Microsoft POS targets small retailers by Ann Bednarz

Microsoft Wednesday is expected to unveil point-of-sale software aimed at helping small retailers automate sales, inventory and store management tasks.

Sophisticated POS packages typically are too complicated and expensive for single-shop retailers, says Mike Dickstein, director of point-of-sale solutions in Microsoft’s Business Solutions division. The new Microsoft Point of Sale (Microsoft POS) product is geared for these small businesses that don’t require server-based systems, he says.

Microsoft POS includes tools for tracking and managing sales, inventory and customer information. The software stores customer information locally on a merchant’s machine, so salespeople can view customers’ previous purchases and preferences. Instead of manually checking the racks to get a glimpse of available inventory, store personnel can see inventory details right at the register. Remote access options allow storeowners to check sales and employee activity from a home PC.

More and more small retailers are looking for PC-based alternatives to electronic registers and manual record keeping methods, analysts say. According to IHL Consulting Group, shipments of PC-based POS terminals grew 12% between 2003 and 2004. More than 40% of single-store retailers now use PC-based technology, the research firm says.

Microsoft POS is not the vendor’s first foray into retail sales software. The current Microsoft Retail Management System (Microsoft RMS) suite is based on technology Microsoft gained in its 2002 acquisition of Sales Management Systems. It’s designed for small and midsize retailers with 100 or more locations and includes support for more advanced tasks such as matrix inventory, which is a method of tracking inventory by multiple attributes such as size and color.

“RMS is designed for a retailer with multiple stores who wants to centrally manage the stores, inventory, transactions and customer information," Dickstein says. POS is designed for a single-store retailer or a multi-store retailer that independently manages its stores. Microsoft RMS is a server-based system, whereas Microsoft POS works in a peer-to-peer fashion with other systems in the store, Dickstein adds.

Another difference between the two products is application connectivity. Microsoft POS is compatible with Intuit’s QuickBooks accounting applications. Microsoft RMS works with a broader range of low-level accounting programs as well as higher level ERP suites such as Microsoft’s Great Plains software.

“This allows [Microsoft RMS] to scale to a midsize retailer who’s using a full ERP system. Point of Sale is not going to be used by a retailer that’s large enough to have an ERP system," Dickstein says.

A single-lane Microsoft POS license costs $799, as compared to $1,190 per lane for Microsoft RMS