Key Considerations For Retailers As POS Moves To The Cloud

13 Oct 2014

I received an email the other day from Greg Buzek, Founder and President of IHL Group, announcing the release of their latest report Cloud POS: Why The Time Might Be Right. In Greg’s blog, he highlighted some of the key findings from the report, and noted how quickly the idea of a cloud POS solution has gone from something that was scoffed at two years ago to a viable solution today.

He’s right. It was just two years ago that a Forbes.com article entitled “6 Shining Examples of Cloud Computing In Action” provided convincing data from a survey conducted by The Economist Intelligence Unit and IBM. According to that study, more than half of the respondents (62%) indicated that the cloud was a leading priority for their IT organizations–-a slice of data that suggested the cloud was being viewed by many industry professionals as an IT-only solution.

Yet, at the same time, there were a handful of online retailers, such as Etsy and Netflix, who were gaining flexibility, visibility, and scalability by utilizing cloud resources – something that just couldn’t be found using traditional data centers.

Which is partly why the idea of a cloud POS solution is garnering more attention than ever before: The retail landscape is changing so fast and demanding such a consistent view of data, that bringing together previously siloed systems to deliver one version of truth just makes sense.

And, according to the most recent annual IHL Store Systems Study, nearly two-thirds (63%) of retailers are planning on doing just that. This contingent of respondents said that as part of their plans to replace POS software within the next 12 months, a “single transaction engine across channels” is a primary driver.

Of course, there are other benefits that make moving POS to the cloud an attractive solution for retailers, such as:

  • Seamless Integration (loyalty programs, gift cards, payments, etc. )
  • 360 degree access to data – anytime, anywhere
  • Instant Upgrades
  • Business Intelligence/Merchandising – cloud-based systems utilizing big data are more suited to developing sales patterns and customer patterns than traditional legacy systems. This will allow the merchant to tailor their sales targeting and promotional efforts to a much higher level.

However, as we always try to communicate to our customers, it’s important to consider all of the factors involved in a solution before making an investment of any kind. Here are some key considerations for those looking to make the move to a cloud POS platform:

1.Offline operations – Because a continuous Internet connection is required for operational efficiency, retailers need to consider local or regional shadow-servers in the event of connectivity loss.

2.Network architecture – Retailers need to consider today’s bandwith vs. tomorrow’s needs. How will you handle the redundancy in the event of an outage and what will be the tolerance for outages and back-up if 100% uptime is required? Consider setting up networks with primary, secondary, and terciary methods. In a cloud-based environment, the highest level of reliability is necessary to maintain operational continuity.

3.Data security – Multiple levels of security must be considered to protect not only PCI data, but customer data, as well. This is certainly a looming concern with data being linked between stores and web transactions.

So, we want to know: is your business operating on a cloud POS platform? Join our LinkedIn group to share your ideas or chat with other industry experts about what it takes to be a Level 10 in the retail IT industry! We’re always online, so if you’d rather just stay up-to-date on the latest developments in retail/hospitality technology, you can always follow us on Twitter @level10 or connect with us on Facebook.