Closed Point of Sale Systems Need to Change

Closed-Point-of-Sale
I had an interesting conversation with a frustrated potential customer which I wanted to share. He was frustrated because his point of sale system, which I will not name here, is closed and will not let any 3rd parties read and send data to it. This is problematic for this customer because this set up does not allow him to implement a “best of breed” technologies and solutions. Instead, he is forced to pay for and use the products offered exclusively by his point of sale provider, which together, he explained, are marginal at best. I shared with him that “closed systems” are simply not where the market is headed. In fact, Modern Retail is seeing the complete opposite trend where POS system is open by nature.

If you look at what’s happening in the marketplace, point of sale providers such as Square are taking over. These systems are often web-based and extremely easy to implement. By the very nature of how these systems were built, they are open because in order to communicate with tablets, they needed to write an Application Programming Interface (API). This API is what sends data back and forth between the app running on the store’s iPad and their computer systems in the cloud.

I talked to one up-and-coming POS solution provider and they said everything, absolutely everything they do, is done through their API. This means every single piece of data in their POS system is accessible to them and all 3rd parties. Do you need access to customer data to integrate in-store loyalty programs with your website? No problem. Call their API and you access all the customer’s information, order history and where they sit with their rewards program.

You’re also starting to see established e-commerce service providers, such as Shopify, enter the point of sale market. These providers have made the data in their systems available to outsiders for a long time. Getting data out of Shopify and inserting data into Shopify is a simple a matter of reading their documentation and making the right calls to their API. New companies such as Zapier, IFTTT and ItDuzzIt have capitalized on this openness and allow end-user to set up connections between systems with little to no technical expertise. This trend will surely continue and will eventually extend to include all computer systems and services.

I’ve talked to a few of these closed point of systems vendors and honestly, I’m a bit horrified by their response. They have openly stated to me they do not want to make their systems open because they want to “lock customers into their solution.” I find this to be a very old school approach and have encouraged them to make their systems open so customers can implement best of breed solutions. Unfortunately, many point of sale companies have been doing business for decades, so their approach and culture is rooted in philosophies that pre-date the Internet.

Luckily, many of Modern Retail’s point of sale partners do not share in this belief and have either made their data available or are aggressively working on projects to make their systems completely transparent.