POS systems have slowly yet steadily become an essential part of businesses that have direct transactions with customers. Bulky cash registers have been replaced with sleek and versatile POS systems. A point of sale (POS) system conducts fast and efficient transactions by identifying products, billing customers, accepting payments and printing receipts. However, depending upon the POS software used, the POS system can also be used for inventory management, customer relationship management, employee management, marketing and advanced reporting.
As the popularity of POS systems rises, there is more competition amongst POS software providers and greater choices for businesses. When it comes to POS software, most common are cloud-based and on-premise POS software. A hybrid POS system is relatively new, but it has gained prominence in a short span of time due to its advantages, versatility and flexibility. Choosing the right POS software and type of POS system is vital if you want to benefit from the full potential of POS systems.
Here is a complete guide on hybrid POS systems so you can decide if they are the right choice for your business.
Types of POS Systems
To choose the best POS system for your business, it helps to identify and understand the main types of POS systems available. Every POS system has two main aspects, the hardware components and the software. The type of POS system depends upon the configuration of the POS hardware components, and the nature of POS software used. The POS software you use is the most important part of the overall POS system as it influences the features and capabilities you can access.
POS hardware components include POS terminal, barcode scanners, cash drawers, payment processors, receipt printers and options extra monitors. Based on the POS hardware components, there are two types of POS setups: stationary setups and mobile POS setups. A stationary or traditional POS setup includes all the POS hardware components connected together at a fixed checkout point. Mobile POS setups or mPOS consist of a wireless POS terminal and can include any other desired component while still being portable and movable.
The main types of POS systems based on POS software used are cloud-based, on-premise and hybrid POS systems.
1. Cloud-Based POS Systems
A cloud-based POS system is where the POS software is availed as a SaaS, and the entire POS system, data and information are hosted remotely on a cloud server. The cloud-based POS software can be accessed through the internet only and as a result, it cannot be used without an internet connection. It is an immensely popular type of POS software used by businesses across industries due to its wide range of benefits. It has more features than on-premise POS systems and can be accessed remotely.
The cost of a cloud-based POS system is less than other POS software, and typically involves subscription-based payments either monthly or annually. There are no special requirements for installation and cloud-based POS software can be used by any POS terminal with an adequate operating system and active internet connection. Installation is straightforward and simple and updates are automated, taking place regularly without any additional costs.
As the server is remotely located, any and all POS data can be located from any location, whenever required. Additional features and integrations can be incorporated whenever required, and you can also upgrade your subscription plan to support business growth when it’s needed. This streamlines management and makes it easier to access and use the POS data for business decisions. Backups automatically take place on a regular basis, storing data on the cloud, so there are minimal risks of data loss.
The top benefits of cloud-based POS systems are accessibility, flexibility, support of mobility and opportunity to grow and expand as need in a cost-effective manner. The single biggest drawback is that cloud-based POS systems are dependent on the internet and require a constant and stable internet connection. Problems with internet access can seriously disrupt POS activities.
2. On-Premise POS Systems
On-premise POS systems are also known as legacy or local or traditional POS software, and are an older format of POS software. In an on-premise POS system, all the data and software are stored on a local server with a closed internal network inaccessible by outside devices. They are reliable and secure, and do not require an internet connection to operate. Before cloud-based technology became popularised, on-premise POS software was commonly used by a wide range of businesses, offering greater benefits than earlier cash registers.
An on-premise POS system involves a relatively high initial installation cost and needs adequately robust hardware to store the local server. However, there are no recurring costs apart from maintenance fees and any updates you install. All updates and backup need to be taken manually and periodically to avoid problems and loss of data. If the system crashes, it can be expensive and time-consuming and would require re-installation charges. As all data is stored on a local server, it can only be accessed directly from the local network location. While this does restrict remote accessibility, it promotes greater safety.
Leading POS features are supported by on-premise POS systems, but all the desired features and tools need to be integrated at the time of the initial installation. If you want to add extra features later on, it can require technical support for the integration process. The risk of data loss with an on-premise POS system depends upon the frequency of backups. While it can be time consuming to manually backup data, it can be immensely helpful in case there is an emergency such as a software bug, system crash, or fire.
The top benefits of on-premise POS systems are that they can be used offline, are robust, and have excellent security. Drawbacks are that they can be expensive if you want to update features, and they have restricted accessibility.
3. Hybrid POS Systems
A hybrid POS system is a combination of an on-premise or legacy POS software and cloud-based POS software. While on-premise POS software is hosted on local servers and cloud-based POS software is hosted entirely online, a hybrid POS system utilises both. In areas where internet connectivity is poor or if there is a break in the internet connection, the POS system operates offline, similar to the functioning of on-premise POS software. When and where internet connections are available, all the offline data is uploaded to the cloud and the POS software follows a cloud-based model.
