Point-of-sale (PoS) technology has come a long way since the days of antique tills with hair triggers, quick-fire pricing guns, and rusting delivery bicycles. Today, bar coding seems to be a staple in even the smallest outlets. Applications such as CRM, credit checking, and inventory updating are commonplace PoS features. And even joined-up integration with back-office systems such as ERP and material requirement planning is not unusual.

Moreover, these days there may even be scope for resellers to make some money out of PoS technology.

Tony Revis, general manager at PoS hardware manufacturer, Extech Instruments, believes that the PoS market has evolved so far, and that the phrase “point of sale” has become an anachronism.

“Point of sale is an interesting term, but it should perhaps be changed to point of service,” he said. “This would allow for a broader consideration of what is happening in the real world, such as online merchandising and ordering, and home delivery rather than people coming to stores. And there is after-sales servicing.”

He pointed to “significant” legislative changes, such as the stipulation and enforcement of more accurate pricing policies. These are part of a trend that has driven demand for such technologies as electronic shelf-edge labelling and price look-up systems.

Revis added that substantial social change has also been a driver in this process. “Less and less time for browsing means less time for shopping,” he said. “Retailers need to be quick. Hence there is a need for line-busting and self check-out technologies that check customers out at the point of selection or service, rather than having them pay at centrally located tills.”

There are also the emerging markets for integration and promotional PoS technologies, and the market outlook is a sunny one. But what part does the channel play in this?

Jacqui Sasserath is product manager at Microsoft Retail Management System, which helps independent retailers track and integrate PoS business processes with inventory and supplier management. She believes that retail is still very much an expanding channel market.

“We have seen a number of new entrants in the reseller channel, as well as a broadening of portfolios among existing partners,” she said. “I see it as an area of fantastic partner opportunity. The retail ERP space is looking like a much more mature and productive environment for the customer. We’ve also seen considerable consolidation and partnering. The key resellers are often teaming up with other partners to offer a connected solution that meets customer requirements, rather than trying to shoe-horn their own offering to fit the customer.”

Bill Thompson, channel manager at NCR’s Retail Solutions Division agreed. “The PoS reseller channel is extremely healthy,” he said. “Retailers are increasingly demanding more sophisticated technology to keep pace with changes in their businesses. Resellers can help them achieve this.”

But isn’t this all a little to good to be true? Surely, with the high street under mounting pressure from the web and other emerging sales channels, retail technology is something VARs ought to approach with caution.

Thompson conceded that the retail sector is likely to witness further consolidation this year, but he believes that this is definitely a positive, rather than a negative development.

“Consolidation occurs particularly where there is a need or opportunity to gain scale and enhance product offerings to counter competitive market force, decrease the cost base, increase sales volumes, or unlock operational synergies,” he claimed.

Therein lies the reseller oppor-tunity. The argument is that retailers are looking to maximise efficiency in areas such as PoS technology because of market pressures.

“Smaller multiples and indepen-dent retailers are recognising the need to compete for sales by increasing the efficiency of their operations, the range of products on offer, and introducing sales promotions,” Thompson said. “By joining up their core processes, from buying and merchandising, through to allocation, stock control, replenishment and forecasting, technology can play an important role in achieving this objective.”

He added that more and more retailers will migrate to PC-based electronic PoS (EPoS) systems to access sales techniques that have traditionally been the domain of larger retailers. The need to cut operational costs will also continue to be a driver, particularly in areas such as exception analysis and reporting, which enables retailers to spot inconsistencies such as staff theft. The investment cost is low in exception analysis and reporting, and returns are high and rapid.

Richard Goodley, managing director of retail-focused Microsoft partner Davidson-Richards, believes cautious optimism is in order.

“The market is very much in a state of flux, but I wouldn’t say it’s growing or shrinking,” he said. “Many channel players are also small vendors, having written their own products and sold them to their captive markets.

“It is becoming increasingly difficult to maintain and improve these products in line with the competition, so many are considering their options.”

