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by Justin Guinn,
Market Research Associate
Last Updated: August 27, 2015


Web-based point of sale (POS) software is the Software as a Service (SaaS) solution to a retailer’s needs, and it’s a rapidly growing market, especially as more and more businesses turn to the Web to support their sales and/or marketing strategies.

There are a number of advantages and disadvantages to selecting this deployment model, particularly in the retail software market, so we’ve written this buyer’s guide to help you understand the benefits, potential pitfalls and popular vendors associated cloud point of sale software.

Here’s what we’ll cover:

What Is Web-Based POS Software?
What Type of Buyer Are You?
Benefits and Potential Issues
Market Trends to Understand
The Web-Based Vendor Landscape

What Is Web-Based POS Software?

Traditionally POS systems have all been on-premise, designed to help retailers increase the speed and efficiency of their checkout process and to alleviate much of the administrative burden associated with retail management.

In recent years, however, a number of online solutions have cropped up to perform this same function. These come with many of the advantages typically associated with cloud-based software: lower up-front costs and technical/hardware burdens. Web-based POS software is designed to meet the needs of the retailer, but with minimal hardware installation as compared to a traditional POS.

What Type of Buyer Are You?

Before digging into software, you will want to know what type of buyer you are. For Web-based POS systems, there’s basically two types of buyer:

Simple systems. Smaller businesses typically want a straightforward POS for customer checkout and inventory management. Many of these systems also have built-in CRM and accounting capabilities to manage everything a small business would need.

Enterprise systems. Larger companies may be looking for a more robust solution that has extra levels of functionality beyond those typically associated with a POS. These may include pricing controls and/or variations, merchandise planning and warehouse or transportation management. Not every enterprise solution will have all of these features, so consider carefully which features you want  and use those criteria to narrow down your search.

Cellular retailers. Businesses that specialize in cell phone and similar telecommunications have a ton of extra features specific to that industry: phone activation, tracking service plans (including family plans with multiple customers on one system), commission and vendor rebate calculations, feature comparisons and so on. These companies will want one of the many systems dedicated to this market.

Like for the cellular industry, specialty retailers may wish to consider the benefits of getting a solution that’s dedicated specifically to their market. These will be best-of-breed solutions with specific functionality that your store needs but may not be available in a generic POS system.

Benefits and Potential Issues

Web-based software solutions are growing in popularity, and for good reason. They come with lower up-front costs and fewer of the maintenance challenges, and these days almost all of the same functionality, making them the perfect choice for smaller businesses in particular.

In the retail market, SaaS has other very significant benefits, namely those discussed under “Market Trends” below: built-in customer portals to transform your brick and mortar shop into an ecommerce store as well; integration with social media to expand your sales and marketing strategy and mobile applications to let the user take the store anywhere it needs to go.

There are two main drawbacks to online POS software. First, are the hardware limitations or add-ons. Most retailers aren’t operating with a standard computer setup, rather you’re using a scanner, a touch-screen and receipt and credit card machines, and all of these require special hardware that then has to integrate with the software. The more of this hardware you want to purchase, the more carefully you should consider whether an on-premise system will make more sense.

Second, Web-based software relies 100% on a strong Internet connection on the store’s end in order to function properly. If the Internet goes down, so does the ability to conduct business in your brick and mortar environment. So a Web-based system is not a great solution if your Internet is spotty or unreliable.

The Web-Based POS Vendor Landscape

This type of buyer … Should look at these systems
Simple systems MMS, SmartWerks, Real Time
Enterprise systems RICS, RunIt Realtime, NetSuite, Jesta Vision Suite, Cegid, Epicor, Microsoft Dynamics
Cellular retailers RetailIQ, Multiflex RMS, Wireless Standard, MMS Wireless

There are also specialty systems available for other specialty retail markets, such as Granbury for restaurants and SWIM for jewelry. Keep in mind that many of the POS and enterprise vendors listed above have multiple different products tailored to specific industries, so as you’re performing your search, be sure to ask what markets they specialize in.

Market Trends to Understand

As you evaluate retail systems, keep these trends in mind. How your vendor fits within these trends could have a big impact on their viability.

Mobile. Since many retailers conduct sales at tradeshows and other remote locations, remote checkout applications that let users access sales/inventory data from the tradeshow floor are growing in popularity. This trend has exploded with the development of the iPad and other tablet devices, although there always have been and will be numerous deployment models for this.

Online sales. The tight margins of traditional “brick and mortar” businesses are leading to more and more online sales channels, allowing retailers to develop a Web portal to sell their products online, which can ultimately be much more cost effective. These integrated ecommerce modules run the full range of functionality, integrating the shopping cart with the sales and inventory data. Web-based POS software is particularly well poised to take advantage of this trend.

Social media. As Facebook and Twitter impact the way consumers and businesses interact online, Groupon and LivingSocial are enabling retailers to leverage that and turn it into concrete sales. Connecting your solution to social media is an outstanding way to grow your brand and increase sales, and online systems are designed to support this function.

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