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iPad, Tablet Point-of-Sale Systems Gain Popularity

Version 3.0 of the cash register is the iPad.

Catherine Clifford

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Apple iPad

First, merchants had that heavy metal piece of equipment that made a “ca-ching” noise when you opened the cash drawer sitting in their shops. Then, many business owners used an automatic point-of-sale computer, which can be bulky and costs approximately R80 000.

Now, more entrepreneurs are opting to have their cash register, inventory tracking and customer records all run through an iPad or other mobile touch-screen tablet. An iPad looks modern and sleek, the device’s mobility gives a merchant greater flexibility in serving customers, and the cash-register software available for a tablet costs considerably less.

Over the next three to five years, many of the existing larger and pricier point-of-sale systems will be replaced with iPads, says Dave Kaminsky, an emerging technology analyst with Mercator Advisory Group, a payments-industry advisory firm headquartered in Massachusetts.

It’s impossible to predict when a total conversion of the market would occur, he says. In the same way that some customers continue to write checks in an age of online banking, some merchants will continue to use the older point-of-sale systems out of habit, he says.

Related: More Than Cool Gadgets

For Shannon Seip, transitioning from a more traditional point-of-sale system to an iPad-based system was a cost-saving no-brainer. The set-up costs for an iPad-based point of sale system for her healthy, kid-friendly café were R40 000 less than it would have been with a traditional point-of-sale system.

“For a small company like us where R40 000 makes a huge difference, that was a key differentiator,” says Seip, who recently moved her shop, Bean Sprouts Café & Cooking School, from Wisconsin, to Seattle. “That might mean an extra oven that we might need, right there.”

When Bean Sprouts was in Wisconsin, the café operated with a traditional point-of-sale system called Aloha, made by Georgia-based multinational corporation NCR. Now, Bean Sprouts uses an iPad-based point-of-sale system offered by Ontario, Canada-based Aireus.

To get set up with Aireus cost Seip $3,750 plus the cost of two iPads and printers. She selected Aireus for its relatively affordable start-up and maintenance costs, its compatibility with other financial software that Bean Sprouts uses and the customer service, among other reasons.

A range of iPad-based point-of-sale systems are on the market now. As more tech companies look to enter the point-of-sale market, some seemingly unlikely competitors are angling for the same turf.

For example, Chicago-based Groupon, known for running daily deals on local services and products, and San-Francisco-based Square, known for giving merchants a way to accept credit cards from their iPhones, both now offer point-of-sale systems tailored to specific segments of the restaurant industry.

Groupon’s restaurant software, called Breadcrumb Pro, starts at $99 a month, was released in October 2012 and is tailored to more full-service restaurant set-ups. Square’s free software, Square Register, launched in March 2012, and last month was updated with new functions for the smaller, quick-serve restaurateur.

While Groupon’s Breadcrumb Pro monthly software costs starting at $99 a month are higher than Square’s free software, Square’s swipe fee of 2.75 percent of a charge is higher than Groupon’s 1.85 percent of a charge plus a 15-cent transaction fee for any charge above approximately $17.

Point-of-sale system companies known for their larger and more powerful R80 000 systems, such as NCR, also have moved to provide iPad point-of-sale solutions. NCR’s iPad-based point-of-sale solution, called NCR Silver, launched last summer.

Related: 3D Printing

NCR’s software is free, its swipe-fee charge at 1.99 percent is between that of Groupon and Square, and NCR requires merchants to pay an equipment-lease fee, starting at $29 each month. The 128-year-old company is confident that merchants will end up picking NCR’s longstanding expertise over the newer entrants to the market.

“When [merchants] do their research, even if it was marketing dollars from a Groupon or a Square that might have gotten them to start that research process, quite often that research process lands them with NCR,” says Christian Nahas, leader of the NCR Silver team.

“They are attracted to our stability, they are attracted to our history, they are attracted to our robustness, they are attracted to, ‘This is what we do.’ We are not a deal company that also has a point of sale or a payment company that also has a point of sale.”

What’s more, offerings from Groupon and Square don’t currently have the ability to serve the more sophisticated point-of-sale needs of larger enterprise chains, says Sucharita Mulpuru, retail analyst with industry advisory firm Forrester Research.

