Ask HN: Why are POS systems all POSes?
Is it because POS is not as easy as it seems? Surely someone in the last ten years would have figured it out, though.
Is it because the users don't understand how to use the systems properly? How then have we gone ten years without some startup pitching My First POS, and taken the owner/operator business segment by storm?
Is it because the companies currently in the market are good at getting themselves entrenched with limiting contract terms (my observation has been that most businesses buy POS as a service, not as a product)?
Is it because good developers aren't "wasting their time" with such trivial CRUD apps as POS?
It's just very perplexing. I first encountered the crappy POS meme in highschool, working food service and retail jobs between classes. I had further insight into the ecosystem in my first job out of college--no, we weren't in any way working on the subject, it was just that our favorite lunch spot could never keep their system running. And now, through the course of several interviews with local small business owners, it seems that nothing has changed.
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[ 3.2 ms ] story [ 70.5 ms ] threadHere are some thoughts.
The POS business is littered with devices that were designed for purpose by giant companies like NCR and IBM. Their primary customers were very large corporate retailers, the cost per unit and for development was prohibitively high and because these were giant corporate IT projects the results were awful for the end users.
At the lower end the retailers got those really basic electronic cash registers (ECRs)with lots of buttons and LCD displays showing numbers only. These were out of Japan mostly and usability was not a priority.
The biggest issue with these ECRs was that they were trying to solve too many end-user requirements, so they all sucked for all but the most simple transactions.
With the PC a bunch of DOS and then windows based retail POs systems emerged - mostly awful usability due to Windows and DOS. The best did made it very efficient for a particular industry. E.g. for service stations their systems were integrated with the pumps in the forecourt and a back office system, all of which likely linked to the oil company. But it all stalled for years until the cloud and iOS based systems came along.
Right now we are in a moment of rapid change, with the end-user experience becoming hugely better for both the customer and the retail assistant. Still plenty to come so watch this space.
(Source 4 years in Mobil Oil, 2 doing payments and POS projects, 2 in the field, and I'm an investor in Vend)
(1) http://vendhq.com/
An example they just fixed after I handed them the bug and the fix -- they handled discounts on a purchase (i.e. a coupon, or F&F discount) by adding a special "Discount" product to the sale. In their database, hidden to the store owner, this "Discount" product was flagged as a taxable item with negative value. If someone wanted to buy a $10 item and handed you a $10 coupon in a state with 7% tax, the register would tell the cashier to give the customer $0.70 in change, and take $0.70 out of the month's tax you owe to the state. There were similar glitches in basic, critical calculations in inventory tracking, cost of goods sold, etc. There were oddities like if you used a barcode scanner, and had mis-typed a barcode when adding a product to inventory and lost a digit, the scanner would still pull up the product via the partial match, and it'd also add sales tax to that item even if it was marked as a non-taxable product (i.e. groceries in a state that doesn't tax them). So someone doing inventory could mess up your sales tax collection on that product for the whole year and it might never be noticed.
It's not a solid product, and the only reason we still use it is its integration with our Shopify store to keep the website inventory updated as items sell out in the retail store.
And yes, Users are the worst people from which to get requirements. You can get a rough idea of where their problems lay, but you won't get any good ideas for how to fix those problems from users.
I'm not sure how open it is for disruption, nor if it really is enough of a pain point to be worth replacing. Google has tried with Google Wallet, but who uses that?
One thing I have seen is that Girl Scouts are using some attachment on an iPhone to take credit cards at cookie sales. I'm not so sure that this would be useful in a restaurant setting or in a checkout process at a department store. It seems to me that these two use cases cover a large fraction of credit card purchases.
First of all, managers and business owners buy these systems. But they don't actually use them. They will sooner listen to the sales guy's pitch than the bitching from the employees. When you pay customer service staff the minimum wage that shows that you don't value them and as a boss, certainly know more than they could possibly know.
I think you comments are based on 2nd generation systems, i.e. ones that are more or less a PC with cash drawer and receipt printer attached. The big manufacturers have cornered the market by claiming that "only they are big enough to take care of your business." Typically the cost of customisation is so high that POS screens, functions are not updated as business changes.
The 3rd generation systems, based on iPads and other tablets are shaking up some segments. Of course, the struggle against the above two biases.
In case your wondering, 1st gen was stand-alone cash registers, whether mechanical or electronic.
In any large business, e.g. a chain, the POS integrates with the ERP systems to optimise the supply chain and distribution functions. This integration, alone, snookers many smaller, newer entrants.
Of course, I think you have hit the nail on the head, it is CRUD, unglamorous and once you confront the customisation and integration issues, a lot of hard work. As Paul Graham would suggest, the hallmarks of a niche to profit from.
What was really funny was they kept buying other companies to get their POS systems, but they could not manage to get one that worked as well as the old Borland based "thing"...
Java, fail
C#, fail
Modern C++, fail
It was rather amusing, especially after they chased off all the decent, experienced in the field programmers they had that they wouldn't allow to write the new stuff. They kept trying to buy it and failing.