Despite this apparent degree of caution in the marketplace, Goodley believes that the prevailing conditions are essentially quite fertile.

“Although negative noises are being made about all things retail, the fact remains that organisations are always looking to maximise efficiency,” he said. “If a demonstrable, quick return on investment can be proven, then there will be more commitment to new projects.”

Moreover, it seems that there is not only new business from PoS, but also business from the replacement of systems. Rod Barlow, sales director at reseller Retail Systems, said: “It’s not just retailers moving to EPoS for the first time that are the best prospects. More than half of our Microsoft RMS customers have replaced systems supplied by other EPoS providers.”

Chris Barling, chief executive of e-commerce and EPoS vendor Actinic, cited the SME space as a key emerging area in the sector.

“According to the Small Business Service, there are 159,050 small and micro retailers in the UK,” he said. “If you enter the average small shop, you’ll see that most do not use PoS systems. Yet in the US virtually every retail outlet does. With PCs becoming cheaper and more reliable, and better entry-level PoS systems available, there is plenty of room for growth in the lower end of the market.”

This argument is reinforced by figures from market watcher IGD, which estimates the number of UK convenience stores to be 52,000. These are visited by over 10 million people a week, and generated sales of almost £24bn last year. Total grocery sales were worth £120bn during the period.

This, ventures Barling, represents a good opportunity for smaller channel players, especially those that already enjoy relationships with small retailers. However, he warned that with specialist skills required for PoS implementations, resellers will need a lot of support from vendors, as they can’t afford to specialise.

Many smaller vendors have indeed consolidated, according to Sasserath. This could signify pain for that end of the market.

“However, we have prospects and customers that still need the boutique and niche services of the small business vendor. The latter can provide perhaps local support or specific, tailored services and add-ons for very particular vertical needs,” she said.

A common bone of contention is that smaller players get squeezed in this way. According to Goodley, it is the single biggest factor currently having an impact on the channel. What is needed, he suggested, are professional, accredited channels.

He said: “To be a member you must achieve basic technical competencies that other companies do not have to demonstrate. This gives retailers a range of suppliers to choose from for the same product. It is a system that keeps costs competitive and drives up standards of service.”

So how else can resellers take advantage of the PoS market?

Goodley said channel players should choose their product sets carefully, to establish themselves well within their specialist markets and – most of all – do their jobs well. If they achieve this, they can’t fail, he said.

Sasserath cited two factors that resellers ought to be seriously thinking about: teaming up with other partners, and what she called ‘focus’.

“Teaming up doesn’t threaten your business, it drives further opportunities, and ultimately leads to greater profitability for all partners involved,” she said. “Resellers cannot be all things to all customers. They must recognise their core skill set and en-sure they package and promote their company accordingly for prospective customers. End-users can directly increase their business performance by taking advantage of the skills and expertise that resellers offer.”

Revis stressed the importance of approaching prospects in a consultative way. He warned that resellers should not expect to get rich selling “a couple of commodity PoS terminals”.

“Work with regional and specialist retailers to update their entire PoS experience making it easier to shop and check out; don’t forget online options but with efficient supply-chain implementation,” he added.

Further opportunities lie in opening up new areas of functionality according to Neil Seekings, iPoS product manager at EPoS Logic. IPoS is a browser based .net EPoS product that brings ASP technology to the terminal level in-store. It enables integration of functions such as the linking of special offer advertising to stock at the point of sale, so advert streams can be changed when stock levels become critical.

Seekings said that the emerging kiosk market is an area to watch, but strong integration skills will win the day. Others meanwhile, mention key niche markets, technologies and verticals, pointing to managed services opportunities such as helpdesk support, and the project management of technology roll-outs.

But differentiation is the key, according to Thompson. “Most resellers offer core PoS and retail technologies. But the most successful ones are those able to define and develop their own unique selling points,” he said.

The technology then, is there, and a genuine channel opportunity could be too. It is simply a case of picking the right market.