Cloud POS Adoption Skyrockets in Retail Equipped With AI-Based Capabilities
Until recently, the go-to solution for most brick and mortar retail stores to save their point-of-sale (POS) data, including product price lists and transaction records, was local platforms. These include a range of solutions, from on-premises PCs or servers to larger service provider network servers. However, many retailers have been making a shift towards online platforms for their business operations, with cloud POS emerging as a frontrunner in the transition.
In the current turbulent times caused by the ongoing onslaught of the COVID-19 pandemic, mobile POS transactions have gained significant traction. Retailers are investing heavily in the development of cashless and contactless transactions and have begun to adopt advanced POS solutions in order to boost their bottom-lines over the long term.
Once considered tools required merely for sales record maintenance, POS platforms, particularly cloud-based POS, have evolved into robust platforms over the years that can integrate myriad retail operations, including inventory, accounting, marketing and data analytics. This evolution has positioned these systems as an indispensable retail tool in recent years, with a report from Global Market Insights, Inc. suggesting that the cloud POS market size is poised to cross $9 billion by 2026.
Cloud Computing Set to Transform Retail Operations
A major reason for the intense impact of cloud POS on the modern retail domain is the growing awareness among companies and organizations regarding the merits of integrating cloud technology into their operations. Cloud computing has triggered a massive transformation in the retail sector. This transformation has manifested in several ways, ranging from more efficiency in inventory management to improvement in user experience, data security, to disaster management and better profitability.
Given the massive influx of data that businesses get on a daily basis in current times, for instance, data security is of key importance to retailers. An Insight study suggests that nearly 19% of buyers revealed they will cease shopping at outlets that have fallen prey to a cyberattack, making security of data and operations a major consideration for the organizations.
Cloud technology is considered a suitable solution to this issue, as it can strengthen network and endpoint defenses, enhances efficiency, and reduce costs usually associated with hardware installation. One of the most common ways retailers are using to integrate cloud tech into their operations is through the adoption of cloud-based POS systems.
According Retail Consulting Partners, almost 52% of corporate companies had transitioned fully to using cloud POS solutions, with over 40% planning to undertake the migration. In fact, the cloud-based POS adoption rate is anticipated to reach 50% in all restaurant categories by the beginning of 2022.
Cloud POS industry players are responding in earnest to this transition. To illustrate, retail mobile POS systems such as Square have been developed to support businesses in the conversion of smartphones and iPads into POS systems using Square stands and readers. Square Register, its first fully integrated system is designed for real-time tracking of sales, inventory management, customer directory building and to facilitate intuitive customer payments.
Similarly, in January 2021, Mastercard initiated a collaboration with Global Payments Inc. and NMI for the launch of Cloud Tap on Phone, part of its new range of cloud-based POS acceptance products, hosted on the Microsoft Azure cloud platform. With these solutions, businesses irrespective of size, can deliver cutting-edge contactless consumer retail experience using smartphones.
The Cloud Tap range is designed to democratize POS technology, by converting Android-based tablets or smartphones into acceptance devices, enabling companies to accept contactless payments and mitigate the need for investment in hardware-based POS terminals.
Computer Vision and Rising Popularity of AI-Enabled Cloud POS
In the past few years, the development of advanced technologies like AI, IoT, cloud computing and big data, among others, have significantly impacted the retail landscape.
In particular, AI has brought about tremendous changes in the retail domain—from the use of machine learning for better inventory management to the application of computer vision. For more personalized real-time promotions, modern retail organizations can harness the benefits of AI to connect more deeply with their consumers and ensure more efficiency in their operations.
AI has especially asserted a notable influence on the cloud POS industry, enabling systems to instantaneously handle all types of tasks, ranging from mobile app payments, to social app payments, to online payments as well as conventional in-store payments. According to reports, the future of cloud POS technology hinges considerably on the development of AI.
As the technology begins to gain prominence, ConnectPOS in 2021 revealed that over 15% of businesses in the U.S. have adopted AI-enabled POS systems, while nearly 40% planned to integrate them over the upcoming year.
Among the myriad AI-based technologies, computer vision has demonstrated strong potential in retail applications, most notably through AI-based facial recognition. POS systems with AI face recognition capabilities can identify anything from new and old customers to known shoplifters and emotions.
For instance, in the pandemic era, one of the main concerns of shoppers is the transmission of germs via POS systems. Computer vision helps tackle this issue, by making it possible to accurately envision or “see” products in a customer’s cart.
In keeping with the rising trend of AI integration in retail POS solutions, CaliBurger, a chain of burger restaurants in California installed POS kiosks equipped with facial recognition capabilities. These kiosks allowed for scanning and analysis of customer faces in the store, after which they would display details like loyalty programs, as well as favorites and past purchases.
Next-Gen Cloud POS Solutions in Emerging Economies
Leading cloud POS industry players are also shifting their focus towards the launch of innovative products designed to meet the demand for advanced POS solutions in developing countries. To illustrate, in February 2019, India’s omnichannel retail-tech firm Perpule introduced its advanced POS billing solution, dubbed UltraPOS, designed as a form factor independent and platform-independent cloud POS billing system.
It was equipped with anytime, anywhere billing functionality, eliminating the need for bulky computers or servers in the store. The solution, which has been adopted by India’s Big Bazaar, Foodhall other prominent retail brands, was claimed to help offline stores in decreasing billing counter size by almost 40% and enhance revenue and sales via a data/AI-driven approach to cross-selling, upselling and dynamic offers.