Despite having two types of POS software delivery systems, they integrate and function as one cohesive unit with a hybrid POS system. There is immense flexibility with hybrid POS systems and they can be customised to suit your business setup. With a hybrid setup, you can reap the top benefits of cloud-based and on-premise POS software while avoiding their drawbacks. Typically, hybrid POS software is available in a subscription format as Software as a Service (SaaS), similar to cloud-based POS software, and costs less than on-premise POS software.
If you have mobile and fixed POS setups, hybrid POS software is an excellent support, enabling you to take the POS system wherever the need arises without worrying about connectivity. With a hybrid and mobile POS system, you can venture out of your fixed business location and support sales stalls at conventions and local markets. Warehouses and outdoor locations can also be turned into POS points when needed.
Hybrid POS systems are the top choice for many restaurants, hospitality businesses, retailers, warehouse-based businesses, and any business that may have unstable internet connections.
Advantages of a Hybrid POS System
Hybrid POS systems are relatively new in the market, but they offer a wide range of advantages that have helped increase their popularity. They are especially prevalent amongst restaurants and food service businesses where a mobile POS terminal can be taken directly to customer tables where internet connectivity may be poor. Apart from restaurants, retailers have found great use of hybrid POS systems, as they offer flexibility to conduct transactions and access POS data in large stores.
Here are the top advantages of a hybrid POS system:
POS systems play a vital role in any business and unexpected downtime can be severely detrimental. A hybrid POS system gives you the best chances of removing risk for any downtime. It can operate with and without internet service; if there are problems with the internet, it can function on local servers. If there is an issue with the local server, the hybrid POS system can operate on the cloud-based servers.
Preventing downtime is important for every business, as it can discourage customers, delay transactions and result in loss of profit. If there is a malfunction with a POS hardware component, it can be quickly replaced. However, problems with POS software can result in either malfunction of a few features, or even a shut down of all POS operations. Both on-premise and cloud-based POS software on their own can have risks of unexpected downtime. Cloud-based POS systems would not work if there are problems with internet connectivity, while on-premise systems can slow down due to local server issues.
2.Excellent Data Accessibility
A POS system is a storehouse of data, providing detailed insights on products, sales, customer profiles and preferences, employees, and past promotions. A hybrid POS system gives excellent data accessibility, enabling you to use that data whenever and wherever needed. Through the cloud-based server, you can access the data remotely in real time. The on-premise server gives you access to the last synced POS data anywhere you may be, even without internet access.
Access to POS data can be used in multiple ways to speed up transactions, improve customer service, increase sales, guide promotions and for better overall management. Customer history can help at checkout points to instantly draw up past transaction details to complete new purchases quickly. Sales personnel can use data to encourage customers to increase their average order value by recommending additional products, and applying sales tactics such as upselling and cross-selling. Business owners and managers can remotely plan new promotional campaigns based on real-time data.
Mobile POS setups are gaining immense popularity as they support full flexibility, allowing employees to move throughout the premises without interrupting POS operations. A hybrid POS system is the best possible support for a mobile POS setup, as it provides full support for POS operations with or without internet connections. For businesses with relatively larger open spaces for customers, having multiple mobile POS terminals is a good idea. It helps you give customers personalised attention, forming a better bond and encouraging loyalty.
Apart from within the business premises, hybrid POS systems promote excellent mobility outside the main business area. A great way to increase brand awareness and attract new customers is to setup temporary sales stalls, counters or pop-up stores. Based on your business niche and location, you can try out various conventions, events, fairs, and local markets. With a hybrid POS system, you can setup business anywhere in any location. If internet connectivity is available, cloud-based servers can be used with real-time updates. In case there are problems with internet access, you can operate the POS system in offline mode and sync it when you gain internet access.
Preparing for expansion in advance is always beneficial, and a hybrid POS system supports excellent scalability. As the need arises, you can add more terminals and checkouts to your POS system, without worrying about connectivity or capacity. Depending upon the POS software provider, you may need to upgrade your subscription package, and can directly install and set up POS terminals as required. With a hybrid POS system, expansion is supported for both stationary and mobile POS setups.
Along with increasing the number of POS terminals and checkouts, scalability is also possible by increasing the features of the POS system. Even while staying within the same physical space, your business needs may change and evolve. New features and integrations can be easily installed on a hybrid POS system, similar to the process for cloud-based software. Once you update the offline devices and sync them with the overall POS software, you can use all the features from any POS device. Applying new features on an on-premise POS system after installation is complex and can be expensive, while cloud-based POS software can only use new features when connected to the internet.
