From the mechanical cash registers of the 1800s to today’s advanced, software-driven systems, the development of the point of sale or POS system is a testament to humanity’s relentless pursuit of business efficiency. As we approach the future of POS systems, it is crucial to have a quick revisit of the history of POS and how the technology evolved over the years. Not only will history explain the many enhancements POS have gone through, it could also give us a newfound understanding of the reasons and ways they evolved as they did.
Building on this perspective, it is necessary to begin at the very beginning–a time when the concept of automated transactions (in contrast to manual record keeping) was just taking shape.
The early days: Mechanical cash registers
Although considered rudimentary in the present day, the cash register ended up as not just a mere tool for transactions, but a representation of a new age in commerce, where efficiency and security began to take center stage in business operations. The first working mechanical cash register was the “Incorruptible Cashier” invented by James Ritty and John Birch. As an inventor slash saloon owner, Ritty first got the idea in 1878 while traveling to Europe on a steamboat. He learned about a device that counted how many times a ship’s propeller goes around, and thought that he could perhaps create a similar mechanism for recording cash transactions and therefore preventing theft in his many saloons.
However, Ritty eventually sold his invention to Jacob H. Eckert, who in turn sold it to John H. Patterson. Patterson then renamed the company the National Cash Register, commonly known as NCR. He enhanced Ritty’s invention by adding a paper roll to sales transactions, which later paved the way for internal bookkeeping and external receipt generation and further improved its ability to protect against fraud. While working at the NCR, Charles F. Kettering took the cash register a step further by designing one with an electric motor in 1906.
From being purely mechanical, the cash register then shifted to becoming electronic, marking a significant leap forward in the eventual development of POS systems.
The advent of the modern POS system
Although it was an early form of a computer-based POS system, IBM introduced the electronic cash register (ECR) in 1973: the IBM 3650 and 3660 store systems. They were mainframe computers that can control as many as 128 IBM point of sale registers. A year later, the ECR was used in stores with multiple branches such as the Pathmark Stores in New Jersey and Dillard’s Department Stores. Later on, William Brobeck & Associates created the first microprocessor-based POS system for McDonald’s, making it the first restaurant chain to utilize POS systems. This, in turn, set a precedent in restaurant management by making restaurant transactions faster than ever.
These systems, at the time, were revolutionary, as they were the first to bring the concept of a networked POS system to life. They set the foundation for the modern POS system. In 1986, Gene Mosher kept the ball rolling by introducing the first-ever graphical POS software that featured a touchscreen display, which made the checkout process more efficient for cashiers. Further advancements include mobile card readers and shared terminals that would communicate internally with accounting systems.
The rise of software-based POS solutions
POS technology grew more advanced after the 1990s. By then, POS software was available on other platforms such as Windows and Unix, and feature enhancements such as larger touchscreen displays became more common. The POS was becoming increasingly complex as a piece of technology as the demand for features grew further. It was no longer about just sales and inventory, but also about counting stocks, ordering from vendors, and even nurturing customer loyalty. In fact, POS with bookkeeping and accounting capabilities were already available at the time.
From the ECR, we eventually reached the era of the electronic point of sale or EPOS. It was made possible by cloud computing, or “the use of hosted services, such as data storage, servers, databases, networking, and software over the internet.” This meant that EPOS systems can then be accessed directly with just an internet connection from any internet browser. This made advanced features such as real-time reports, readily accessible inventory management, staff timesheets, and customer loyalty programs possible.
Software-based POS solutions, especially those enhanced by cloud computing, have brought substantial benefits to retail businesses. With these systems, retailers were able to enjoy streamlined operations through real-time reports, making it easier to make informed business decisions swiftly. Staff timesheets became more manageable, improving workforce efficiency. Additionally, customer loyalty programs, facilitated by these advanced POS systems, helped in retaining customers and understanding their buying patterns better. This well-integrated approach to business management not only boosted operational efficiency, but also enhanced customer satisfaction.
Mobile POS terminals
Cloud-based POS systems paved the way for a new possibility that made POS technology more accessible and convenient than ever: mobile POS or mPOS systems. Cloud-based POS can be accessed from any device with an online connection and browser–and as mobile devices grew smarter, they eventually passed this criteria. Not only are they extremely mobile, allowing retailers to take their mPOS anywhere they want to sell their products; they are also extremely cost-effective and easy to set up, requiring only a mobile device such as a smartphone or tablet, and an online connection. Most POS systems in present day offer contactless payment options, which do not even require the customers to touch the POS terminals to make a transaction.
The evolution of POS systems from the simple cash register to today’s sophisticated cloud-based and mPOS systems shows how quickly technology has advanced as of late. From bulky, mechanical registers, we now have sleek, digital systems that can even be integrated into mobile platforms that can utilize cloud computing for our efficiency and convenience. At this point, it’s safe to say that such developments in POS technology has not only revolutionized retail operations, but also redefined the shopping experience.
But the question still remains: what’s next for POS systems?
The future of POS systems
There are a series of ongoing trends in the retail industry that are poised to shape the retail landscape of the future. Although it is still unclear which trends will continue to thrive, one thing remains constant: the future promises even greater advancements for POS systems as technology continues to advance.
Emerging technologies like artificial intelligence and machine learning are set to further personalize the shopping experience, making it more efficient, secure, and tailored to individual preferences. We can expect POS systems to become not just tools for payments and transactions, but integral parts of a comprehensive retail strategy, offering insights that drive business decisions and foster customer loyalty. The relentless pursuit of innovation in POS technology will continue to guide and shape the way we do business, kickstarting an era where commerce, technology, and consumer experience reaches new heights.
In fact, the POS has almost become a necessity for retail stores at this point. If you’re a business owner who’s still deciding whether or not to invest in one, here’s another article from our blog talking about why a POS can be a worthwhile investment for your business.
