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Read More >>Technology is a great equalizer in any business. The right tech stack can help you operate more efficiently, identify opportunities, and stay organized. And one of the most trusted pieces of retail tech is a POS system.
An effective POS system – whether Cloud based or a traditional POS system – has the power to transform your business.
But which type of POS solution should you choose in 2024?
There are two main options: Cloud-based POS vs On-premise POS System.
Cloud-based POS systems store and process data in the cloud, while legacy POS systems store and manage data locally on hardware/servers that are set up within the facility.
In this blog, we are going to see the advantages of a Cloud POS system and legacy POS system. Moreover, we will also check the key differences (presented in a table below) between them and why retail businesses prefer Cloud POS system over non Cloud based POS.
What is a Cloud-based POS System?
A Cloud POS solution empowers business owners to handle daily operations on the go. A web-based POS system (Cloud POS System) stores data on remote servers and can be accessible anywhere through internet connection. This allows retailers to access inventory data, sales reports, and manage marketing campaigns from anywhere, anytime.
Thinking about switching or expanding your business? A key benefit of cloud POS systems is faster set-ups that require minimal technical expertise.
Generally, web-based POS systems are pay-as-you-go SaaS software. This means you pay a monthly fee (or a license) to use the software and store your data each month. Ultimately, cloud point of sale systems offer several key advantages, with fewer drawbacks.
77% of businesses experienced growth by adopting cloud API’s for messenger systems, storage, and databases.
Pros of Cloud Based POS Systems
One of the key advantages of a cloud-based point of sale system is that it is easy to set up with minimal operational downtime. This enables businesses and enterprises to instantly adjust to the new system with minimal technical intervention.
Let’s explore a few other benefits, including:
1) Flexibility
A POS that is cloud based offers flexibility to access inventory data, transaction data, sales data, and more from any location at any time.
2) Cost Efficient
Unlike traditional POS systems, Cloud POS systems don’t need a hard drive or server for data storage, which means lower upfront costs for you.
3) Real-time Updates
You can sync data across your entire operation instantly with a Cloud-based POS. For example, if you need to update the price of an item using pricebook software, you can do that in minutes, and it will instantly sync across your entire operations (which is great for multi retail stores).
4) On-Demand Data
Retailers can access any data with a cloud-based POS to gain better insights into their day-to-day operations, including customer shopping habits, product trends, and more.
5) Scalability
As your business grows, you will need a Cloud POS solution that adapts to meet your evolving needs. You may want to push mass updates , apply discounted prices remotely, or accommodate increased transaction volume.
6) Security
Cloud POS solutions offer utmost security when it comes to data integrity and data management. Moreover, these systems ensure timely maintenance, and automatic updates for hassle-free operations. Say goodbye to maintaining servers and performing manual backups.
7) Enhance User Experience
Maximum uptime allows Cloud-based POS systems to efficiently handle payment processing, speedy checkouts, display accurate product information, send personalized promotions, and more. Customers can also enjoy seamless solutions for your online store, loyalty rewards program, age verification, etc.
What Are Legacy POS Systems?
An on-premise POS system, which is also known as a traditional or legacy point of sale, requires you to install a server on-site. These systems were traditionally hardwired, requiring extensive set-ups.
Cons of Legacy POS Systems
1) Basic Functionalities
These systems often offer only core features needed for day-to-day operations, such as basic inventory management, payment, and customer tracking.
2) Limited Scalability
On-premise POS systems store data locally, which can limit data accessibility and complex recovery in case of hardware failure. This may result in significant drawbacks for business owners with multiple locations (stores) or those requiring remote data access capabilities.
3) Integration Challenges
Legacy POS systems typically operate in silos and thus present challenges when it comes to integrating with newer software solutions like e-commerce platforms, accounting software, CRMs, customer loyalty programs, etc.
4) Backups
Unlike Cloud POS systems where the data is stored online, data backups for on-premise POS systems do not happen automatically. It must be managed by the end-user or via IT support team.
To help retailers make a quick decision between cloud POS system and on-premise POS system, we have listed a side-by-side comparison on how these systems stand in terms of setup, cost, maintenance, security, integration, and other parameters.
Comparison between Legacy and Cloud POS System:
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Making the Right Choice: Key Factors to Consider
Ultimately, there’s a lot to consider when buying a POS. But if you follow these tips, you’ll land on the best choice for your business:
1) Assess Your Business Needs
Identify your business needs such as real-time data access, seamless integration (age verification, loyalty program, etc.), inventory on-the-go, etc.
Keep all other business aspects in mind to determine whether Cloud or legacy POS system will suffice the needs for growth and customer convenience.
2) Total Cost of Ownership
Evaluate the long-term costs of traditional and Cloud POS solutions. Consider maintenance & upgrade cost, license fee, server cost, data storage, etc.
3) Think about Scalability
If you plan to expand your business, a cloud-based POS system might be more suitable. These systems allow for easy addition of new terminals or locations without significant infrastructure changes.
4) Data Accessibility
Cloud POS systems offer the advantage of accessing your business data from anywhere with an internet connection. This is especially beneficial for business owners who manage multiple locations or travel frequently.
5) Security Concerns
Cloud-based POS systems are more secure than legacy POS systems which are vulnerable to physical breaches (like theft).
Ensure that whichever option you choose has robust security measures in place, including encryption, regular updates, and compliance with industry standards.
6) Integration Capabilities
Cloud POS systems typically offer better integration capabilities with applications such as loyalty programs, accounting software, payroll etc., making data synchronization more seamless.
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Wrapping Up
Is It Time to Upgrade?
Today’s retailers need robust and scalable systems to outperform their competition.
A Cloud based POS system is recommended for business owners experiencing high volume of transactions, data on-the-go, a digital (online) store, retain customers & grow revenue with loyalty programs, and much more.
By switching to a cloud POS system, you receive a strong and cutting-edge system to support the growth of your business. Here are a few primary benefits that FTx POS provides:
- You can access the new backend management Control Center from anywhere, anytime
- Centralized database with 24/7 security backup of all your data
- Get rid of your server and the need to manage it
- Data security is our priority and thus, we regularly track all data management and maintenance
Join 1000s of Retailers who took their businesses to new heights with Cloud POS system.
