POS system evolution - from a cash register to cloud-based POS systems - Extenda Retail

The term “point-of-sale” (POS) was initially used to describe the basic cash register of the 1970s. Much has changed since then. Today's POS systems are integrated, cloud-based, all-in-one platforms that are complete business hubs. This blog post will discuss the history and evolution of POS systems and introduce Hii Retail, Extenda Retail's cloud-native POS solution.

Evolution of the POS system - through the decades

The history of the POS system reflects the relentless march of innovation in retail technology. What began in the 1800s with the invention of the cash register, designed to simplify transaction tracking and prevent employee theft, has evolved into the sophisticated, cloud-based POS systems we know today. These modern systems handle payments and provide advanced capabilities such as inventory management and in-depth customer data analysis.

The shift from on-premises to cloud-based POS systems

By the 1970s, the advent of computerized point-of-sale systems marked a turning point in retail technology. Early POS terminals revolutionized checkout, offering greater efficiency than manual registers. However, these systems were largely on-premises, relying heavily on in-store hardware and having limited connectivity. While they provided tools for managing inventory and tracking sales, they lacked the flexibility and scalability required for the rapidly changing demands of modern retail.

Fast-forward to the digital age, and the emergence of cloud-based POS systems has redefined retail operations. Unlike their traditional counterparts, these systems store all sale system data on remote servers, allowing retailers to access and manage their businesses from any internet-connected device. This shift has brought significant advantages:

- Real-time inventory management: Cloud-based systems provide instant updates on stock levels, enabling retailers to optimize operations and prevent overstock or shortages

- Streamlined customer data handling: Modern POS systems integrate seamlessly with CRM tools, offering insights into customer behavior and preferences to enhance personalization.

- Cost-effectiveness: With minimal reliance on in-store hardware, cloud solutions reduce the upfront and maintenance costs associated with traditional POS systems.

- Remote access and management: Retailers can monitor sales, update prices, and track employee performance from anywhere, enabling better control over multi-location operations.

A modern POS system for an omnichannel world

Today's point-of-sale systems have evolved from the traditional cash register into omnichannel platforms that unify in-store and online operations. They empower retailers to meet customer expectations for seamless experiences across channels. For instance, a modern POS system allows customers to purchase online and return in-store, all while maintaining consistent pricing, inventory, and loyalty benefits.

The evolution of POS systems has also extended beyond retail to sectors like hospitality, healthcare, and services. Mobile and tablet POS terminals now enable businesses to take transactions directly to the customer, whether at a restaurant table, trade show booth, or pop-up shop.

1970s: electronic cash registers (ECRs)

The first electronic cash register was introduced in the early 1970s, marking a huge development from previous mechanical models. These systems featured digital displays and basic programmable functions, allowing more speed and accuracy than their mechanical counterparts.

For businesses, these advancements meant:

• Faster transactions: The automation of calculations sped up the checkout process.

• Improved accuracy: ECRs minimized errors in pricing, tax computation, and totals

• Record-keeping: They allowed businesses to store and retrieve basic transaction details more efficiently.

ECRs had limited integration and storage capabilities, indicating an inevitable evolution. Around the introduction of the ECR, the term point-of-sale (POS)started being used to describe the new generation of sophisticated checkout solutions.

1980s: computerized POS systems

The 1980s introduced computerized technology, such as microprocessors, into POS systems. As a result, solutions became more sophisticated and efficient. Computerized systems were costly, terminals bulky, and registers stand-alone, requiring manual consolidation, but they were still a big step forward. 

This was the decade when credit cards became commonplace. POS technology had to accommodate modern payment methods, accelerating technological development. Computerized POS systems also introduced the first device integrations.

1990s: expanded POS functionality

As digital evolution progressed throughout the 1990s, POS systems adopted modern and advanced features like credit card reading, barcode scanners, and touchscreen interfaces. The term ePOS (electronic point of sale system) was coined, and the systems started running on Windows and other leading operating systems. 

It was a big step forward regarding efficiency and customer experience and a clear sign of what would come in the 2000s. 

2000s: the emergence of cloud-based POS systems

The modern POS systems of the new millennium introduced cloud-based technology, allowing retailers and customers to benefit from the efficiency and safety of cloud computing. On-premise solutions started facing fierce competition from cloud-based systems that allowed businesses to consolidate their information and access it from anywhere.

Cloud-based POS systems made any device a potential point-of-sale processor, opening up many new possibilities. Simultaneously, introducing SaaS (Software as a System) cloud technology improved POS security, as businesses no longer had to manually update software and licenses. 

