The Effects Of POS Implementation And Retail Technology On Sales And Profitability

 It has been over 20 years since the introduction of the Personal Computer (PC). Roughly five years after its invention in 1980, retail stores began to put the PC to use in their stores and head offices. Prior to this development small and mid-sized1 retailers2 mainly relied on either electronic cash registers that simply gave a sales total for the day or more sophisticated registers that provided sales by department reporting via a cash register tape at the end of the day. Far too expensive for small retailers, there were also the more sophisticated registers used by larger retailers that were connected to mini or main frame computers to track individual sales by product number.

 With the growing popularity of the PC, programmers started to write Point of Sale, Financial and Inventory programs for smaller retailers. The first of these systems started appearing in 1983 but were very primitive and did not provide extensive integration or functionality. Over the past fifteen years systems have improved dramatically and have become almost as sophisticated as large store systems. Many of the programs now available were originally written in DOS but have been converted to the Windows operating system. There is not much functionality that large stores have that is also not available today to small-to-mid-sized stores.

This study was conducted in 1998 using a field research team that interviewed 580 Independent Retailers via phone calls that lasted on the average 30 minutes. These retailers were using integrated Point of Sale, merchandising (inventory control) and customer profiling software. They were probed for satisfaction with their systems as well as increases in sales and decreases in operating expenses. This study did rely on the opinion of the retailer and clearly has a margin of error based on the fact that sales increases (although documentable) could not be totally attributed to the deployment of technology. The study also found that the newer the system, the lower the sales increases attributed to the technology, and also a high correlation with low sales increases and dissatisfaction with the technology. And although the study is now almost 5 years old, the results would likely be even more impressive today as software has gained so much additional functionality over this time frame.The Effects Of POS Implementation And Retail Technology On Sales And Profitability