If you’re a caffeine addict, you may have recently experienced a moment of panic if you tried purchasing your daily dose of java from one of the world’s largest, most recognizable coffee house brands — only to discover they couldn’t accept your money. Sound like your worst nightmare? Well, it was theirs, too, as a widespread POS system failure resulted in millions of dollars of lost sales — in a single day.
Rule #1 for retail success: always be able to accept the customer’s money. However, it’s not always as simple as it sounds.
The overriding priority in retail operations is always having the ability to serve the customer, regardless of the in-store situation — and that of course includes the ability to accept the payments. Like so many best practices, though, something that sounds simple in theory can be more complicated than expected.
Advertisement
Today’s POS transactional systems depend on a complex, heavily networked infrastructure. Card readers, back office servers, and peripherals all need to work together to complete a single transaction. A loss of connectivity, a power outage, or a software glitch can keep retailers from taking payments from customers eager to make a purchase, which is nothing short of a disaster.
How can retailers who depend on these complex systems make sure they’re always able to accept customer payments without having to regress to a cash-on-the-barrel policy? First, let’s look at the two primary commerce architectures most retailers rely on today.
1. The Centralized Approach: For some retailers, the preferred approach is to centralize. They create a single platform that they manage, maintain, and modify from a central home office location and distribute to each store. This approach takes its cues from the e-Commerce model. It replicates the relatively straightforward, completely centralized, browser-based, and network-dependent approach used on a website and distributes it to every store via the network. Under this model, if the central servers or network connection go down, multiple stores can lose the ability to process transactions. To avoid this scenario, retailers will need to invest heavily in their networks to ensure they have the redundancy, backups and bandwidth they need to keep their stores running.
2. The Decentralized Approach: For other retailers, the solution is to decentralize. They replicate everything needed to transact business in every retail location. Each store has a fully featured POS, database and store server it can rely on in the event of a lost connection or outage at headquarters. This approach is significantly more costly and comes with a heavier technical footprint at each store, but individual stores can function independently when a central location is offline or unavailable.
Every technology decision of this scope is also a business decision. It directly reflects the retailer’s strategy and priorities and highlights the degree of risk the retailer is willing to undertake and how it chooses to mitigate that risk. But the centralized/decentralized decision isn’t simply an either/or choice for retailers. After all, retail is a decentralized business that requires a high degree of centralized policies and processes.
Retailers should look for lean, lightweight architecture that allows them to deploy centrally and locally, depending on their needs.
Built-in replication allows data required to run locally to be transmitted to the central location as needed for analysis, standardization, and process control. If network or power outages interrupt communications between a store and the home office, the store can still process transactions and replicate all sales to the home office when power returns. Associates in the store may not be able to access centrally maintained inventory, customer, or product data during an outage or service interruption, but they can hold fast to the first rule of retail: accept the customer’s payment.
Whether a retailer leans toward a centralized or decentralized architecture, the bottom line is that a store never wants to turn away customers because it can’t process transactions. A well thought-out retail IT architecture can be the key.
Jerry Rightmer is Executive Vice President and Chief Product and Strategy Officer for Starmount, where he oversees Starmount’s product vision and technology strategy. He has more than 20 years of experience in envisioning, designing and developing retail technology solutions.
