Business

How 'point of sale' became much more than a fancy calculator

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Media captionJohn Bruno, Chief Technology Officer at NCR Corporation, describes advancements in POS technology

You probably still think of it as a "cash register" - basically a fancy calculator and cash drawer that sits at the end of the shopping aisle just before the exit, which gives you the correct change on your way out.

Sure, it has a few more flashing lights than a few years ago, but it's still essentially a machine whose only role in life is to accommodate a transaction every few minutes.

Wrong.

The modern point-of-sale (POS) system is a tightly integrated computer that almost certainly knows all about your buying history, how often you shop online and what you're likely to buy next week.

It is also able to communicate along the entire length of the store's supply chain right back to the factory if necessary.

Not bad for a device that has its origins in the late 1800s and was used primarily for producing a simple receipt - one copy for the merchant and one for the customer.

It's come a long way, says John Bruno, chief technology officer at the National Cash Register (NCR) corporation.

"The first POS devices were wooden boxes, made by carpenters out of rosewood," he says.

"They were very mechanical, beautiful pieces of technology - some made with brass, some made with nickel."

NCR is the company that pioneered the early POS systems and is still at the forefront of their development.

That development has become faster since the 1990s.

A transaction was once seen as something that started and ended in the store. Shops knew very little if anything about the customer. In-store coupons and offers were "broadcast" for the benefit of everyone and anyone.

Well-known

Now, it's all about narrowcasting. These days the chances are very good that the shop knows a lot about you long before you have entered its premises. Loyalty cards for instance hold a treasure trove of information about their owners.

Computers can work out if you are sick and how often, the number of people you live with, if you have pets and can even make an educated guess as to your pregnancy status.

Mr Bruno realises that privacy is a concern.

Image caption Early cash registers were beautifully made - but did not do much compared with modern machines

"A consumer can choose to opt out or opt in, so a consumer may say, 'I agree to give up some privacy to get an offer tailored to me based on my presence and preference - but don't blast me.' So I think our customers are very aware of privacy and information but are working side-by-side with consumers."

Retailers are pushing harder to gather and use "big data" to refine their operations. This is especially important when it comes to the supply chain, because in an ideal world as soon as a product is taken off the shelves and paid for, a new one is instantly manufactured or shipped to replace it.

So whereas a few decades ago POS manufacturers would only be interested in designing a machine that suited the needs of the retailer, now they have to take into account the supply warehouse and the point of manufacture.

If a retailer is big enough and powerful enough, it can often dictate that new technology be used along the supply chain to work seamlessly with its own cutting-edge POS system.

Grand entrance

One of the biggest shifts recently in POS technology is to make the "point" mobile. Apple stores have championed this. Its "associates" interact with their customers and finish the transaction on the spot. Now others are following.

In New York's famous Macy's store, if you want a shoe in a particular size the retail assistant will look it up in a virtual stock room on a mobile device within seconds. Gone are the days of staring at the long flowing curtains for an agonising few minutes to see if shoes in your size will make a grand entrance in the hands of the shop worker.

Image caption Is this the future of the POS system?

You might think executives at NCR and other POS companies would fear the arrival of the smartphone and tablet.

But for them it is an exciting time, when everybody has a device and display readily available, which can be put to good use in the future.

Meanwhile even the most sophisticated POS systems are starting to come with some tablet element that can be detached at a moment's notice. POS makers acknowledge it is far easier to take the touch-based skills many people are now learning from a very early age - pinch, swipe and scroll - and incorporate them into their own devices, rather than inventing any new methods of inputting data that may incur hours of training.

In fact the user interface (UI) may be the single most important factor in the future of the POS system. Already, pictures and symbols have largely replaced words and letters, making each configuration easier to deploy especially in huge global supply chains.

We will all see POS systems becoming more customer friendly and ever present in our everyday lives.

So far the self-checkout has been targeted at consumers who have a little bit of pioneer spirit and plenty of patience.

But in time that will change, and hopefully with it the efficiency of the entire supply chain.