The Great POS Debate

Retailers used to buy only retail-hardened, proprietary POS systems. Then after a decade of arguing about open systems, pieces and parts, and ARTS standards, some retailers started buying inexpensive generic PCs and plugging in peripherals as needed. Now, the pendulum seems to be swinging back a bit to more retail-hardened, but open component systems.

But the debate rages on. Retail experts divide the POS debate into two camps: retail hardened and affordable. The retail hardened concept typically features proprietary, closed architecture designs that can be expensive but are highly durable. Its champions include IBM and NCR (although both offer POS systems with a standards-based architecture). The POS systems in the affordable school usually feature an open architecture design that is standards based. These systems usually have a low cost of ownership and are easily replaced. Vendors at the forefront of this school include Dell, HP, Wincor Nixdorf, Ultimate Technology and Fujitsu.

The choices are vast and the process of choosing a new POS system can be difficult, but the goal of POS selection today is the best total-cost-of-ownership (TCO). This debate expands the definition of TCO beyond the POS system itself. Today's leading CIOs look at more than POS. They also look at overall store systems architecture and chain-wide integration with plans for flexibility for unforeseen upgrades, integration with myriad other applications and databases, and possibly global expansion.

Hannaford Hardens with Architecture

"Our retail hardening is in the overall architecture," says Bill Homa, CIO of Hannaford Brothers, a large grocery chain in the Northeast. Homa is one of the early leaders in open systems, thin client and Linux, and he has strategized an in-store systems architecture for the future.

Homa's retail-hardened architecture is based on very thin, in-store hardware with as much processing as possible moved to a central site. Everything is Web-based and Linux. POS devices have virtually no moving parts: no hard drives, no fans, and no proprietary pieces and parts. "TCO is half the cost of what it had been," says Homa. Hannaford uses Wincor Nixdorf Beetle/S hardware with Retalix software running on Linux. All peripherals are migrating to USB so it's easy to replace units in stores without mistakes.

For maximum uptime and reliability, each lane can be operated independently for days if problems arise. The Wincor Nixdorf POS units "have a half-gig of flash memory," adds Homa. "If the network goes down, the only thing we lose is the ability to do debit."

This also helps cut maintenance costs. Homa uses IBM Tivoli for managing all end points on its networks, and Fujitsu for in-store maintenance. "It costs an average $300 for every trip for repair to a store.," Homa says. "Minimizing those trips can save hundreds of thousands per year. So we often wait and solve multiple problems with one call, splitting the savings with Fujitsu."

Simplifying POS

Cargokids!, a subsidiary of Pier 1 imports that designs and retails children's furniture and accessories, operates more than 60 stores located in six states in the Southeast. Current expansion plans call for the retailer to open 300 more stores by the end of the decade. To help this growth, Cargokids! turned to Dell to install a new POS system in all of its stores. The POS systems are built on Dell OptiPlex desktop computers. These systems add to the OptiPlex desktops, PowerVault network attached storage and PowerEdge servers that Cargokids! runs in its corporate office and datacenter in Fort Worth, Texas.

"Being able to deploy the same desktop systems in our check-out lanes that we have in our offices significantly simplifies management," said Ginny Carroll, director of IT for Cargokids!.

UPS Integrates for Flexibility

"For us, POS is not a store system," says Nick Costides, corporate strategy and retail technology group manager for UPS Stores and Mail Boxes Etc. "It is a business technology platform for franchisees. We have a global services business, so we need full integration with other applications and peripherals while minimizing the number of pieces of equipment in our locations."

Costides has adopted HP's low-priced, open, standards-based rp5000 POS devices running ISS Retail's TouchPointPOS application connected to central servers over a broadband VPN (virtual private network). It has integrated card swipe and cash drawer and runs a host of special peripherals, including thermal shipping label printers and scales for weight and measure. The system is Microsoft XP-based and 25 percent .NET "so it has messaging and runs multiple applications. Workflow is very important to us."

"We have a good TCO," says Costides. "Versus a standard PC out of the box, we get savings from reducing the number of peripherals and getting the integration and flexibility for the future. Adding components actually adds more to the cost with a box PC than having retail hardware with integrated swipes and drawers."

Adds Costides, "We also implemented a highly integrated reporting and alerts structure. Every time a cash drawer closes, it sends data back to a suite of central servers for reporting and management. We have created a near-real-time data warehouse with reporting and alerts. The system also consolidates processes that used to require two lanes, allowing faster transactions and an extra lane for peak periods.

"And it automatically configures for each associate," adds Costides. "For example, if a left-handed associate takes over a lane, the touchscreen automatically flips over for a lefty¹s convenience."

Flash Foods

Flash Foods is a chain of more than 163 convenience stores in the Southeast. In 1998, the chain installed Pinnacle software in each store with generic PCs. In 2002, the firm piloted NCR 7454s in a few stores, and is now rolling out NCR POS systems chainwide.

"The TCO and ROI on the new systems is better," says Jenny Bullard, CIO. "We had three to five years of life from the old PCs, and plan to get six to seven years plus a 50 percent maintenance cost reduction on the new NCRs. The generic PCs were susceptible to dust and liquid damage common in convenience stores; we had to replace a lot of hard drives and other parts.

"We also get a merchandising advantage. The new integrated systems take up a lot less space, which allows more space for impulse item displays at checkout. They are also more attractive for customers."

Bullard has elected to retain internal repair staff for on-the-road maintenance. "It costs about the same as outsourcing, and we get more control using in-house technical support."

