Pen and Paper vs Traditional POS vs Cloud Based POS
I want to preface this article by stating that the opinions I express are my own and have come about from having worked for 3 different POS companies in the selling, initial onboarding and ongoing support of Point of Sale systems for 3 years.
In this time, I couldn’t begin to guess how many businesses I have spoken to on the subject of Point of Sale. What is apparent from these interactions is that there are some pretty clear pros and cons to each of the types of POS systems out there. You might be thinking about switching from one to another or wondering how to make a decision on this without having to go through the process of trialing each system to see what works best. In this piece I hope to make life a little easier (Just like a good POS system should do) by comparing the different types that are out there.
Pen and Paper
The traditional method of running a retail business has always been (up until the last 15 years or so) to use pen and paper. I think it would be unfair to rubbish pen and paper entirely as a method of running a business, but there is a growing sentiment that it has had its day.
Let’s look at what pen and paper has going for and against it.
First off is the cost. There isn’t much of a cost at all, unless you want to talk about the environmental cost of using paper to run a business, but that might be a topic for another day. Generally speaking, when I’ve spoken to someone running their business with pen and paper and asked what has kept them using it to this point, cost is almost always the first thing that is mentioned. It is often followed up with some line about their perceived lack of “tech-savvy-ness”.
To this point though, I would usually ask about the amount of time it takes them to complete certain tasks such as: figuring out how well a product is selling, performing an inventory count or knowing what a customer tends to buy.
Unsurprisingly the answer tends to be ‘quite a while’ or ‘we know by feel’. The point here is that while the monetary cost of pen and paper appears to be very small, it’s the time spent trying to make sense of the numbers and piles of pages that really gets people.
Some other things that work in pen and paper’s favour is the lack of setup time required. Pop down to your local stationary store, draw some grid lines on a page and away you go.
The other is something I touched on before and that’s the fact you don’t need to be ‘tech-savvy’. Although this is all relative, as some would say (as in me) that trying to make sense of mountains of paper in filing cabinets and doing all the necessary mathematics manually; is actually quite a bit harder than using a computer.
|No setup||No integrated accounting|
|Cheapest option||No online integrations|
|Minimal training||No integrated payments|
|No internet required||No backup of your data|
|Lack of guidance|
|Calculating discounts is manual and slower|
For the sake of clarity, a traditional Point of Sale or ‘Legacy POS’ system is any system that runs on a computer, but is not ‘cloud based’.
Most of the traditional POS systems out there came about in the early 2000’s and there are plenty still going today. Just as the other POS systems do, they certainly have their reasons for and against.
The first thing that really works in favour of these traditional POS systems is that they are often very industry specific. Certain business types often have one or two very specific needs that relate to their business and it is true that a number of the traditional POS providers tend to have some highly specified POS offerings that aim to cater for these needs. Though this is not to say there aren’t cloud systems that can do the exact same thing.
The next thing is again the price. Now this can be a pro or a con depending on your viewpoint but the fact is that most traditional POS systems charge once off for the program. In the same way that you might pay for Microsoft office once, and then it is yours forever on that computer. I can understand why this can be viewed as a point towards a traditional POS but there’s an important bit of context here; how much is that initial cost?
If you were to go onto the website of a Legacy POS provider and look for the page that says ‘Pricing’, there is a very good chance that you will either not be able to see a page for this at all, or when you go onto the pricing page, you’re met with quite a lot of words and a distinct lack of numbers and $ symbols. Instead, you are instructed to ‘Book a Demo’ only after which you will be told the price. This is because in many cases Legacy POS systems cost several thousand dollars, some even crest the 5 figure mark. I’ve had many conversations over the years with businesses that want to change their POS, as they realise that the system is not working for them, but they feel obliged to stay with it because they’ve spent several thousand dollars to get the software in the first place.
|Often the fees are “One-off”||Initial setup fees are generally higher|
|Traditional POS system are sometimes more industry specific||High support fees (paid support)|
|Sometimes legacy systems become unsupported|
|Lack of product updates|
|Data is stored on PC and not online (if the program crashes, you lose your work)|
|If program isn’t the right fit, can lock you in with the sunk cost fallacy.|
Cloud Based POS
Lastly, we arrive at the cloud based Point of Sale systems. The hot new trend. The emerging superpower. All that jazz.
There are a number of reasons why businesses are turning to ‘the cloud’ more than any other type of system these days. Not least of which, is the flexibility and continuous development that a cloud based system can provide. For as long as people have traded money for products it has always been the same deal; I buy the product and if the product becomes outdated or other products start to surpass it, well tough, I guess I’ll just need to buy the newer and better version. This is no longer the case. With cloud POS systems you don’t just purchase the product itself, but also the ongoing development and support that backs up an ever changing system that aims to keep up with the latest trends.
Retail has made some immense steps in the very recent past. With the emergence of more and more online selling platforms to the introduction of highly in-depth accounting systems, to the beginning of the buy now, pay later craze; having a POS system that isn’t committed to developing itself to meet the new demands of retail just doesn’t make sense.
This isn’t to say that cloud based POS systems are always perfect, it’s true that after initial sign up there is some necessity to input all of your products and set up the system to reflect your needs. But with every good cloud POS company, there is a robust knowledge base of help files and videos aimed at making life easier for the user. In Hike’s case, we even offer 24/7 email and chat support and personalised onboarding services to ease this transition period.
Cloud based POS systems also make life much easier to do day to day simple tasks. All of the tasks I mentioned earlier that pen and paper struggles with, can be done instantly with a cloud system.
|Allows for omni channel selling – online stores||Some initial setup period is often required|
|Accounting integrations to save time||Digitalising product lists to be put into the system|
|Easy to view sales history – Customer buying habits||On-going fee (however can be cancelled anytime)|
|Integrated gift cards|
|Auto calculating discounts|
|Manage inventory/purchases all on one system|
|In depth reporting available at a glance|
|Accountability fur users/increased managerial oversight|
Times are changing and retail is moving forward with speed. Business owners are finding themselves spread across more tasks than ever before and the payoff for having a system that can take some of these pressures off the business owner is remarkable.
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