The Future of POS is the Future of Local Marketing

Integrated POS marketing machine

Amazon to Offer Kindle Checkout System to Physical Retailers was the headline in an article in the Wall Street Journal yesterday.  I have long thought that POS and other similar integrated services delivered via a combination of hardware, software and web was the key to cracking the holy grail of SMB marketing services.

In The Future of SMB POS Defined by GoPago’s Free POS System from October, 2012 I wrote:

Sometimes the lights go on and the realization strikes that a new metaphor has taken hold and will change the market going forward. That realization struck when I recently read about GoPago’s Free POS system for SMBs…..

The early creator of metaphor changing products sometimes reaps the benefits and other times the benefits go to better capitalized late comers. Certainly GoPago has no lock on this market. Square, Paypal, Bing and Google could all step in and have both distribution efficiencies and marketing clout that could give them an advantage in this space. Imagine Google offering up a free Moto/Android based POS system that also guides SMBs through a business center experience as the SMB gains familiarity with the many marketing options that Google offers. If I were Bing,in an effort to kick start their Local Business Portal, I would walk over to GoPago and hand them a check even if it meant the POS had to continue to use an Android based product.

I still believe that. More so now than ever. The market in the 15 months since I have written this has not stood still. Apple, Intuit, Square and Paypal have all made moves in this direction. Each with their own spin.

It is interesting that Amazon might be the first of the big players to offer up such an integrated solution. And of all the players they will have the hardest time overcoming the extreme distrust that the bricks and mortar world has of them. And that alone may prevent them from moving quickly enough to consolidate their position in this market.

But SMBs are a prickly and unpredictable lot (I know I was one for 20 years in a family business… and if you think I am prickly you should have met my father). But if the value is compelling enough, if the cost of the credit transactions is low enough and if the support is high enough it could happen.

Clearly POS is but one of the entrees into the world of captive solutions… But it is a very compelling metaphor for the integrated SMB solutions that are rapidly moving into the marketplace. Scheduling, billing and other services via PC are equally compelling in the service arena and in a broad sense can be viewed the same way.

Regardless whoever gets their first at scale will have a huge advantage in the future of retail and local search marketing. And payments, loyalty and and and…..

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10 thoughts on “The Future of POS is the Future of Local Marketing”

  1. Mike, if the price is right, you can bet that plenty of local SMBs will at least take a close look! I agree that their comfort level with technology may play a huge factor in the decision making process.

    Looks like a great future Case Study for Al Ries and Jack Trout’s classic book Positioning – http://amzn.to/1bdsU6h

    Highly recommend this book for anyone looking to be first into market or entering existing markets – which covers pretty much everyone :-)

    BTW – Coincidence that you can’t spell Positioning with POS?!

  2. This has come up a number of times at the BIA Kelsey shows I’ve attended. The thing I like about POS positions is there’s an extremely high switching cost. So if your initial upgrade over their current POS is so compelling, you’ve likely got them for quite awhile.

  3. @Scott
    Thanks for the reference. I will take a look.

    @David
    When they do take hold, it will shift the balance of power for many backend services… because the switching cost is so high a business won’t go out and easily switch credit card payment processors for a .5% savings for example… Whoever has that lock will be able to define future payment technologies and could even kickstart something like Bitcoin (as a way to avoid the Visas of the world).

    But those services, like in the case of Intuit, could also include webdesign and local marketing.

    It will be a brave new world.

  4. As we do have a “dog in the fight” named Snappay (our iPad/iPhone POS app) – what I can add is that it still appears there’s space in the POS channel for more players too! Pricing is yes def a factor but we’re all within a point or so of each other…so I can’t wait too to see what Amazon will bring to the fray too! :-)

  5. @Mike – as you well know, SMB’s would love to find a “… way to avoid the Visas of the world”, so it makes me wonder what Visa, MC/Amex are thinking about all of this.

  6. Applebees and Chili’s are placing tablets on every table. That is several thousand restaurants. You’ll be able to order from them, I suspect personalize your order (no mayo on that sandwich) and pay from the tablet. They will also have entertainment.

    Micros, a POS heavyweight in the restaurant and hotel business just announced a tablet deal with dell as the manufacturer.

    To acknowledge David’s comment earlier I met with a restaurateur the other day. He closed one restaurant about 2 years ago, is negotiating to open another. One of his comments was that he kept the POS system for installation into the new operation.

    As to the article: Isn’t there some irony that Amazon the great retail “killer” is offering up free tablet POS systems to retailers?

  7. I agree Mike. “Interchange zero” may become table stakes for integrated POS/workflow systems that monetize on marketing initiatives. Long way (very long way given the market) to go to make that a reality but companies like Amazon have the swing to do it – particularly if they decide to expand inventory management capabilities.

  8. @Dave
    Applebees needs to push those sorts of innovations out to the table and become more efficient because their food sucks… most restaurants that offer something unique do not….

    @Ted
    When you say “interchange zero” you are referring to processing fees?

    I could envision that someone like Amazon could even kickstart Bitcoin…and not have to give up that margin.

  9. @Ted
    It is clear that disruption is on the horizon for Visa, Master Card and the banks… as Andy pointed out that alone could cause a rush for the doors….

    The “shift to interchange zero” may or may not be a technological certainty as they claim in the article. With the future, in capitalism, nothing is that sure. The incumbents and everone else wants that revenue stream. Certainly it is easy to envision it going much lower.

    Either someone like Amazon will use it as a lost leader or bitcoin will mature into a full fledged zero cost payment system or some alternative will emerge at the under single digit arena. With the scale possible and the tools available there most certainly will be a precipitous drop.

    Zero? not likely. If it does reach zero on the face, there will be other costs that end up subsidizing it.

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