QFT #4 - Part 3: Point of Sale systems: Too Sophisticated for your LCS?

If you care to investigate, and I really don’t, so the following claim is purely conjecture on my part, I’m sure you’ll find POS systems customized for almost every retail sector, meaning there is probably a specialized food service (restaurant) POS system which differs from the system used by a clothing store which differs still from the system found in a consumer electronics store. Further, if you have the money to burn as a business, and most national chains do, you can develop a branded POS system. In other words, the POS system used at Circuit City probably has the easy button all over the GUI, while Best Buy – Best Buy!! (those of you who listen to the Kevin & Bean Show on KROQ 106.7 FM will get the joke) – will have a blue and yellow system.

Following this philosophy, Diamond has developed a POS system customized for the comic book sector. Its goals are to make available a system that is affordable to retailers and to integrate many different functions, in order to make a retailer’s job more efficient.

The first integrated function is downloading pre-written item records for any item you order. The UPC, the description, the price, and the rest of the data would automatically load into the POS system. Other than the quantity and any modifications the retailer wants to make, there would be no need for any manual data entry using Diamond’s software.

The other feature, which is, on the surface at least, promising, is direct communication between the POS software and Diamond’s ordering system. I’m assuming the intent is to have the retailer input his or her order into the POS software which in turn will upload the order to Diamond. I suppose the software might even be smart enough to recommend quantities for specific titles based on the sales history. In addition, perhaps a retailer may also be able to instruct the software to automatically reorder items when a pre-selected quantity is reached.

Now, I admit, those features sound beneficial. The ability to download pre-written item records would certainly save time, and being able to avoid Diamond’s archaic, and downright lame, online ordering interface would make many a retailer cheer. But being the cynical man that I am, I suspect Diamond’s ultimate goal is to strengthen its grip on the direct market’s short hairs by making retailers reliant on the company’s software, thus further solidifying its monopoly.

Plus, I believe Diamond is using a Microsoft product as the platform for its POS system, and like many geeks my age, I have an irrational dislike of Microsoft. Combine that with my rational dislike of Diamond, and this unholy alliance doesn’t give me many warm and fuzzies.

Now we come to the million, or whatever figure Diamond stands to make from this, dollar question. Will retailers buy it? I’m not sure I have a good, quantitative answer other than to say I don’t think the software will be as well received as Diamond is anticipating. There are several reasons behind my prediction.

First, I don’t think Diamond realizes how many comic book retailers would choose, given the chance, to not do business with the distributor at all. There is a great deal of frustration in the direct market due to a variety of factors, many of which I’m sure I’ll eventually discuss in this blog, so I’m really not sure how many retailers will want to jump into yet another bed with Diamond.

In my case, had Diamond’s POS software been available when my store was open, I highly doubt we would have used it. I’m sure we would have evaluated it against the other software packages, but ultimately would have gone in the direction we did.

The second reason the new software won’t be catch on is comic book retailers are notoriously cheap. Therefore, the success of Diamond’s POS software will largely depend on how much it costs. My guess is success will require a sub-$500 price tag, which would include the necessary hardware such as the cash drawer, UPC scanner, credit card reader, and receipt printer, and I’m not sure Diamond can accomplish that. On top of that, I’m assuming the retailer will need a computer running Windows.

For example, I think we spent $1500 on the hardware and software. And to keep the numbers nice and round, I’ll say we spent $500 on a basic computer to run everything. Now, as a start-up store, it was relatively easy to justify spending that money. In fact, we never considered NOT using a POS system. Heck, back when I was only a customer, I could never comprehend why so many stores just used a crappy cash register or a shoebox. It legitimately baffled me.

However, for established stores, I guess I can see the hesitation to spend that money. In many cases, $2000 equals the weekly payment to Diamond. Other than the independently wealthy store owners, I’m sure most retailers would have chest pains cutting that check, especially when most already only survive week to week. So like I said, Diamond really has to think about the price tag.

The final reason I’ll discuss is related to the inherent cheapness. It’s the “change is bad” mentality that permeates the retail side of the industry. Let’s face it, there’s not a whole lot of innovation these days in comic books stores – a topic I’m sure I’ll be discussing in future blogs. We tried some cool ideas in my store, many of which were successful. But for most retailers, if something has been working ok for the last decade, there’s no need to change it. And that most definitely includes the use of POS systems. After all, my seven year old, ticker tape cash register works just fine, dammit! I don’t need one of them fancy pants, new fangled systems. It’s Y2K all over again, I tells ya!!

Yet with all that said, I will reserve further judgment of Diamond’s software until it has had a chance to be implemented. Personally, I feel that POS systems are well worth the up-front investment, if, for no other reason that it actually makes the store look like a professional business. I applaud Diamond for its forward thinking, even though it’s still a few years behind the rest of the world. However, there are just too many long established paradigms and closed minds in the direct market for Point of Sale systems to ever get a foothold.