A good Point of Sale (POS) system is a key tool for retailers to increase sales, keep an overview of stock and provide high-quality customer service. It can, however, be difficult for non-tech savvy retailers to know which POS system they should invest in.
In the past few years, web-based, cloud POS systems have become more and more prominent as a viable alternative for small and medium retailers in particular. Cloud-based POS can be deployed as Software as a Service (SaaS), which can be accessed directly from the internet, using a web browser.
According to a 2015 study on cloud computing adoption by IT market research firm Techaisle, moving to a cloud-based POS system can bring cost savings, as well as an increase in productivity and visibility to small and medium businesses. On the other hand, a cloud POS may not be the right decision for every retailer.
To help you judge whether or not a web-based POS is right for your business, we have compiled a handy list of pros and cons:
Pro: Hardware independent
Cloud-based POS software is accessed via a browser, which means that retailers don’t need to invest in expensive new equipment to run it. Businesses can also decide whether they want to run the software on a PC, phone or tablet; as long as the device has an internet connection and can run a browser, there are no platform limitations.
It’s easier to engage customers with a mobile POS, which sales associates can use to look up information and close the sale directly on the shop floor. Cloud-based software enables retailers to use mobile phones or tablets as a POS at no extra cost – a very convenient proposition for small and medium-sized retailers who wish to be flexible on the shop floor without investing a fortune in tech.
Pro and con: Subscription pricing
SaaS is usually available at a subscription pricing, often in the form of a monthly or yearly fee – with little to no upfront costs for the retailer. This model is often more manageable for a small retailer than traditional software: on the one hand, the starting capital needed is minimal; on the other hand, the monthly fees cover not only the software but also data backup and future upgrades, removing the risk of surprise charges later on.
The subscription model is, however, not as convenient for retailers of all sizes. Depending on how many devices and features you need for your business, and for how long you need them, monthly subscriptions can become as expensive as traditional software, in the long run. Do your calculations before you buy.
Pro: Little IT knowledge required
Small and medium retailers often have limited IT knowledge in-house; and hiring external consultants can be very expensive. With cloud-based software, all snags related to the service are solved directly by the provider. This not only enables retailers to save money, it also ensures that all issues will be taken care of promptly.
This type of setup requires the devices to be constantly connected to the internet. If your connection is unstable or haphazard, you risk breaks in your service. To limit the danger, some retailers use two different network operators – when one breaks down, the other one can kick in, and no sales are lost. Depending on the reliability of the service in your area, you may benefit from a web-based Point of Sale, or conversely decide for a POS that can work both online and offline.
Pro: Anytime, anywhere access to data
As all data is saved instantaneously in the cloud, managers can track sales as they happen, update prices and place orders wherever they are – all they need is an internet connection. A great perk if you are the type who cannot stop working even while on holiday, or relaxing at home.
Pro: Always on the latest version
Many businesses experience errors and slowdowns because of outdated technology. In the cloud, it is up to your vendor to manage and update the infrastructure, so you can stay on top of new technology and security requirements with minimum effort: you don’t even need to worry about remembering to install the software updates.
Con: No customizations
Due to its deployment model, SaaS does not allow for customizations to the software. Although this factor will not be a deterrent for many small and medium retailers, who have little to no time and money to spend on personalizing the POS colors and look, larger retailers may prefer to go for tech that can be easily tailored to their brand and needs.
Pro: Easy to grow and shrink
When each POS device is paid monthly, it’s easy to add or decrease the number of devices based on needs. Peak season? Opening a pop-up store for the holidays? Add a couple of devices to your monthly contract, and then shrink back to the usual number in four weeks. You don’t even need to buy more hardware, as any phone with an internet connection will do.
Pro: No software installation
With SaaS, all the software is on the provider’s end. You don’t have to download or install anything – just open your browser and access the service. As quick and easy as surfing the web, and no extra software slowing down your computer or phone.
Con: Limited support
Although there often is some form on online support available (our own LS Express Start includes an exhaustive online help), cloud-based POS are usually easy and straightforward enough that no specialized support is required or offered. Retailers running large companies, and requiring tailored advice and consulting, may however decide to turn to a traditional deployment model which better fits their needs.
Pro: Backup of information
As all information is backed up automatically in the cloud, you don’t have to worry about losing your data in a computer crash. Tablet lost or stolen? No big deal: your key business data is all saved in the cloud.
As a company that develops both cloud-based and on-premises POS and management systems, we are in a privileged position to see the pros and cons of both models. Do not hesitate to contact us if you need help to understand which type of system would best fit your needs.