Is it the cloud or is it in the fog? As retailers look more and more to a single transaction engine, driven off of a single Order Management System, the concept of cloud-based POS applications begins to make more sense. But vendors and retailers alike must take into consideration things like offline mode, merchandise pickup at the store for online purchases and ship from store. What is right for one type of retailer might not be OK for another. This research helps vendors think through their architecture and for retailers to plan how if cloud or a hybrid of a cloud POS might best meet their needs. We call it foggy because the best solution might be a combination of the traditional POS approach and the cloud components.
Table of Contents
Introduction / Background and Objectives
1.0 Key Trends Driving This Thought
One Million POS Terminals Just Lost Support for Windows XP
The Consumer Shops in Omni-Channel
Need for a Single Business Logic
Current POS Paradigms
Marketing Has a Say…and Budget Too
A Centralized View
Peripheral and Local Device Support
Changing Way Software Is Purchased
2.0 The Case For Cloud
Where it Works
Where it Doesn’t
Mobile Payments and EMV Solve Everything, Right?
Seriously, What Are The Costs?
3.0 Market Sizing
4.0 Best Practices
Pick a Vendor That Understands Offline
Security is Much More Than Just a Device
Geofence, but Save the Transaction Data
Do Your Homework – Is There Enough Flexibility for Your Desires
5.0 Is The Time Right?
List of Figures
Figure 1 – Stumbling Blocks for Omni-Channel Readiness
Figure 2 – Desire for a Singular Transaction Engine
Figure 3 – Projected North American Installed Base for Cloud POS
When you use the term POS, what do you mean?
At IHL we believe it is important that we state clearly the definitions of what we are classifying as a POS device (or in the case of the EMEA region, an Electronic Point-of-Sale (EPOS) device). For the purposes of our analysis, we are defining POS as PC-based workstations, namely PC-class Processor-based and LAN-available terminals. Although others might include Electronic Funds Terminals as POS, we do not include them here. Perhaps the best definitions come from the use of the current model names of the top vendors that we are including:
Toshiba GC: SurePOS 300, 500 and 700 families
HP: rp5XXX and ap5XXX families, PCOCD
Wincor Nixdorf: BEETLE family
NCR: RealPOS 20, 40, 50, 60, 70, 80 families and P‐series
Fujitsu: TeamPOS 3000 and 7000 families
More recently it also includes Mobile POS, which is the use of devices like the Apple iPad or iPhone to take transactions. The key thing is that it has a role greater than just taking credit card payment. There is actually logging and ringing of items and reporting on individual SKU items.
How do you define Cloud?
There are several definitions for this term, but in its simplest sense, the term “cloud computing” pertains to the delivery of computing as a service (rather than a product) through a network (typically the Internet). In this report we will not delineate between a public and a private cloud. Instead, we use the term to describe a POS solution where the core data and sales completion data is stored online rather than in a server at the location. In this report we will not try to determine where the “line of demarcation” exists between what stays in the store and what goes online. All that said, a new term has arisen of late, namely Fog POS. This pertains to a solution that is part cloud, but where core components of PLU are present, along with the ability to run transactions locally through a fat client.
What segments are included in your research?
We define traditional retail as the following segments by SIC and NAICS codes.
Food/Supermarket: This is a grocery store, and size can range from a single-lane, mom-and-pop store to a multi-lane full service supermarket.
Drug Store: This is store that sells personal care and medicinal items and can have from 1-5 terminals per store.
Hypermarkets: This is a broad segment that varies by country. In many, it includes a full service Food store as well as products typically included at Discounters under one roof. In other countries, stores can range anywhere from a Superstore format (think Wal-Mart Supercenter) to a full-line Department Store (with large appliances) combined with a full-line Grocery store.
Department Stores: Traditionally larger format stores, upscale in products and including hard and soft goods with department style checkout.
Mass Merchandisers: Like a Hypermarket format, only carrying non-food items or limited food items and using a front-end checkout. Also includes Discounters.
Specialty Stores: Stores that focus on particular product line niches. Includes apparel, news, shoes, and DIY type stores.
Hospitality: Includes Restaurants, Bars, Pubs, Hotels, and Convenience Store outlets.
Can I share this study in my company?
Yes, each of research products come with an enterprise license so it is free for anyone internal to your organization. See below for more.
Can I share this study with partners and clients?
Not in entirety unless you have negotiated a distribution license with IHL. Basically we don’t want the study going to partners and clients who should otherwise purchase a license. This is what we do for a living, and if people violate this we can no longer do the research. Contact us at ihl(at)ihlservices.com with any questions.
Was this a survey or a paper?
A little of both. When it comes to this sort of study it is part art and science. We have several primary research studies behind the numbers. These are then extrapolated across segments and markets to provide overall sizing. We run this by key clients and other analysts for their insight and view as well before we release. So the cornerstone is detailed primary research data with CIOs meshed with numerous analysts with over 100 combined years of retail sizing experience to build the models.
Is more detail available beyond what is in the study?
Yes, indeed. We have an extremely detailed Retail WorldView IT Sizing model that allows us to look at over 300 technologies across every region of the world by segment. In this cloud component as well we have a variety of products that look at hardware, SaaS, software and customization services.
So we can customize the research output just for your needs. Simply contact us at ihl(at)ihlservices.com or +1.615-591-2955
Can I get access to the analysts who wrote or partnered in the study?
Yes, one of the core differentiators of IHL Research Studies is that included in part of the price is up to 1 hour with the analyst to ask follow-up questions or dig further into any assumptions. This does not extend to getting more data, just better insight into how we arrived at the data and came to the conclusions from that data.
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