Retailers have slashed the cost of their point-of-sale (POS) operating costs by moving from server-based systems to the cloud.
One Australian retailer, a fashion label which manufactured its own garments, reduced its $40,000-a-year POS system for 13 stores to US$350 a month – a tenth the cost – by using a cloud-based combination of POS (VendHQ), file storage (DropBox) and accounting (Xero).
<!–:sh–>Once it had switched to the cloud for its applications<!–sh:–> the label no longer needed to maintain its own servers or a virtual private network between the stores.
Vaughn Rowsell, founder of VendHQ, said retailers could make large savings by moving to the cloud while still enjoying the latest technology.
He pointed out that the fashion label had sped up its business processes by integrating its e-commerce store, accounting program and production system with its cloud-based POS system. As soon as new garments were manufactured they were immediately shipped to the stores where they appeared as consignments.
Store managers just needed to approve the receive order and the stock was available instantly in the POS system to be sold.
“Some retailers’ entire IT infrastructure is their iPad. They run their reports off it, do e-commerce, POS. The face of retail is changing from a technology point of view,” Rowsell said.
Rowsell wrote his own cloud POS application after he was asked by one of his consulting customers to find a better way to manage stock in their online store and physical stores, he was surprised to find the options were pretty limited.
“I looked for something in the cloud and found that retailers were really badly treated by their software. It looked like innovation had ceased about 15 years ago,” Rowsell said.
“Retailers were using old technology, closed systems and it was really hard to get data out of them. And the software itself looked pretty average.”
Rowsell, a software developer, knew he had to overcome two hurdles first.
A web app was not the speediest of software. In a high transaction environment like a retail store you don’t want customers waiting for a web app to load when you scan each item, Rowsell said.
The other concern was typical for cloud computing – how does a retailer keep trading when the internet goes down?
The programming language HTML5 was just starting to be adopted by web browsers and Rowsell began experimenting. “We were trying to work out if we could build a retail POS that ran in the browser, that wasn’t dependent on the internet, and was fast and easy to use,” he said.
Rowsell launched VendHQ 10 months ago as a prototype with beta customers, intending to take it slowly while he added features.
However, word-of-mouth recommendations drove sales by up to 30 percent growth each month. Less than a year later, VendHQ has 150 customers with 200 stores, mostly in Australia and New Zealand, and some in the US. The company is opening a sales office in San Francisco later this year.
Another 1200 customers are using a free version. Most eventually migrate to the paid versions, which come in three sizes, Rowsell said.
A chief advantage for cloud-based POS over on-premise POS systems is the speed of adding registers. Retailers can fire up new registers if they have a busy day, Rowsell said. “It’s literally just pulling out a notebook from the back office.”
How does it work?
Rowsell said HTML5 stood out when it came to choosing a platform. “We looked at Adobe Air, native apps, doing it as an iOS app. We looked at everything but made the call to back HTML5 because it gave us the greatest reach across multiple platforms and browsers, and a lot of these features can run on Android and iOS,” Rowsell said. “It gave us the best of both worlds.”
The majority of VendHQ’s customers are using Windows PCs to run their POS systems, most using the Google Chrome browser recommended by VendHQ. The program also runs on an iPad using the Safari browser and works exactly the same way because it’s written in the same language.
VendHQ makes a copy of the retailer’s product database on each POS system and syncs it to the cloud in real time. If the internet connection goes down, the POS system can keep scanning products and making sales.
Once the connection is back up, the POS system loads the sales from the local database to the cloud database stored on Rackspace’s cloud hosting service.
VendHQ uses HTML5 features extensively to give retailers offline access. One feature is local storage in the form of a webSQL database built into the browser, including browsers running on a tablet like the iPad.
The webSQL database stores the copy of the retailer’s inventory database. “All product lookups happen instantly,” Rowsell said.
VendHQ also relies on HTML5’s offline manifest. This feature tells the browser to take copies of certain files and pages so they can be used offline.
A third feature used by the solution was websockets, an element of HTML5 which allows a browser-based application to talk to other devices on a local network. VendHQ uses websockets to interface with hardware such as an EFTPOS unit or payment device.
HTML5 has picked up more features as it matured. Recently Google Chrome enabled voice searching. VendHQ added voice searching to its POS application so that a customer or employee can search for a product by speaking its name into the POS computer or tablet.
“That took us 5 minutes to implement but probably took Google engineering five months,” Rowsell said.
“As they add new things like video and audio and whatever else to the (HTML5) spec, the browser manufacturers roll it out and we can instantly leverage off it. We’re literally standing on the shoulders of giants.”