“I am sure that everyone wants to position themselves as more,” Mulpuru says of the point-of-sale tablet options flooding the market. Groupon and Square may be best for the kinds of merchants that were previously cash merchants that are looking to now accept credit cards because of their low set-up costs and ease of adoption, she says. And because it is so expensive and time consuming for a larger retail operation to replace its point-of-sale system, new point-of-sale offerings will have a better opportunity with smaller retailers that either don’t have an existing system or for whom transition costs aren’t prohibitive, says Mulpuru.

Among smaller retailers, the major players like NCR have the advantage of name recognition in the point-of-sale industry, but whether they continue to dominate will depend on their ability to innovate ahead of the more nimble point-of-sale system start-ups, says Kaminsky.

So far, the biggest players have been keeping up and making necessary changes and updates to their systems, he says.

As Chicago-based Groupon tells it, moving into the point-of-sale business is a natural evolution from its daily-deal model. The daily-deals model is “super clunky today. Daily-deals is goofy, in terms of where it is going to be,” says Jeff Holden, senior vice president of product at Groupon.

Looking ahead five to seven years, Groupon wants to be the engine that connects consumer demand with local merchant supply constantly and in real time.

To do that, Groupon wants to become the point-of-sale system for merchants that run deals on its platform. Groupon expects to be able to constantly monitor for peaks and valleys in local small-business revenues and coordinate deals to automatically be sent to its 41 million active users to drive traffic to a shop when a business owner needs it, explains Holden.

“Local commerce is super inefficient, is super broken. What local businesses have to do to be successful is crazy,” Holden says.

In the still-burgeoning iPad-as-point-of-sale market, Groupon’s ability to monitor the peaks and valleys in a business’s traffic and drive customers to a local business at peak moments gives the daily-deal company a “significant benefit,” says Kaminsky.

Square also says that its move into the point-of-sale market was organic. The logical extension of providing merchants a way to process credit cards is offering a way to manage and track those payments. “We expect Square Register to be the default way any brick-and-mortar merchant manages and runs their business.

That means building features and functionality that make commerce easy for merchants of all kinds from restaurants, to boutique retailers to mobile sellers,” says Aaron Zamost, spokesman for Square. The option of a flat monthly fee combined with Square’s speed and agility in adding new features to its software make the company an attractive option for even some larger merchants, says Kaminsky.

As an entrepreneur, choosing a point-of-sale system for your business can seem overwhelming. New options and enticing sign-up offers are available regularly. For example, earlier this month, PayPal offered to waive transaction fees for the remainder of the year if a business replaces its cash register with an iPad operating PayPal’s free mobile-payment technology, called PayPal Here.

Business owners often choose an interface and financial dashboard that feels most comfortable, says Kaminsky. “A lot of times, they are going to say: These are all basically the same, they are providing the same service, the differences they have don’t make a difference to me.

And at that point, it is going to come down to, once again, that trust, whose name do you feel most comfortable going with,” he says.

While the tablet-based point-of-sale systems are gaining in popularity, they aren’t for everyone. Jerry Nevins and three buddies launched an artful frozen-drink lounge Snow & Co. in Kansas City, Missouri, in November 2011 with Ambur’s iPad point-of-sale system, for which they paid R10 000.

But by October 2012, after much deliberating over the cost, Nevins and his three other co-founders bought a R80 000 point-of-sale system from Micros. Along with the more traditional point-of-sale system, Nevins ordered hand-held mobile devices which waiters carry with them to tables to take orders from customers.

As Snow & Co. grew, Nevins wanted to be able to more carefully understand his customer behaviour. “I could get a sales report by ticket and by customer, and I could get a sales report by item, but those things didn’t tie together, so I couldn’t see what my customers were buying most often together,” says Nevins.

“If I wanted to get my hourly sales, I could run it out by hour, but I couldn’t get a report that would show me my sales by hour automatically.” With the more costly system from Micros, Nevins can generate these reports that he didn’t have access to with Ambur’s iPad system.

The team at Ambur is aware of the restrictions on its software reporting system, and it is working on increasing the reporting functions it can provide, says Jeff Su, the director of operations. When more robust software becomes available, customers will be able to access it for free, Su says.

He was unable to provide a timeline as to when more sophisticated reporting software would be ready. But, he says, what’s important to Ambur is that a potential customer is able to play around with a fully functional demo of its product before they purchase it.

“We want people to know exactly what is going to be happening and then they can ask any questions that they want, they can see it live in person or over a computer screen,” says Su.

Tablet POS Systems

  • Groupon

Software: Breadcrumb Pro

Set-up: Starts at $99 a month, goes up depending on number of iPad terminals

Hardware: Restaurateurs can purchase third-party equipment or use their own tablet.

