I've been working part time at a wine shop in Winchester for the past number of months. It's a small family run wine store, a traditional "mom and pop" type business. I've learned a lot about business working here, especially about customer relationships, negotiation and using leverage to obtain the prices you are looking for. Although the business has been around for 8 years, the store could have easily been opened up 20 years ago: technology is essentially non-existent throughout the store and the business. They did not track inventory, they crunched all their number with a pad and pen, and kept paper records of everything.
Being an avid technology user, I felt this was a great opportunity to transition the store to something a bit more modern and leverage the amazing new technology out there. There are a number of companies who are offering small businesses new Point of Sale (POS) systems that integrate inventory and basic analytics. The transition started by identifying all the different players and selecting the service provider that best fit our needs. We went with ShopKeep, since they were one of the few POS that offered bar code scanning (a necessity for our business since we have over 1000 items). We now have a sleek iPad based POS system, are tracking our sales and our inventory, and have received amazing feedback from our customers.
Upgrading these POS systems used to costs 10's of thousands of dollars, and we were able to accomplish virtually the same for a fraction of the cost. These new software as a service POS systems have enabled small businesses to take advantage of data analytic tools that were previously only available to large retailers. It is a true shift in what we can do to grow, and these companies have helped break down many of the barriers small businesses used to face.
Overall we have been very happy with the transition, it has helped us understand our business better and identify ways of increasing our revenue. Yet there are a number of areas that are still clunky, the analytical tools aren't quite there yet, and this system does very little to adress costs!
My biggest gripe is with credit card payments. As I researched how this technology would be used, I started to uncover the ridiculous and archaic payments system. Credit card processing have fees at nearly every step and it's not a simple process. I find it ridiculous that it is that difficult and complex to simply get paid. Fortunately a number of companies have been trying to address this issue, most importantly Dwolla and Square.
During my research, Square was my number one choice for our new POS system, the only issue was they did not have a barcode scanner. They have just recently announced the Square Stand (along with barcode scanner integration), an elegant, all in one package that would further streamline our hardware while allowing us to take advantage of the some of the great software they offer. This is a game changer, and I'm going to push to make the transition happen.
Square was started by Jack Dorsey (Twitter co-founder) and is looking to empower small business by providing great analytics while simplifying the payment process. The goal of Square is to make the transaction more efficient, cheaper for the seller, and more convenient for the buyer. One way they are simplifying this process is by charging retailers a flat rate of 2.75% for all credit card processing. Although this may not be cheaper (I still have to run the data through to see how much it would cost us compared to what we are currently using) it does make it significantly simpler for us to understand where our money is going.
What gives me confidence to adopt his system is Dorsey's driving purpose: “We’re in the business of breaking down the barriers and making things more convenient.”
Square has already taken tremendous steps in that direction, and knowing that Dorsey is at the helm is reassuring. The company will continue to simplify every step of the transaction for both the buyer and the seller, while empowering business owners to take advantage of the all the data they have on hand. While ShopKeep has been doing a good job, I think Square has the expertise to grow much faster and become a more widely adopted system.
Technology has been a powerful driver of disruption, and it's great to see it being applied to the small retail industry. I hope that a widespread adoption of these tools will eventually seep through to the banking industry and disrupt the current payments structure. Looking forward to the change.