 

It seems many retail executives are achieving higher TCO and ROI using open components in one retail-hardened package.

by Mark Frantz

Retailers used to buy only retail-hardened, proprietary POS systems. Then after a decade of arguing about open systems, pieces and parts, and ARTS standards, some retailers started buying inexpensive generic PCs and plugging in peripherals as needed. Now, the pendulum seems to be swinging back a bit to more retail-hardened, but open component systems.

But the debate rages on. Retail experts divide the POS debate into two camps: retail hardened and affordable. The retail hardened concept typically features proprietary, closed architecture designs that can be expensive but are highly durable. Its champions include IBM and NCR (although both offer POS systems with a standards-based architecture). The POS systems in the affordable school usually feature an open architecture design that is standards based. These systems usually have a low cost of ownership and are easily replaced. Vendors at the forefront of this school include Dell, HP, Wincor Nixdorf, Ultimate Technology and Fujitsu.

The choices are vast and the process of choosing a new POS system can be difficult, but the goal of POS selection today is the best total-cost-of-ownership (TCO). This debate expands the definition of TCO beyond the POS system itself. Today¹s leading CIOs look at more than POS. They also look at overall store systems architecture and chain-wide integration with plans for flexibility for unforeseen upgrades, integration with myriad other applications and databases, and possibly global expansion.

Hannaford Hardens with Architecture

"Our retail hardening is in the overall architecture," says Bill Homa, CIO of Hannaford Brothers, a large grocery chain in the Northeast. Homa is one of the early leaders in open systems, thin client and Linux, and he has strategized an in-store systems architecture for the future.

Homa's retail-hardened architecture is based on very thin, in-store hardware with as much processing as possible moved to a central site. Everything is Web-based and Linux. POS devices have virtually no moving parts: no hard drives, no fans, and no proprietary pieces and parts. "TCO is half the cost of what it had been," says Homa. Hannaford uses Wincor Nixdorf Beetle/S hardware with Retalix software running on Linux. All peripherals are migrating to USB so it's easy to replace units in stores without mistakes.

For maximum uptime and reliability, each lane can be operated independently for days if problems arise. The Wincor Nixdorf POS units "have a half-gig of flash memory," adds Homa. "If the network goes down, the only thing we lose is the ability to do debit."

This also helps cut maintenance costs. Homa uses IBM Tivoli for managing all end points on its networks, and Fujitsu for in-store maintenance. "It costs an average $300 for every trip for repair to a store.," Homa says. "Minimizing those trips can save hundreds of thousands per year. So we often wait and solve multiple problems with one call, splitting the savings with Fujitsu."

Simplifying POS

Cargokids!, a subsidiary of Pier 1 imports that designs and retails children's furniture and accessories, operates more than 60 stores located in six states in the Southeast. Current expansion plans call for the retailer to open 300 more stores by the end of the decade. To help this growth, Cargokids! turned to Dell to install a new POS system in all of its stores. The POS systems are built on Dell OptiPlex desktop computers. These systems add to the OptiPlex desktops, PowerVault network attached storage and PowerEdge servers that Cargokids! runs in its corporate office and datacenter in Fort Worth, Texas.

"Being able to deploy the same desktop systems in our check-out lanes that we have in our offices significantly simplifies management," said Ginny Carroll, director of IT for Cargokids!.

UPS Integrates for Flexibility

"For us, POS is not a store system," says Nick Costides, corporate strategy and retail technology group manager for UPS Stores and Mail Boxes Etc. "It is a business technology platform for franchisees. We have a global services business, so we need full integration with other applications and peripherals while minimizing the number of pieces of equipment in our locations."

Costides has adopted HP's low-priced, open, standards-based rp5000 POS devices running ISS Retail's TouchPointPOS applica-tion connected to central servers over a broadband VPN (virtual private network). It has integrated card swipe and cash drawer and runs a host of special peripherals, including thermal shipping label printers and scales for weight and measure. The system is Microsoft XP-based and 25 percent .NET "so it has messaging and runs multiple applications. Workflow is very important to us."

"We have a good TCO," says Costides. "Versus a standard PC out of the box, we get savings from reducing the number of peripherals and getting the integration and flexibility for the future. Adding components actually adds more to the cost with a box PC than having retail hardware with integrated swipes and drawers."

Adds Costides, "We also implemented a highly integrated reporting and alerts structure. Every time a cash drawer closes, it sends data back to a suite of central servers for reporting and management. We have created a near-real-time data warehouse with reporting and alerts. The system also consolidates processes that used to require two lanes, allowing faster transactions and an extra lane for peak periods.

"And it automatically configures for each associate," adds Costides. "For example, if a left-handed associate takes over a lane, the touchscreen automatically flips over for a lefty's convenience."

Flash Foods

Flash Foods is a chain of more than 163 convenience stores in the Southeast. In 1998, the chain installed Pinnacle software in each store with generic PCs. In 2002, the firm piloted NCR 7454s in a few stores, and is now rolling out NCR POS systems chainwide.

"The TCO and ROI on the new systems is better," says Jenny Bullard, CIO. "We had three to five years of life from the old PCs, and plan to get six to seven years plus a 50 percent maintenance cost reduction on the new NCRs. The generic PCs were susceptible to dust and liquid damage common in convenience stores; we had to replace a lot of hard drives and other parts.

"We also get a merchandising advantage. The new integrated systems take up a lot less space, which allows more space for impulse item displays at checkout. They are also more attractive for customers."

Bullard has elected to retain internal repair staff for on-the-road maintenance. "It costs about the same as outsourcing, and we get more control using in-house technical support."

 

It seems many retail executives are achieving higher TCO and ROI using open components in one retail-hardened package.