Risks of an Outdated or an Ordinary POS System

After an unpredictable few years in retail, it’s perhaps no surprise that many retailers have decided to ‘sweat their assets’ and hold on to their POS systems for longer than in the past. Currently, only 21% of retailers are using POS software they’ve adopted within the past two years, and more than 40% of POS software is over five years old.

So opportunity is abundant in the liquor retail market, for those retailers who can harness it. One of the ways they can do this is by ensuring that they’re embracing integrated wine and liquor store POS technology. Here’s some of the key ways that an integrated POS systems for wine and liquor can underpin growth strategies for wine and liquor stores:

We explore the eight key consequences of using an outdated POS and how modern POS systems benefit retailers:

Outdated POS system risks

1. POS system security risks
Older systems are likely to be more vulnerable to security breaches and cybersecurity attacks. Vendors naturally tend to focus on supporting and securing the latest versions of their systems – hackers know this and look for POS software vulnerabilities, seeing them as ‘easy targets’. Retailers running old software are therefore at the biggest risk of POS software vulnerabilities, risking financial losses, legal liabilities and a damaged reputation.

2. Lack of integration
A retail business runs on interlocking processes – and for maximum business efficiency, the systems that run these processes must be able to communicate and exchange data. Inefficiencies in retail POS occur when these systems are not integrated.

3. POS System Performance Issues
Older POS system tend to run more slowly than their modern counterparts. POS system performance issues are because:
a) applications are not optimised.
b) applications are not compatible with newer hardware and cannot take advantage of faster processor and storage speeds.
c) applications are not compatible with the latest versions of operating systems.

POS system performance issues result in slower transactions, checkout delays and customer dissatisfaction. The impact of ineffective POS on sales is reduced revenue and profit.

4. Lack of support
One of the consequences of using an outdated POS can be a lack of support. Vendors provide support – in the form of new fixes and patches – for a limited period of time. After this, support is non-existent or is on a ‘best efforts’ basis, meaning that if you hit an issue, it can take considerably longer to fix, if at all. Extended failures impact service and are another potential source of customer dissatisfaction and lost revenue.

5. On-premise only
Older POS systems are often on-premise software, rather than cloud based. Ordinary POS system disadvantages include significant investment in software; expenditure on servers and storage; in-house staff needed to manage the system. Whereas cloud-based, modern POS systems benefits include: a Software-as-a-Service (SaaS) payment model; no in-house hardware or staff; and with all upgrades managed by the vendor, reduced disruption and greater stability.

6. Unsophisticated analytics and reporting
Business analytics and dashboards have become increasingly sophisticated in recent years, and one of the consequences of using an outdated POS is that it may not be able to provide the level of detailed and real-time analytics that today’s retailers need to make smart business decisions.

7. Lack of flexibility
Retail customers are always demanding more – new payment types, new ways of interacting (such as mobile POS, or click and collect). Older, more rigid POS systems may not have the flexibility to meet these demands, or at least not without a lot of time-consuming changes, meaning the retailer is late to the market compared to their competitors.

8. Not compliant with industry regulations
Legislation, especially around payments, changes over time and the consequences of using an outdated POS may be that it is not equipped to meet or enforce current standards.

Sticking with an old system has pitfalls and may end up costing more than it saves. An outdated POS system risks greater costs, customer dissatisfaction and reduced competitiveness in the market. So whilst ignoring POS system upgrade necessity might seem like a money saver in the short term, the best strategy for success is to harness the power of modern POS system benefits.

FAQs:

What are the benefits of integration within a POS platform?

Retail processes are interlinked, so one process must be able to receive data and information from another. For example, information from the sales process must be able to update the inventory system to show that the stock has declined by the number of items sold. The risk of not doing this is that updates are not made in real time, inventory records are inaccurate and re-ordering cannot be automated. This can lead to cash being tied up in overstocking, or sales being lost through stock outs.

Why are cloud-based systems more stable and reliable?

With a cloud-based system, the vendor manages the software and the hardware, and the retailer simply pays a fee for the software as a service. The vendor ensures the retailer always has the required hardware capacity and will expand that capacity on demand. The retailer does not need to upgrade the hardware or software – exercises that can cause considerable disruption when done in-house. When patches and fixes are needed, the provider implements them – so cloud software is always available, always secure and always has sufficient hardware resources, making it highly stable and reliable.

Content Sources:

Aptos

Retail Consulting Partners

Fit Small Business

Forbes