Point of sale 1 Point of sale Points of sale at a Target store Marketing Key concepts • Product marketing • Pricing • Distribution • Service • Retail • Brand management • Account-based marketing • Ethics • Effectiveness • Research • Segmentation • Strategy • Activation • Management • Dominance • Marketing operations • Social marketing • Identity Promotional contents • Advertising • Branding • Underwriting spot • Direct marketing • Personal sales • Product placement • Publicity Point of sale 2 • Sales promotion • Sex in advertising • Loyalty marketing • Mobile marketing • Premiums • Prizes • Corporate anniversary • On Hold Messaging Promotional media • Printing • Publication • Broadcasting • Out-of-home advertising • Internet • Point of sale • Merchandise • Digital marketing • In-game advertising • Product demonstration • Word-of-mouth • Brand ambassador • Drip marketing • Visual merchandising Point of Sale (sometimes called POS or checkout[citation needed]) is the place where a retail transaction is completed. It is the point at which a customer makes a payment to a merchant in exchange for goods or services. At the point of sale the merchant would use any of a range of possible methods to calculate the amount owing, such as a manual system, weighing machines, scanners or an electronic cash register. The merchant will usually provide hardware and options for use by the customer to make payment, such as an EFTPOS terminal. The merchant will also normally issue a receipt for the transaction. For small and medium-sized retailers, the POS will be customized by retail industry as different industries have different needs. For example, a grocery or candy store will need a scale at the point of sale, while bars and restaurants will need to customize the item sold when a customer has a special meal or drink request. The modern point of sale will also include advanced functionalities to cater to different verticals, such as inventory, CRM, financials, warehousing, etc., all built into the POS software. Prior to the modern POS, all of these functions were done independently and required the manual re-keying of information, which resulted in a lot Wikipedia:Vagueness of errors. Terminology The most common term used is the Point of Sale, particularly when talking about this area from the customers perspective. However retailers and marketers will often refer to the area around the checkout instead as the Point of Purchase (POP) when they are discussing it from the retailers perspective. This is particularly the case when discussing planning and design of the area as well as marketing strategy and offers, such as chocolate displays at point of purchase. Point of sale 3 History Software prior to the 1990s Early electronic cash registers (ECR) were controlled with proprietary software and were very limited in function and communications capability. In August 1973 IBM released the IBM 3650 and 3660 store systems that were, in essence, a mainframe computer used as a store controller that could control up to 128 IBM 3653/3663 point of sale registers. This system was the first commercial use of client-server technology, peer-to-peer communications, local area network (LAN) simultaneous backup, and remote initialization. By mid-1974, it was installed in Pathmark stores in New Jersey and Dillard's department stores. One of the first microprocessor-controlled cash register systems was built by William Brobeck and Associates in 1974, for McDonald's Restaurants.[1] It used the Intel 8008, a very early microprocessor. Each station in the restaurant had its own device which displayed the entire order for a customer—for example: [2] Vanilla Shake, [1] Large McDonald's POS device by Brobeck Fries, [3] BigMac—using numeric keys and a button for every menu item. By pressing the [Grill] button, a second or third order could be worked on while the first transaction was in progress. When the customer was ready to pay, the [Total] button would calculate the bill, including sales tax for almost any jurisdiction in the United States. This made it accurate for McDonald's and very convenient for the servers and provided the restaurant owner with a check on the amount that should be in the cash drawers. Up to eight devices were connected to one of two interconnected computers so that printed reports, prices, and taxes could be handled from any desired device by putting it into Manager Mode. In addition to the error-correcting memory, accuracy was enhanced by having three copies of all important data with many numbers stored only as multiples of 3. Should one computer fail, the other could handle the entire store. In 1986, Gene Mosher[2] introduced the first graphical point of sale software under the ViewTouch[3] trademark on the 16-bit Atari 520ST color computer.[citation needed] It featured a color touchscreen widget-driven interface that allowed configuration of widgets representing menu items without low level programming.[4] The ViewTouch point of sale software was first demonstrated in public at Fall Comdex, 1986,[5] in Las Vegas Nevada to large crowds visiting the Atari Computer booth. This was the first commercially available POS system with a widget-driven color graphic touch screen interface and was installed in several restaurants in the USA and Canada. ViewTouch POS widget-driven touch screen GUI Point of sale 4 Modern software (post 1990s) In 1992 Martin Goodwin and Bob Henry created the first point of sale software that could run on the Microsoft Windows platform named IT Retail.[6] Since then a wide range of POS applications have been developed on platforms such as Windows and Unix. The availability of local processing power, local data storage, networking, and graphical user interface made it possible to develop flexible and highly functional POS systems. Cost of such systems has also declined, as all the components can now be purchased off-the-shelf. The key requirements that must be met by modern POS systems include: high and consistent operating speed, reliability, ease of use, remote supportability, low cost, and rich functionality. Retailers can reasonably expect to acquire such systems (including hardware) for about $4000 US (2009) per checkout lane. Hardware interface standardization (post 1990s) Vendors and retailers are working to standardize development of computerized POS systems and simplify interconnecting POS devices. Two such initiatives are OPOS and JavaPOS, both of which conform to the UnifiedPOS standard led by The National Retail Foundation. OPOS (OLE for POS) was the first commonly adopted standard and was created by Microsoft, NCR Corporation, Epson and Fujitsu-ICL. OPOS is a COM-based interface compatible with all COM-enabled programming languages for Microsoft Windows. OPOS was first released in 1996. JavaPOS was developed by Sun Microsystems, IBM, and NCR Corporation in 1997 and first released in 1999. JavaPOS is for Java what OPOS is for Windows, and thus largely platform independent. There are several communication protocols POS systems use to control peripherals: • Logic Controls • Epson Esc/POS • UTC Standard • UTC Enhanced • AEDEX • ICD 2002 • Ultimate • CD 5220 • DSP-800 • ADM 787/788 • HP There are also nearly as many proprietary protocols as there are companies making POS peripherals. EMAX, used by EMAX International, was a combination of AEDEX and IBM dumb terminal. Most POS peripherals, such as displays and printers, support several of these command protocols in order to work with many different brands of POS terminals and computers. Cloud-based POS (post 2000s) The advent of cloud computing gave birth to the possibility of POS systems to be deployed as Software as a service, which can be accessed directly from the Internet, using any internet browser. Using the previous advances in the communication protocols for POS's control of hardware, cloud-based POS systems are independent from platform and operating system limitations. Cloud-based POS systems are also created to be compatible with a wide range of POS hardware. Cloud-based POS systems are different from traditional POS largely because user data, including sales and inventory, are not stored locally, but in a remote server. The POS system is also not run locally, so there is no installation required.[7] Point of sale 5 The advantages of a cloud-based POS are instant centralization of data, ability to access data from anywhere there is internet connection, and lower costs.[7][8] Cloud-based POS also helped expand POS systems to mobile devices. Industry Retail industry The retailing industry is one of the predominant users of POS terminals. A retail point of sale system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a conveyor belt, weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more POS monitors use touch-screen technology for ease of use and a computer is built into the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units liberate counter space for the retailer. The POS system software can typically handle myriad customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, BOGOF (buy one get one free), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types. The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. "Back-office" computers typically handle other functions of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store sales information for reporting purposes, sales trends and cost/price/profit analysis.