Swipe: 1.85 percent of a charge plus a 15 cent transaction fee

Launched: October 2012

Target market: Full-service restaurants and bars Early adopter: New York City-based restaurants, including Empellon Cocina and Terrior Park Slope

Software: Breadcrumb POS

Set-up: Free

Hardware: Merchants can purchase third-party equipment or use their own tablet.

Swipe: 1.85 percent of a charge plus a 15-cent transaction fee

Launched: May 2013

Target market: Quick-service eateries, salons and spas, retail establishments

Early adopters: San Francisco businesses are testing a pilot

  • Square

Software: Square Register

Launched: March 2012

Set-up: Free

Hardware: Business in a Box cash drawer and iPad stand: $249 and $499 with receipt printer; Square Stand iPad stand: $299, includes integrated card reader (available July 2013)

Business in a Box launched: February 2013

Swipe: 2.75 percent of a charge for its services.

Target market: Local businesses and quick-serve restaurants

Early adopter: Oakland, Calif.-based Blue Bottle Coffee

  • NCR

Software: Vantiv Mobile Checkout Powered by NCR Silver

Launched: May 2013 (NCR Silver stand-alone program launched June 2012)

Set-up: Free

Hardware: $29 per month hardware lease, includes wired printer and Ethernet wire, cash drawer, iPad stand, encrypted credit-card reader. Merchant provides the iPad.

Swipe: 1.99 percent per transaction

Target market: Average customer makes between $100 000 and $1 million a year in sales; mostly restaurants, cafes, retailers and service providers.

Catherine Clifford is a staff writer at Entrepreneur.com. Previously, she was the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Catherine attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. Email her at CClifford@entrepreneur.com. You can follow her on Twitter at @CatClifford.

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Innovation

3 Strategies To Implement A Culture Of Innovation In Your Business (Without Blowing Billions)

Learn to think differently, encourage your team to do the same, and innovative disruption could become a part of your company’s DNA.

Douglas Kruger

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You’re seeing it everywhere. Disruptive innovation is becoming the new norm, and you’re concerned that your business is merely going through the motions, missing opportunities.

How can you join the Elon Musks of the world, without the corresponding bulging budget?

It turns out that many of the techniques of today’s top innovators don’t require vast outlay. They’re simply about different ways of thinking.

Here are three strategies for enhancing the culture of innovation in your organisation without blowing billions.

1Use ‘Ignorance as strategy’

You’ve encountered the aphorism, ‘To a man with a hammer, everything looks like a nail.’ Similarly, to a banker, the only imaginable approach to banking is ‘the way banking has always been done’. When bankers try to think of innovative new ways of banking, they invariably think of greater complexity.

Along came PayPal

In the April 2016 edition of Harvard Business Review, Reid Hoffman, one of the founders of PayPal, said, ‘All the banking people knew the rules. That prevented them from trying anything that looked remotely like PayPal.’

PayPal was not invented by a bank, just as Uber was not invented by a taxi driver.

Related: Demanding Customers Are The Ones Who Motivate Innovation

To make use of ‘ignorance as strategy,’ try this. Gather a group of strategic thinkers and set the rule: ‘The old way of doing it has been outlawed. How else might we serve the same need?’

Or: ‘We are now our competitors. We have half the budget, but our hearts and souls are invested in one purpose: To topple the original company. We can’t do it the way they do it. So how could we go about it?’

Or: ‘The company has burnt to the ground. We’ve lost everything. We need to keep serving our customers but we need a new, cheap, fast way to do it right now that doesn’t rely on any equipment or systems we used before. What have you got?’

2Use commander’s intent

military-commander

Imagine: You’re a military commander. You need to move a convoy of trucks through a dangerous canyon. Your intelligence tells you that there is a sniper on one of the escarpments.

There are two ways you could issue an instruction to a soldier:

The first way: ‘Go take out that sniper.’

That’s very clear, and very good. But there’s something surprisingly important missing from it. The ‘why’ is not overtly stated, and for that reason, the mission could actually fail.

Let’s try it again the second way: ‘Go take out that sniper because we need to ensure safe passage through the canyon for our convoy.’

That may sound like a ridiculously obvious addition. Here is why it’s not: In a real, dynamic scenario, things change constantly.

