for grocery, but it's certainly full-featured for softlines, hardlines, and specialty. Grocery is just not our target market for POS today.

Posted by David Dorf on February 08, 2011 at 09:13 AM CST #

Hi, With my experience i have seen Distributed mechanism works better in retail environment, the reason being the availability management and the shop upfront selling without distruption in case of server availability . Even in the case of ORACLE they have store back end servers to serve the purpose . But the approach towards the future is more on smart clients and the POS should be enhance to accomodate the same , where the client itself provides the thick and thin features embedded . It works with analytical or order or other retail necessry features as anyother system which is online and centralised .In the absence of connectivity the major part of the retail activites can be achieved. Oracle is doing lot of R&D so the move will be always comprising the best in the industry . But out of the box always caused issues with Many retail implementations .I presume with the experience they gather from each project is helping them to go better.

Posted by George John on February 09, 2011 at 11:03 PM CST #

George, the nice thing about Oracle's POS is that its an n-tier architecture that can be configured using XML. You can run all tiers on the register, split them between the register and an in-store server, or split them further between register, in-store server, and centralized server. Additionally, there's all sorts of resiliency built in that ensures selling can occur during various states of network outage. So the register can be thin, trim, or thick depending on the situation.

Posted by David on February 10, 2011 at 12:23 AM CST #

Traditional POS will continue until there is strong technology replacement that provides reliable service capability both online and offline, that can bear dust and spills at the counter.

Meeting the expectation of the 2 key POS stakeholders globally
1) Customer 2) Cashier.

I still see a long way to go for providing POS as a Service on a global market. POS has to provide comprehensive choice/configuration for the following parameters,

- Various retail format support
- Comprehensive Localisation
- Flexibility to integrate with enterprise and peripherals

Reality is traditional POS is living!

Posted by Palani Selvam on February 11, 2011 at 07:21 PM CST #

Mobile POS is good for speciality stores. Traditional POS is for general stores.

Many places are yet to have an integrated retail solution.

So, Traditional POS is active now. It will die out to mobile POS in a decade or so.

Posted by LATHA on March 23, 2011 at 02:52 PM CDT #

another option is thin POS where you have all POS functions in a server in the store and provide POS tills as before with a smaller footprint. This will allow for redundancy in case of a network failure, the individual stations can still continue to operate.

Posted by Ven Kumar on April 15, 2011 at 06:39 AM CDT #

Does Oracle has any Mobile POS offering as part of their Retail Product Portfolio / Oracle POS product offering?

Posted by Varghese on July 15, 2011 at 02:27 AM CDT #

Varghese, yes. Oracle provides Mobile POS on the iPod Touch via partners.

Posted by David Dorf on July 15, 2011 at 02:31 AM CDT #

POS is not dead and what does Oracle have to do with it? And, how many real stores do you see with mobile and how many have a POS system. A typical geek what's happening now attitude. Doesn't work in the real world. But, apparently that is not where you live.

Posted by guest on August 16, 2011 at 12:48 PM CDT #

POS is fundamental to retail outlets in South Africa. Interesting article thanks for posting!

Posted by guest on January 09, 2012 at 09:32 PM CST #

Traditional POS from what I heard from some people is not totally dead but some just stop using them probably for the time being. POS be it traditional or not is just the same, it makes businesses improve and gives them proper management...

Posted by cafe software on March 14, 2012 at 03:34 AM CDT #

It is not dead. It is not dying. Oracle is a nightmare. Don't believe me, get in your car and go to 10 stores. I will bet that 100%, not 50% or 25% have a traditional POS system. Now do the same with restaurants, hardware store or any. More internet faux information.

Posted by guest on June 28, 2012 at 09:38 AM CDT #

Did you even get past the title and read the post?

Posted by David on June 29, 2012 at 12:51 PM CDT #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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