The data collected by POS systems is vital for success and data loss can disrupt business operations. A hybrid POS system offers excellent security for your data with regular backups. Based on the POS software provider and your chosen settings, you can decide upon a frequency for automated backups. The backup data is then stored remotely online as well as on local servers, giving your data double the security and accessibility. In case of any online bug, you have offline backups, and if there are any problems in the local server, you have a cloud-backup.
While it may seem unnecessary to take so many precautions, it is well worth the effort, rather than facing a data loss. Even if you have an older backup, recent data loss can disrupt inventory management, sales reports, employee management, and customer relationship management. If you do not have any backup left, it can be disastrous and take a long time to recover. It can also damage your brand image in front of customer if you lose their details or data on customer loyalty programmes. Better safe than sorry, and the best safety is with a hybrid POS system that provides dual security of precious POS data.
Is a Hybrid POS System the Right Choice for You?
Even with its many benefits, a hybrid POS system may seem to be an added expense, especially if you primarily have fixed POS setups and good internet connectivity. Each business and its needs are unique, so before you invest in a hybrid POS system scrutinise to see if it is the right choice for you. Here are the broad factors you should consider to decide if a hybrid POS system is suitable for you:
- Business Needs
The first and foremost step is to examine your current situation and what your business needs are. What level of accessibility are you expecting? Are you prepared to access POS data only from local servers? How frequently do you expect you will want to add new features to the POS software? If you want remote accessibility and flexibility to easily add new features, then an on-premise POS system might not be suitable, and you should consider cloud-based or hybrid POS systems.
Another important factor to analyse is your current internet connectivity situation. How is the layout of your current premises? Is the internet connection strong enough? Are you planning an expansion? Think about where you want the POS terminals to be setup, and if you want stationary checkouts or mobile POS setups. Do you want to support additional external sales stalls or pop-up shops? Check the strength of your internet service at each POS location, and whether you can work with internet connection boosters.
If you do not have full-strength and reliable internet access at every probable POS location, then you should consider a hybrid POS system. It will help you bridge the gaps between offline and online locations, supporting seamless POS operations. A hybrid POS system will also enable you to take your business on the move, wherever the need arises.
When considering any type of POS software, it is essential to check the compatibility with your POS hardware components and any other business tools you wish to integrate. Most hybrid POS software providers support excellent connectivity with popular POS systems.
If you already have POS hardware components or an existing POS setup, verify if it is compatible with the hybrid POS software you are considering. Discuss with your POS software provider if they offer plans for POS hybrid software and if they can set it up. Checking compatibility in advance helps you avoid unexpected expenses of purchasing new hardware components.
In case you do not have any POS setup, and are considering setting up a hybrid POS system, carefully plan out your POS hardware purchases. Understand the requirements of the hybrid POS software, and accordingly select POS hardware components. Always purchase from reliable sellers and opt for good quality components to get the most out of your investment. Choose POS hardware components with adequate connectivity so that they can be used with other software and hardware pieces if the need arises.
Budget is a relevant criterion for nearly every business decision, and is also important when you are considering POS systems. There are two main types of costs involved, and they are for the POS hardware components and the POS software.
The biggest initial cost for a POS system is the purchase cost for the various POS hardware components, and it is multiplied for every checkout point you want to support. Important POS hardware components you will need include POS terminals, barcode scanners, monitors, cash drawers, EFTPOS, payment processors and receipt printers. After the initial purchase, the operating costs of POS hardware components is low, and will primarily involve purchase of consumables such as papers, or inks.
The cost of POS software will depend upon the type of POS software you choose. On-premise POS software has a large initial installation cost but no recurring charges apart from paid updates. Cloud-based POS software is available on a subscription basis with a regular fee that is all inclusive. Hybrid POS software generally has a similar costing structure to cloud-based POS software, but can involve slightly higher installation charges to setup local servers.
The key to success for any business is to offer customers a positive experience, as this will encourage them to purchase, return again, and recommend your business to others. Reliable and good quality POS systems offer multiple benefits to any business, and help in creating positive experiences for customers. They allow you to leverage data to further revise and improve business decisions.
As technology has advanced, POS software has evolved and from the earlier on-premise and cloud-based, there are now hybrid POS systems. A combination of on-premise and cloud-based POS software, a hybrid POS system can be used online and offline. When an adequate internet connection is not available, the hybrid POS system works offline and syncs with the overall POS system when connection resumes.
For an effective POS system, you need efficient POS hardware components. Here at POS Plaza, you can find good quality POS hardware components, accessories and consumables. Reach out to us today to discuss your POS needs and find a suitable solution.