Let’s say your soldier breaks off from the convoy and heads up into the mountains. Very quickly, three things go wrong:

  1. He can’t find the sniper
  2. Enemy forces start firing at him, making it difficult to look for the sniper
  3. His own weapon fails to fire so that he can’t shoot back.

If our soldier thinks only about the literal instruction — ‘shoot the sniper’ — he is now unable to carry it out. But if he bases his actions on the commander’s intention — ‘secure our convoy’ — other options open up to him.

Related: Reel Gardening Warns That Innovation Is Never Easy

He might draw their fire. He might set a bushfire. Or he might cause a commotion in a different canyon, disguising the movements of his convoy. He might, he might, he might… But only if he is absolutely clear on Commander’s Intent, and not working according to an explicit tasked item only.

Managers love to create detailed rules and procedures. But these can actually stifle innovation. Commander’s Intent is the life hack by which we get the upper hand again, freeing up leeway for creative potential.

3Instead of rules: Imaginative debate

Organisations accumulate rules over time. Problematically, rules can become a form of culture. And there is a better way.

When NASA faced two separate, well-known challenges, their culture at each stage was very different.

In 1970, Apollo 13 was two days into its mission when an explosion knocked out one of their oxygen tanks. The ensuing creative scramble to get the astronauts safely home is the stuff of legend. The creative trial and experimentation that went into rescuing them was formidable. New procedures were made up back on earth, then tested in the simulator, then relayed to the astronauts 200 000 miles away, almost in real-time.

Through this process of creative trial and experimentation, of collaborative inter-disciplinary debate, one by one the issues were resolved and the crew was brought home safely.

At this point in time, NASA’s culture was ruled by imaginative debate. It was an exploratory culture, an experimenting culture, a culture based on learning and evolution.

By contrast, at the time of the Columbia disaster of 2003, the culture of experimentation had given way to one of formalised rules, regimented procedures and rigid hierarchy. NASA had stopped being a learning organisation. It had become a bureaucracy instead.

As Columbia re-entered the earth’s atmosphere, a large piece of foam fell from the shuttle’s external tank and broke the wing of the spacecraft. The shuttle broke into pieces. NASA recovered 84 000 pieces from a debris field of over 2 000 square miles.

The investigation revealed some damning insights about the culture that led to the problem.

Related: Howard Blake Stays Hungry With His Innovation Strategy

During a post-launch review, a group of engineers actually saw this foam dislodge from the rocket. They tried to pass on this information. NASA’s management, which by this stage liked to manage everything ‘by the rules’, had seen dislodged foam before, and, according to their institutionalised perceptions, deemed it to be unimportant.

The engineers tried to argue that it seemed like a lot more foam than usual. It was a qualitative argument, based on human insight and intelligence. But NASA was unable to listen. Dislodging foam was a known quantity, and the voices of dissenters went unheeded.

NASA by this stage was so bound in rules and procedures that, in important ways, it had ceased to be a learning, experimenting culture. And that made it incapable of hearing an idea, to its great detriment.

Situational awareness

Imaginative debate allows situational awareness to pass up and down the chain of command. It promotes the opportunity to see innovation possibilities. It shows up problems that fall outside of the capacity of norms and guidelines.

The Israeli Defence Force uses an examination of these two cultures within NASA as a way of perpetuating a learning culture within its own organisation. In Start-Up Nation, Israeli air-force pilot Tal Keinan is quoted as saying that if NASA had stuck to their experimental culture, the way his own air force and military do, they would have identified and seriously debated the foam strikes at the daily debrief.

Debating everything isn’t tedious. It’s illuminating.

Putting rules in place of debate isn’t clarifying. It’s dulling.

Rigid rules enforced by unlearning authority are a recipe for real danger. The use of strenuous debate helps to overcome these blind spots.

Cultures of learning are far more idea-friendly than bureaucracies. And it costs nothing to become one. Merely a little willingness.

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Innovation

To Have An Innovative Company, Let Your Employees Take The Reins

‘In order to clean, they need to get messy,’ serial entrepreneur Justin Klosky tells Entrepreneur’s editor-in-chief Jason Feifer.

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Related: Demanding Customers Are The Ones Who Motivate Innovation

An innovative company starts with an innovative team. And what’s the best way to innovate? Give your employees the freedom to run with their own ideas, then manage the chaos later. At least that’s what Reid Hoffman believes.

“If you want your company to innovate, your job is to manage the chaos,” says the co-founder of LinkedIn, partner at VC firm Greylock and host of Masters of Scale, a podcast series examining counterintuitive theories to growing a company.

