How does POS System Balance Dynamic Restaurant Needs?
It is hard to picture a plate of dishes that could be ordered by simply tapping a finger on a tablet before the twentieth century. However, the game-changing innovations in point-of-sale (POS) systems have marked a momentous milestone in making once impossible dreams possible.
In short, the term POS system refers to a type of software generating analytical statistics on the business performance through real-time data. It commonly entails hardware like iPads, tablets, PCs, and barcode scanners, to support both bank cards and other e-payments while ensuring financial security.
When dine-in food services shut down during the pandemic, outsourcing delivery became a lifeline for millions of restaurants around the world. Restaurant operators are bracing for turmoil in the market for dine-in food services backed by the COVID-19. Many of them scrambled to set up cloud-based delivery channels from scratch, drawing their attention to the POS retail system. In benefit of the system's convenience of tracking orders and managing inventory, the POS market has been increasingly heated as restaurant operators pour money into purchasing this type of software.
Handling countless deals can readily overwhelm restaurant owners, driving them to inevitably rely on POS systems to monitor cash flows across identical periods of time and even estimate future cash flows. Despite common measures on order sales, POS systems also provide details about the opening and closing stock of each item, labor expenses and shifts, internal expenses, and customer orders with specific dates and number of visits. To avoid bookkeeping redundancies, POS systems are known to be faster and more accurate with seamless payment integration.
With a rampant global trend of POS system adoption, the restaurant industry has witnessed bumper profits to snap up logistics businesses in outsourcing food delivery. According to Global Market Insights, the restaurant POS terminal market size exceeded USD 10 billion in 2020 and is expected to grow at a CAGR of over 12.5% from 2021 to 2027. The total global annual spending on POS software by retail and restaurant businesses will soar to USD 1.7 billion in 2024 from USD 1.1 billion in 2019, referring to Juniper Research.
China's Market Upholds a Dominant Position
In the Asia Pacific region, China is standing steadily and dominating the restaurant POS software market because of its rising growth in the infrastructure sector, strong investments in restaurant technology, and rapid adoption of POS solutions by full-service restaurants (FSR). Along with sweeping technologies in e-payment, POS systems have been one of the most prominent uptakes of digital technology that happened with the head-spinning speed in China. Estimated by 2024, China will hold up to 40% of the global POS market revenue with vendor app integration.
However, POS terminals have a strict certification system in China. On October 29, 2019, following China's market sheriff, the State Administration for Market Regulation (SAMR), the People's Bank of China jointly developed a new verification system called the Certification of FinTech Products.
This certification system applies to 11 types of listed products, including application software, cloud computing platforms, POS terminals, and more. Even after a certificate is issued (valid for three years), the certified party will be subject to ongoing supervision to ensure the product continues to meet requirements, including through on-site inspections.
In recent decades, the POS market has well extended beyond the China mainland and reached the other side of the Pacific Ocean. In the United States, many enterprises have long seized the chance to bite a share of the overseas POS market.
MenuSifu: The POS Giant Enabling Digital Experiences In U.S. Restaurants
Founded in 2013, Menusifu is a New York-based company providing POS systems to the restaurant and hospitality industry. The company provides seamless POS software services and additional solutions to improve omnichannel experiences for customers in a variety of food-service scenarios. MenuSifu assigns customized POS services to different types of restaurants, such as fast food, full service, buffet, etc. The diagram below shows the company's provided services:
The company has launched businesses in all 50 states, including the State of Alaska and Hawaii, reaching over 10,000 service points in the United States, according to the CEO of MenuSifu, Yu Li.
The company is actively expanding its POS services in the U.S. market while embracing cultural diversity. "Our provided services emphasize inclusivity and cast a wide net to different restaurants, including Chinese, Japanese, Korean, Vietnamese, and Mexican restaurants," said Li.
The company discovered challenges and losses the customers encountered due to the traditional isolated information systems they used. MenuSifu firmly believes that seamless information integration and management system can help restaurants to reduce operation costs and to identify new ways of growth. Their work in this aspect has brought consistent customer growth in a wide variety of communities.
"After 8 years of development, we have established our key products and service lines facing restaurants, but in the meantime, we noticed that there is much more we can do to support our customers. This requires us to keep devoting to this industry in the future," said Li.
Li pointed out that they stay flexible to meet the changing needs of the market. He disclosed that the company has come up with innovative solutions to assist restaurants during the challenging time of the COVID-19 pandemic. In terms of the post-pandemic era, Li said that leading technologies, such as big data, smart equipment hardware development, and robotics services, can be and should be promptly applied to the global market.
When asked about the strategies to cope with the competitions, Li said, "we believe that our biggest competitor is ourselves. We are always in tune with our client's needs instead of chasing the other players in this field. We are progressing steadily with our company's goals."
The company will focus on expanding its market for now and is working toward the goal of a one-stop service for its customers.
Small Fish In A Big Shark Tank
The POS software market has proven its growth potential and attracted small enterprises to compete on this battlefield.
For example, the privately-owned financial service provider in the Greater Los Angeles area, Alliance Bankcard Services, was founded in 2000 and is known to provide fast payment processing solutions. Starting from the early 2000s, the company was originally focusing on credit card terminals. Until 2005, they cooperated with other companies and sold POS services.
William Sze, the founder of Alliance Bankcard Services, explained that the company currently has over 50 employees with one service point as the development center in the City of Industry, California. The company is taking action on raising investment to complete the Series A funding round.
"In 2015, we created our first POS service. We are still in stage one of the development processes in POS services while working on the restaurant reservation and other e-functions," said Sze.
The company's flagship products also include both desktop and handheld POS terminals in the Chinese version, serving the wide Chinese American communities in many retail scenarios. Benefiting from the nature of mini-sized and mobile POS terminals, the company's products have been widely used in on-the-go businesses, such as pop-up stores, home delivery, and food trucks. Currently, the company's provided POS services are evenly applied to Chinese restaurants and other restaurants in the U.S.
Since the early 2000s, Alliance Bankcard Services have cumulatively collaborated with over 10,000 companies. Sze indicated that many restaurants did not equip with POS systems in the beginning and only started to use this type of service until 2002. In 2005, the first wave of payment integration between POS systems and credit card payments emerged. Companies like MCR LLC have also engaged in this payment innovation.
"We are going white label for now and working with other companies. Those companies can use their own brands while using our services," said Sze.
During the COVID-19, food delivery apps, such as Uber Eats and DoorDash, are ramping up in the United States, serving as another incentive for boosting POS services. Two years ago, Alliance Bankcard Services created a new all-in-one function allowing customers to scan QR barcodes to order food services at home amidst the pandemic crisis.
"I think this industry is expanding because everyone is using faster payment processing solutions. We developed our POS services based on cloud platforms and are formulating our supply chain," said Sze.
Sze explained that the company's products are deviated from China's POS products because of its cloud-based characteristics. Not just providing POS services but also offers loans to restaurant operators as part of its service package. Sze unveiled that Alliance Bankcard Services is partnering with Edison Future, an American startup company producing electric pickup trucks, and expected to launch its POS systems on electric vehicles to accelerate autonomous food delivery services by 2028. This is an extra step of gaining a foothold in the evolution of Chinese POS systems.
In A Nutshell
Point-of-sale systems are productive additions to help restaurant retail to track sales history, process transactions, and track inventory. Despite geographical locations, point-of-sale systems have turned into a lucrative business. As exemplified by MenuSifu and Alliance Bankcard Services, both large- and small-sized enterprises are actively investing and developing their POS services in this rising business sector. Its growth potential has been proved either in the China or overseas market as more companies are facilitating positive and revolutionary transformation in this industry.