2010s: rise of the integrated all-in-one POS system

The next step in POS evolution was introducing the all-in-one POS system. “All-in-one” refers to a solution integrating various functionalities into a single platform or device. This generation of systems greatly improved efficiency and convenience, reducing the need for integrations. All-in-one POSs allowed many companies to greatly simplify their setup, taking the business to the next level.

Cloud-native POS systems emerged, providing even more possibilities, such as flexibility, scalability, inventory management, real-time deployments, and integrations. By the middle of the 2010s, fully cloud-native solutions, designed from the ground up to operate in a cloud environment, were available on the market. By leveraging the power of the cloud, businesses were able to streamline operations, enhance customer experiences, and remain competitive in an increasingly digital world.

Flexibility and accessibility

Manage operations from anywhere with internet access, enabling real-time updates, sales tracking, and inventory management across locations. This flexibility is particularly valuable for businesses with multiple locations or operating remotely, such as pop-up stores or mobile vendors.

Scalability

Cloud-native POS systems are designed to grow alongside your business. Adding new stores, products, or services is seamless, as the system eliminates the need for costly hardware upgrades or manual data migrations. Whether you’re scaling from one location to a nationwide chain, cloud-based systems provide the infrastructure needed to support growth without disruptions.

Improved inventory management

Advanced inventory management capabilities are a hallmark of modern cloud-based POS systems. They offer real-time tracking of stock levels across multiple locations, automatic reorder notifications and detailed reporting. These features reduce the likelihood of stockouts or overstocking, improving operational efficiency and ensuring customers find what they want.

Real-time reporting

Access instant insights on sales, customer behavior, and operations, empowering better decision-making. From daily sales and employee productivity to customer behavior and inventory levels, decision-makers have instant access to the data they need. This empowers businesses to make informed decisions quickly, optimize operations, and respond to market trends.

Seamless integrations

Connect effortlessly with tools like CRM software, accounting platforms, and eCommerce solutions for synchronized operations. These integrations ensure that all aspects of your business are synchronized, improving efficiency and enhancing the customer experience.

Cost-effectiveness

Lower IT costs, predictable subscription pricing, and reduced operational errors make cloud-based systems affordable. Additionally, they operate on a subscription-based pricing model, which helps businesses manage expenses more predictably. The cost savings are further amplified by the system’s ability to reduce errors, prevent downtime, and streamline operations.

Enhanced security

Cloud systems protect sensitive customer and business data with encryption, regular updates, and automatic backups. Many solutions also comply with industry standards, giving businesses peace of mind regarding regulatory requirements.

Faster updates

Cloud-based POS systems allow for real-time deployments and updates, ensuring businesses can always access the latest features and improvements without manual intervention. This minimizes downtime and ensures the system remains aligned with evolving market demands and security protocols.

2020's: seamless omnichannel and AI technology

Today's customers have higher expectations than ever. Retail companies must deliver seamless experiences across touchpoints and devices, fully connecting in-store, self-checkout, and online shopping.

The POS systems of the 2020s are focused on omnichannel experiences and getting the most out of emerging AI and machine-learning technology. This is the era of smart, integrated systems that are complex in functionality but offer a simplified UX.

Looking ahead: What’s next for POS systems?

As technology evolves, POS systems become smarter and more adaptable. AI-powered analytics, advanced security protocols, and deeper integration with e-commerce platforms are shaping the future of the point-of-sale system. These innovations enhance inventory management, refine customer engagement strategies, and deliver greater operational efficiency.

The evolution of POS systems is not slowing down, as emerging technologies will lead to even more advanced, efficient, and integrated solutions:

• Cloud-native systems will continue to improve, offering more accessibility and efficiency 

• AI and machine-learning technology will develop further to provide a better and more personalized customer experience

• Mobile POS solutions will open up new opportunities to diversify sales and transactions

• Customization and integration possibilities will grow, making the systems even more powerful

From the humble cash register to today's robust omnichannel platforms, the evolution of the POS system underscores the importance of embracing innovation to meet ever-changing consumer expectations. Retailers who leverage these advancements will stay ahead in a competitive marketplace, delivering convenience and value to their customers while optimizing their operations.

The future is bright, and retailers must keep up with the latest innovations to stay ahead of the competition. It is good to be aware of the evolution of POS systems and future innovations. This knowledge will help you make choices and investments that benefit your business in the long run.

Introducing Hii Retail

Hii Retail is a comprehensive POS system built on the Google Cloud platform. It is an all-in-one cloud-native solution offering cutting-edge functionality and integrations. Since the system is a fully scalable one-stop shop, it is the last one you will ever have to implement. We continually use our retail expertise to improve the system, which updates without interruptions or costly IT projects.

Extenda Retail has been an industry leader in this POS evolution for over 40 years. We aim to remain a cutting-edge POS provider in the future, and we invite you to join us on the journey.