To Bundle, Or Not To Bundle?

Integrated Solutions For Retailers, June/July 2009
Written by: Matt Pillar

As indicated by this month’s report on the industry’s progress on Payment Card Industry (PCI) data security mandates, small retailers are those most in need of help. They’re turning to solutions providers — from VARs to vendors — for assistance. Here, representatives from HP, Intuit, and reseller Computer Troubleshooters weigh in.

Why is a bundled POS hardware/software solution a better choice for small retailers compared to a best-of-breed or custom solution?

Tate Davis, sr. product manager, HP POS: Hardware/software bundles offer small retailers a complete, cost-effective solution for not only cash register capabilities, but also accounting and retail management applications. While the combined bundled POS solution is simple to configure and set up, it provides features for increasing productivity and makes processes more efficient by allowing retailers to monitor their inventory and business investments. But retailers should make sure the bundled offerings they consider are composed of hardware and software that have been tested and certified to run together, so they can rest assured that POS platforms and retail peripherals such as scanners, receipt printers, pole displays, and cash drawers work seamlessly.

Michael Lipps, director, Intuit Retail Solutions: A significant benefit of a bundled solution is the ease of setup and use, which save small retailers time and money. When you combine this with a simplified customer support experience (just one number to call) and a rich a la carte menu of products and services like payments, payroll, and financial accounting that you can integrate with your POS, bundled packages offer the most powerful “store management system” small retailers can buy.

Andy Oeftering, owner/product installer, Computer Troubleshooters: Apollo Signature in Englewood, NJ, a small high-end fashion retailer specializing in European name designers, was concerned about initial costs associated with the store build out [e.g. computers, cabling, and telephones]. A bundled offering was a very cost-effective solution compared with custom retail POS solutions. The system, which was purchased through CDW, was easy to install and QuickBooks provided a number of add-ons such as handheld inventory scanners, tag printers, and bar code scanners that automatically integrate into its POS software. Apollo Signature is planning to open three more stores in the near future, and the multistore version allows them to link stores to the headquarters location, giving Apollo’s owners the ability to monitor sales and costs for each store and for the company as a whole.

As this month’s report on the PCI DSS (Data Security Standard) initiative indicates, small retailers are not well-versed on payment security standards. How can they better lean on their POS vendors for assistance?
Davis: Security is always a challenge for any small business. In order to safeguard against theft and tampering with data, POS systems must be outfitted with uncompromising protection. We employ security tools including the HP Business PC Security Lock and HP Protect Tools Security Software Suite. Intuit is both a POS software vendor and a merchant services acquirer, so it stays on top of the latest PCI compliance requirements and works to integrate these into its POS solutions.

Lipps: Put simply, nothing can be more important for a small retailer than maintaining the security and integrity of their customer data. Your customers have to be able to trust you, and you have to trust your payment and POS solution providers to protect the vast amount of customer cardholder data that flows through systems. Make sure your solutions providers have the knowledge and level of integration to provide certified PCI DSS-compliant solutions.

The HP/Intuit offering resembles a mini-ERP (Enterprise Resource Planning) system. What retail software apps are most markedly absent from small retail shops?
Davis: A few applications that are absent from most small retail shops include:

* Inventory management – keep track and manage inventory; manage your capital more efficiently
* Loyalty programs – an area where small merchants that are not using a powerful POS system struggle; understand your top customers and provide incentives for them to come back and shop more
* Payroll services – allow merchants to effectively and affordably manage payroll needs, save time, and focus on running their business
* Payments – payment solutions help small retailers receive electronic payments with a broad range of end-to-end merchant services for stores, e-commerce sites, and mobile devices
* Bookkeeping – allows business owners to effectively manage their business finances to help them save and make more money

Lipps: Small retailers face two problems when trying to run their businesses: 1) not being able to find affordable solutions to automate key tasks that take lots of time when managed manually and 2) dealing with the complexity and cost of managing multiple point solutions from multiple vendors. The key is to help the small retailer get the level of store automation once only afforded by the big guys.

Oeftering: Apollo Signature needed more than just a simple cash register; they wanted to know what store items are hot and how to link customer data from the POS system to marketing campaigns to drive sales. The retailer used customizable features within its software package and allowed Apollo to stamp its brand on everything from price tags to sales receipts.

How does the bundled offering open up avenues toward business intelligence for the small merchant?
Davis: Business intelligence and understanding customers can have a significant impact on a small merchant’s bottom line in today’s economy. Small merchants need solutions that will help them better understand their customer, buying trends, and what items are “hot” to optimize revenue. This allows retailers to better manage routine tasks, such as tracking inventory and customers. It also helps improve profitability through customer retention features, tools for increasing sales, real-time inventory management, and instant reports.

Lipps: Most small retailers take for granted the wealth of rich information that they have in their POS system. They also don’t have time to create and run complicated report scripts or mine data. What they need is a POS solutions provider who understands how to balance power and simplicity when it comes to business intelligence. Who are my most valuable customers? What are my most profitable products? Who hasn’t bought in a while? Fast answers to simple questions like these, provided in a format that is easy to use and understand, turn this insight into action (email campaigns, etc.).

What’s the next step in the evolution of the store systems architecture for small merchants?
Davis: We will continue to see seamless integration of software and hardware. Through these partnerships we will see simpler, more powerful complete solutions to enable small retailers to unleash the power of a POS system to help them to survive tough times. Additionally, we will continue to see complete mini-ERP (enterprise resource planning) packages of hardware and software to simplify the purchase and deployment of in-store solutions to enable small retailers to grow and manage their business.

Oeftering: Apollo Signature wants to gain access to important transaction, profit/loss, and margin information from anywhere, as the owners are on the move between stores and while traveling abroad to size up the latest fashions for their stores.

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