Magazines Archives - 2009 April

Hewlett-Packard Affordable, dedicated, branded
Story 2 - Cover Story

It is an offer that retailers may not be able to refuse. For the price of an average personal computer (PC), they can now purchase a dedicated point-of-sale (POS) computer system that comes with touch-screen functionalities — for greater efficiency and faster checkouts — and the complete range of accessories that include a cash drawer, barcode scanner, magnetic stripe reader, printer and customer display pole bar.

What is more, the POS system comes standard with "retail-hardened" construction, including an all-steel, dust-protected chassis, to withstand the most demanding, round-the-clock work environments. All this at a starting price of US$1,499 with full accessories or just US$438 for the system alone, which is representative of one of the more affordable, dedicated POS systems currently available.

Probably the best part of this offer is that it comes from one of the world’s largest technology companies — Hewlett-Packard (HP). It means buying the reliability and service that the brand is noted for. The company has even further sweetened its offer by throwing in a three-year warranty versus the industry standard of one year.

"We leveraged our economies of scale to make our POS systems affordable and attractively priced," says Dennis Mark, vice-president and general manager, commercial systems group.

HP is a relative newcomer in the market for POS systems. Although the company started selling them in the US in the early 2000s, HP embarked on a worldwide launch only in July last year. Two models — the rp3000 and the rp5700 — are being offered as complete systems with full accessories plus a choice of software that includes the popular Microsoft Dynamics Retail Management System. However, the machines are built on open systems so that users can, if they so choose, use other accessories and software.

HP is so confident of its value proposition that it is targeting its POS systems at the entire spectrum of retailers, from the big boys running worldwide and nationwide retail chains down to the very small shops that might be currently using no more than a cash register.

POS users form mainly two groups: The bigger companies use dedicated POS systems while smaller companies use a PC that doubles up as a POS unit. HP’s strongest selling point is that it combines the qualities of both types of systems.

Dedicated POS systems are usually retail-hardened and well integrated with accessories such as barcode scanners, magnetic stripe readers and printers. PCs are cheaper and easier to set up. They are also more easily integrated with other PCs that perform back-office functions.

HP’s POS systems feature all these qualities and more. In fact, they can even double up as regular PCs — something most dedicated POS systems cannot do — to perform tasks such as accounting, word processing and Internet surfing. While big and busy retail chains obviously do not want their cashiers surfing the Internet, small business owners will certainly appreciate this flexibility.

For the big retail chains, whose bane is the frequent technological updates that prevent them from standardising their POS systems, HP guarantees a minimum product life-cycle of at least three years.

Says Mark: “We appreciate that the big retailers would like to standardise their equipment. But they obviously don’t open all their outlets at one go. So we give them the assurance that they will be able to buy exactly the same system as they expand over the next few years.”

With the trend of big retailers moving towards round-the-clock operations, HP is making sure that its POS systems can stand up to the task. Efforts include using the Intel Atom microprocessor for low energy consumption as well as low heat. The HP rp3000 is the first in the industry to use the Intel Atom in a POS system.

For small and medium-sized enterprises (SMEs), a major attraction will be the fact that they no longer have to make do with a PC performing tasks that it is not designed for. They could enjoy substantial savings, too, from buying the entire POS system as a single package instead of buying the PC and accessories separately.

"The real savings will come from indirect and hidden costs," Mark points out. "The cost of acquiring a POS system is only about 25% of the total cost, which includes maintenance, repair and downtime. There is also the potential loss of business to consider. When shoppers get tired of waiting because a POS system is not functioning properly, they might just put down their intended purchases and walk away. I have personally seen this happen!"

HP’s retail-hardened construction also comes in where SMEs do not operate in clean, cool, air-conditioned environments. Housed in an all-steel chassis in place of the usual plastic, HP’s POS system is designed to work within a temperature range of -10°C to 40°C. Weather-proof seals protect the insides against dust, dirt and grease.

The company sees SMEs as having the greatest growth potential. At the same time, it is not ignoring the bottom end of the market comprising smaller retailers currently using only the cash register.

Automatic data capture

As a typical cash register costs only a few hundred dollars, it might seem that companies content with such a machine have no need for a sophisticated system. Mark disagrees: "I have observed retailers having a cash register on one side of the counter and a computer on the other, with the sales staff busily trying to input customer information, [which] is important. But, a lot of customer data can be captured automatically with a dedicated POS system.

“And when you know your customers’ tastes and preferences, you can make recommendations or draw their attention to things that they might like. At most, the sales staff might input additional comments such as whether the customer is fussy or friendly. Otherwise, they should just focus on sales.”

Ultimately, the biggest draw of the HP product is that it is more than a POS system. It is a complete retail management system (RMS) that gives retail managers and business owners quick and easy access to a wide range of retail data — fast-selling items, inventory levels and customer behaviour among others. Hence, HP is positioning its POS systems as an ideal, almost necessary, investment for the present economic downturn.

“In an economic downturn, the two most urgent tasks for retailers are to reduce costs and to win over more customers,” Mark notes. “An RMS can play a major role in reducing costs through better inventory management — you hold more stocks of the fast-selling items and less of the rest. Our POS systems will also help reduce costs through reduced energy consumption, lower maintenance and greater productivity.

“The bottom line is that customers get a more enjoyable shopping experience with a shorter waiting time at checkout counters. Most of all, you virtually eliminate glitches that keep customers waiting.

“At a recent IT Show in Singapore, there was a major glitch on the last day where no transaction could be carried out for one whole hour. When the economy is down, you cannot have major glitches like that; you cannot afford to make customers walk away and never come back. You need to do everything you can to make your customers happy.”

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