The only thing I've seen worse is all the "video store management" software out there in the days before Blockbuster got big. Mom and Pop video stores were REALLY unwilling to spend any decent money on good software. I'm kinda glad about that as that's what kept me alive in the very early '90s, fixing all those Clipper, Dbase, Paradox and Flex "applications".
Years ago, when I was helping out my favorite bar get back on their feet, I had thought it would be a good idea to develop a POS system. I wasn't capable of it at the time, I was just out of college and knew very little about running a project. Nowadays, I've got quite a bit of experience in inventory and ERP systems, but I also understand the market a little better now. For one thing, the people who complain the loudest are often the least willing to pay more for better.
This all got started because my business partner and I were doing some on-the-ground research into what makes a small business owner tick. We have an investor who has a Great Idea that is completely unworkable without a ton of data that these sorts of places are either uncomfortable providing or unwilling to put in the effort of providing.
And one of the constant refrains we heard in our interviews was that these people hated their POS system, knew it was partly their fault for not using it correctly, but didn't have the time or inclination to get into it more. We're talking owners of walk-in wine stores and pet grooming shops. Places where the owner is behind the counter, running the place, or directly managing the staff. They all opened their businesses because the business focus was something they loved, but they ended up spending most of their time wrangling data systems and tax compliance. It's a major frustration point for them and we'd like to do something about it.
Do you have any insights into the types of support contracts that these sort of places are running? I'm considering trying to sell my services as "labor for hire" to help small business owners clean up and figure out how to best use their POS. It's something I could get bootstrapped on right away and I think it would build relationships that could lead to more business opportunities. And it seems to fill the need that most of these owners have, in that they know that their systems are a mess but they don't have the time to do anything about it. But I'm concerned that the typical POS company has their customers locked into a support contract that would not allow a 3rd party access to the system.
You've hit a few nails on the head, especially with the loudest complainers being the least likely to spend money and the unwillingness to expend any effort.
What I noticed with the few clients I visited for the POS vendor was that the owners weren't busy, they were lazy and cheap. If your idea man's idea involves getting people to do anything besides say yes or no on the phone, I wouldn't bother unless you meet face to face with a few people that are really enthusiastic and prove they're willing to make an effort. They will just frustrate you and make you hate life otherwise. This is especially true for any kind of banking or financial business such as mortgage brokers or credit reporting agencies. I have yet to see a group of people less willing to spend money or to try to cheat you out of it. Restaurant and bar owners would be second on my list.
I didn't see much of the support portion of the POS business because the majority of the people were in a different state, but, more than 1/3 of the employees were in the training and support department at this particular company. A support contract was required for any big business simply because the customers wanted a neck to choke when something went wrong. Developers could intuit a fair amount about what was going on with the customers due to the problem tickets and CRM entries we saw.
If not for the support/training revenue I suspect the POS corp I worked for would have been out of business years ago. However, they had some huge customers that just wouldn't buy anything without a support contract. The mom-and-pop customers paid per incident and screamed and hollered the whole time. The large corps are locked into the POS support dept. The mom-and-pops are not, but... I don't think you want to deal with them...
Source: Former Rentrak employee.
Just handling taxes in a piece of software meant to be used in multiple locations can be hideously complex, and that's just 1% of what the system is responsible for. Remember that not only do the tax rates differ from one half of a town to the next, but what items are taxable do too.
Close to 10 years and after engaging with 200,000+ retailers across India and with 20,000+ customers in about 20 different types of retail businesses - I have started appreciating the complexities of retail
The simple reasons why POS solutions are struggling to catch up fast with the times are 1. All retailers have the freedom to innovate at the front-end & there are many others who push down innovation at the front-end to the retailers : either because their customers are demanding or because the banks, technology vendors, government and competitors are constantly pushing the retailers to introduce change at the front end 2. Retailers want to service demand - come what may. The manufacturers continue to innovate on packaging, pricing, promotions etc. and no one waits for the retailer's system to be ready to handle these changes 3. Retailers have to keep the cost per transaction as low as possible to earn a profit. This, combined with the fact that retail is different every 100 miles, makes it hard to build a universal retail solution
I hope this explains why POS in most cases continues to be pain point for both retailers and consumers
As for packing, price, and promotions, it does have a bearing on how inventory and sales are recorded. Product packages, prices, and promotions change all the time and while it may be easy to keep track of sales, units sold, etc., the actual storage of this information is much more complex. Retailers need to structure their data in a way that allows analysts to determine how the sales were generated. In addition to knowing Coca-Cola had an increase in sales last month, innovation on packing, price, and promotions lead to technical requirements to know which specific UPC of Coca-Cola, at what specific price point, under what promotion, and at what location in the store drove those sales.
I think one problem is that everyone wants something different. I've been contacted by people who run festivals that want very specific functionality. It is hard to build that while keeping a feature set that most other people would find useful.
obviously biased, because I work at Shopify. but this is a sweet product, and it works with your online store for inventory tracking, reports, etc.
LemonPOS[1] has been around for ages, is Free Software, and works great. It'd take very little effort to undercut the big guys in this market with a tiny agile startup.
[1] http://lemonpos.org/