Microsoft Pursues the Smallest of Retailers

With its new Point of Sale push, Microsoft is fighting Intuit for the single-store retailer market. Both vendors are getting plenty of pushback from inexpensive electronic cash registers.

Microsoft Corp. formally unveiled Microsoft Point of Sale on Wednesday, marking the Redmond, Wash., companys official entrance into the low-end POS market with a product designed for small retailers and especially those with only one store.

Although there are many niche products in the low-end POS market, Microsoft Corp. is competing with only two: Intuit Inc.s QuickBooks POS line; and the low-cost, somewhat reliable ECR (electronic cash register), which is still popular among many small retailers.

Its that ECR category that has the most potential for either vendor, with todays low-end retail space wide-open. There are some 1.7 million small retailers today, defined as those with fewer than 10 stores, said Steven Aldrich, Intuits general manager for QuickBooks POS. Of that 1.7 million, Intuit is the market leader with barely a 2 percent share (about 35,000 retailers), he said.

That leaves 98 percent of the market up for grabs with both Intuit and Microsoft offering relatively similar products. ECR products come primarily from Royal Consumer Information Products, Inc., Casio Inc., Sharp Electronics Corp. and Samsung Electronics.

Both Microsoft and Intuit are trying to leverage their popular software—Microsofts Office suite and Intuits QuickBooks accounting package—as more seamlessly integrating with their POS. Users suggest that those claims may be academic. The QuickBooks open-software developers kit makes it easy to integrate QuickBooks with other applications. It should also be simple to take a number out of any POS package and drop it into an Excel spreadsheet.

Mike Dickstein, director of POS Solutions within Microsofts Business Solutions business group, argues that Microsofts package is friendlier to small retailers. "We looked at this market and think that this is the only POS that has been designed for small retailers," and the Microsoft package is better "than either a cash register or a POS that is really too complex for the level of service required," Dickstein said.

/zimages/2/28571.gifClick here to read more about Microsofts embedded operating system for retailers.

"Most of the systems out there are far too complex," Dickstein said. "It requires five or six steps to enter a transaction for many of these, and they are not intuitive. You need to understand these cryptic codes to process a credit card transaction."

Microsofts position is that its new POS package has a much simpler interface and that “the product works like Office."

One distinction with Intuit is that Microsoft is pushing an informational wall between employees who take the money and employees who count the money. "We separate the cashier role from the manager functionality," Dickstein said. "It can make shop owners nervous having the cashiers with access to accounting. We specify what everyone can have access to."

Microsoft is promising to ship its POS line June 1 and chose to announce a suggested retail price of $799 per checkout lane, which is the exact same price that QuickBooks POS sells for.

Next Page: A daunting small-retailer attitude.