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POS Possibilities

01 Oct 2006

The Y2K mass technology refresh affected P.O.S. hardware like all other IT market segments. Six years on retailers from 1000+ lanes to the corner video store have hardware platforms that are nearing the end of their working life, or becoming increasingly expensive to maintain. In short the retail technology sector is awash with opportunity for system integrators and resellers.

To understand the market opportunity you must first identify which part of the market they are best geared to address.  i.e. Tier 1 through Tier 4 retail.

Tier 1: 200+ POS Lanes

Tier 2: 50+ POS Lanes

Tier 3: 20+ POS Lanes

Tier 4: 1+ POS Lane/s

Tier 1 is taken care of by the larger multi nationals and corporate IT partners. The selling cycle is long and the investment required up front is large.

Tier 2 & 3 however represents large opportunities across the board i.e. fashion, liquor, hardware, pharmacy...etc. There are two approaches on how best to address this market;

1. Become a hardware technology “partner” of the retailer i.e. Do not align to a particular P.O.S. software package/vendor, rather assist the retailer in selecting “Best fit” hardware platform and peripherals to suit the environment and P.O.S. software application.

2. Research the given retail vertical for which you wish to specialise, research the best software application to address this vertical and sell a solution i.e. Software & Hardware. There are very successful SI’s/resellers within both of these camps so neither is right or wrong. Indeed it’s possible to have a foot in each of these camps. But it’s important to have a business plan that recognises this.

To address the Tier 4 market a less strategic approach can be applied. Within Tier 4  (say five lanes and below) a significant component of ECR (Electronic Cash Register) makes up the numbers. This is a specialist field in itself with a huge amount of knowledge required to enter.

However as PC based P.O.S. hardware platforms have become more economic to implement it’s not uncommon to see single lane/single store PC P.O.S. lane installs. Single lane PC P.O.S. installs are often extensions of mass market accounting packages i.e. MYOB, Quicken,...etc, so are relatively easy to install and support.