Hoffman’s theory doesn’t seem too far-fetched either. In fact, he’s not the only person who thinks giving employees the freedom to think and create on their own triggers innovation.

“When [people] have that ability to explore and innovate without the pressure of failing, you’re setting yourself up for a ‘win’ situation, because you’re going to get the best out of somebody,” Justin Klosky, founder of professional organizing company O.C.D. Experience, tells Entrepreneur’s editor-in-chief, Jason Feifer, in a video.

Although, when you’re empowering employees with this much freedom, you’ve got to be hiring people you trust. This can be easier said than done. Rather than dissecting a person’s resume, Klosky recommends digging deeper and asking prospective employees questions that will really open them up – anything from who they are, where they’re going and what brought them here.

Related: Beyond Innovation – it’s Innovation Velocity That Really Matters…

After you’ve hired a group of honest, intelligent employees, now what? Don’t tell them how to innovate. Instead, let them figure that out on their own. Allow employees to do what they do best, return to you with their results and from there manage the chaos.

“In order to clean, they need to get messy,” says Klosky.

For more insights and advice about managing an innovative culture, check out the video.

This article was originally posted here on Entrepreneur.com.

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Innovation

Do You Know How To Stay Relevant?

In this tough economic climate, you need to start focusing on business areas you can control. The ability to stay agile and relevant is in your hands.

Ed Hatton

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We have seen huge changes in South Africa recently. Just five years ago, we had a thriving platinum mining sector, good exports of commodities, no e-tolls, a rand dollar rate of better than 8:1 and peaceful universities.

All that has changed, with a significant effect on our SME sector. Imports cost more, finance is expensive and socio-political and labour issues disrupt business frequently.

Customers have changed too; many buyers now complete over 60% of the sale by Internet research. They make comparisons, shortlist potential suppliers and only ask for quotations when they are close to deciding on their supplier.

You could’ve fallen off the shortlist and didn’t even know it

Your company could have been a potential supplier and then fallen off the shortlist without you ever knowing about the lost opportunity. Customers no longer rely on sales staff to provide information about products and applications, and even the least tech-savvy customer checks prices and specifications online.

24/7 availability is now expected, and long delivery times become unacceptable. Customers assume you will be able to slot in unplanned orders efficiently. Loyalty is no longer a given; buyers will move to suppliers who provide better value, even if that supplier is overseas.

Related: 10 Steps For All-Around Optimising Your Business

Lead through quality

Entrepreneurs should recognise that the way we have done business in the past might need modification; there is a risk of being overtaken by more agile competitors. Uber, Airbnb and Netflix are great examples of competitors changing the rules.

What is happening in your markets? What are your competitors doing? Do not just accept feedback from your staff — they are also in their comfort zones. Research competitors and new technologies; ask customers what they would like to see you change.

If you make a decision to update your business, there are several areas you could focus on to build a more agile business that gives better value for money. Technology, quality, customer service, IT, Internet presence, continuous learning and strategy review are among those. A few of the vital ones include:

  • Use available technology. Check prices and terms from alternate suppliers, investigate IT solutions to provide flexible manufacturing systems, optimise inventory and give better response times for customer enquiries.

A good CRM system can track complaints, give basic data to spot new market trends and identify customers starting to move away from you. Develop apps to improve customer convenience or optimise sales calls.

Related: When Innovating Beware The Blindspots

  • Increase quality in all respects, from your products to the accuracy of your invoices. Spend money on quality systems and business processes. You will get it all back in direct and indirect savings by having less comebacks of all types. Better quality in all respects increases your value proposition, and helps to justify your price.

Embrace agility

Overhaul your customer service. Set improvement targets for order fulfilment, right first time repairs, shorter lead times, more convenient customer interfaces and all the other elements of great customer service. Then put plans in place and implement them. Financial returns will follow.

You need an effective and integrated Internet presence, with rich content, which means useful short pieces, not lots of content. Your social media presence must be integrated and support your brand and value proposition. Do not follow trends blindly because everyone thinks they are cool.

Revisit your strategy

Your company must be agile enough to change strategies and tactics to take advantage of market and competitor changes, rather than seeing them as threats. An outside facilitator helps.

All of this sounds like a lot of work and expense, but right now you may be using large chunks of time and money fixing errors, working around old systems, losing customers you should not lose and not getting new customers you should get. Stop all that and you will have time and money to create the new agile and informed company you could be, and stay relevant in your markets.

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