Electronic Point of Sale (EPOS)

Electronic point of sale (EPOS), also called more simply point of sale (POS), is a system that performs all the tasks at checkout and provides transactional data. The POS data can be shared and can be used to aid vendors in tracking merchandise on consignment, defined by Michael Levy and Barton Weitz as items not paid for by the retailer until they are sold.

Checkout is the location where transactions occur usually involving the exchange of funds (cash, credit, debit, or checks) for products or services received. POS provides data when a transaction occurs using specially designed hardware and software. The EPOS can be thought of as an updated, data-rich version of the cash register. Data are useful for sales tracking, financial transfers, and inventory control. For example, a store or restaurant can see immediately whether or not a coupon offer or other promotion is popular and can change advertising and promotion to produce better results. Research studies on POS systems show that they provide agility, better alignment, and improved performance. For example, Celik Parkan studied eight Hong Kong drug stores and found significantly improved performance after they added POS systems.

POS terminals can stand alone or be connected to store headquarters or to greater systems that track, for example, all grocery store sales of a particular cereal in a single day. Stores may collaborate with a marketing research firm conducting these types of mass-market analyses. In this case, the sale registers are connected to a server or multiple servers that may be referred to as a central control units or master controllers. Not only can data be reported but they can also be stored so that, at the end of the month or year, sales can be compared to the previous month or year.

In a typical retail situation, an EPOS would include a computer, monitor, cash drawer, credit-card processor, receipt printer, a touch screen, customer display, a place for customer signature, and a barcode scanner. Sometimes a customer signature is not required, especially if the sale amount is small as, for example, in a fast-food or quick-serve restaurant or, increasingly, in grocery and specialty shops. In the future, the need for a customer signature will likely be less frequent in more venues. This need for an actual signature is referred to in the business as sign-age. Customers prefer not having to sign because it is more convenient and it saves time at the transaction. Stores like it because it moves customers along more efficiently.

EPOS systems decrease the amount of time spent in sales transactions and, hence, increases customer satisfaction and efficiency of orders. Retailers save on labor costs in shelf stocking and accounting. Managers can see what is selling so it helps them allocate labor, service, and products. Thus, this affects scheduling as well as the ordering and stocking of products.

The earliest EPOS systems came from IBM in the 1970s and were used in department stores and restaurants. The first barcode scanners were introduced in 1974 by an Ohio supermarket. Later, many companies began producing EPOS systems, including Microsoft, Apple, NCR Corporation, and Epson. As more companies entered the market, there was more competition for features such as appearance, ease of use, initial cost and upkeep, functionality, speed, consistency, and reliability. The initial cost to a store is substantial, and any decisions to change systems are also costly. At the National Retail Federation annual meeting held in New York City, many companies exhibit the newest systems and try to persuade stores to buy their system or components of it. Over time, standards have been set that have made updating systems less difficult, and different brands of POS terminals and computers can be substituted for each other.

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