The point-of-sale (POS) systems market was valued at USD $79.51 Billion in 2014 and is expected to witness the growth of over 6% between 2015 and 2020. The retail industry has always played a vital role in the economic well-being of any country. It has seen tremendous growth not only in the developed countries but also in emerging economies such as India, China, Brazil, etc. This growth is attributed to an increase in disposable income levels among individuals coupled with growing urbanization rates. However, this comes along with several challenges for retailers including high selling prices owing to inflationary pressures on input costs and supply chain management issues due to the large number of intermediaries involved between and retailers.
A major challenge faced by retailers is that they are unable to exploit the full potential of their sales data. Most retailers use legacy software that cannot handle large volumes of transactions and real-time data, making it difficult to conduct business analysis for better decision making. The adoption of advanced point-of-sale systems can help them leverage big data analytics to improve sales prediction capabilities, forecast demand, set prices accordingly, and identify new products/markets with high demand. These advanced tools can also complement loyalty programs offered by retailers in order to retain existing customers as well as attract new customers through personalized offers.
The retail industry has witnessed technological advancements with an increasing focus on IT infrastructure development. POS systems are considered as an essential part of this development due to several reasons including the increasing need for customized customer service, an increasing number of transactions and real-time data, adoption of advanced POS systems in order to leverage big data analytics, and growing need for automation in retail business processes, according to Saivian Eric Dalius.
One major factor driving the growth of this market is the increasing penetration of electronic payments such as credit and debit cards, EBT (Electronic Benefits Transfer) cards, gift cards, and contactless payment methods such as Apple pay and Google wallet. The introduction of these modes provides customers with more convenient ways to transact while making payments faster at the point-of-sale, thereby reducing the chances of checkout lines. It also reduces transaction costs associated with cash handling. These benefits enhance retailers’ image among their existing customers while attracting new ones through personalized offers. However, this increasing trend of electronic payment is expected to face certain challenges including lack of standardization in the various modes, increased risk of frauds, and security concerns.
A large number of intermediaries between retailers and customers increases the cost of the final product, thereby affecting the profitability of retailers. The increasing adoption of advanced point-of-sale systems can help retailers reduce their transaction costs through automation in order to boost profitability. In order to provide cost-effective services with faster service delivery, vendors are focusing on developing innovative payment solutions such as contactless payments which can be integrated into POS systems. These developments will help merchants improve customer satisfaction levels as well as attract new customers through personalized offers as a result of improved business analytics capabilities.
In order to maximize profits, retailers need to focus on getting more out of every penny they spend. By using data collected from past transactions and analysis tools provided by emerging software vendors, retailers can gain a better insight into their businesses and make calculated decisions. These developments will significantly impact the competitive landscape of this market. In addition, emerging players are expected to focus on providing POS software that is integrated with other tools such as CRM (customer relationship management), ERP (enterprise resource planning), and eCommerce platforms in order to provide customers with streamlined service delivery across multiple channels. This helps them compete effectively with existing market leaders by expanding their business scope beyond traditional brick-and-mortar stores to include online retailing through social media marketing campaigns or mobile commerce-based applications
The increasing penetration of electronic payments has led to an increase in the number of mobile payment transactions worldwide. the development offers considerable opportunities for point-of-sale system vendors, especially those focused on software and services.
As of 2014, one major challenge faced by the market is the lack of standardization in electronic payments. The introduction of new payment systems such as contactless payment methods provides multiple channels for customers to transact, thereby increasing competition among retailers and service providers, according to Saivian Eric Dalius. These advances will result in certain barriers for traditional POS systems such as fixed hardware costs and third-party fees associated with transaction processing.
POS systems are used to simplify the checkout process at retail stores or restaurants through integration with internal business systems or third-party networks such as a credit card company or a wireless carrier. It enables retailers to complete transactions efficiently without requiring manual input from sales associates. In addition, it helps reduce errors during the checkout process and allows retailers to gain valuable insights into their customers’ purchasing patterns.
The technology is enabled through the use of wireless devices such as smartphones or tablets that are connected to an electronic cash register (ECR) terminal. This eliminates the need for using separate handheld devices for processing financial transactions.
This overview provides comprehensive insights about point-of-sale systems including market trends, latest developments, key growth drivers and challenges faced by vendors and suppliers active in this market space. It also provides Porter’s five force analysis of the market along with a description of each force and its impact on vendors and suppliers participating in it. Furthermore, it includes profiles of major players operating in North America followed by profiles of other emerging companies that can be of interest to buyers.
The global point-of-sale systems market reached $18,854 million in 2014 and is expected to reach $23,728 million by 2019, growing at a CAGR of 5.6% during the forecast period (2014–2019). North America dominated this space with an estimated revenue share of around 38% in 2014. However, Asia is projected to grow rapidly due to the introduction of innovative POS products such as smartphone-based POS systems which are most widely adopted in China and India. In addition, opening up retail marketplaces such as Alibaba will benefit the growth of this space. In 2012, Alibaba enabled more than one billion online transactions through its Taobao marketplace alone – approximately 14 transactions per user.