How Restaurant POS Software Has Evolved Over the Past Decade

Restaurant POS software has moved to the cloud, it supports new types of payment, and delivers customer experiences that today’s consumers demand.

restaurant POS software

When is the last time you met with your customers to evaluate the restaurant point of sale (POS) software they’re using? In a quickly evolving industry, the tools restaurateurs use to operate — more importantly, to operate competitively — may also need to change.

Mike Hamm, COO of Focus POS, share some of the ways that restaurant POS software today is different than it was five or ten years ago, and he highlights some of the ways in which your customers may be at a disadvantage if they haven’t upgraded their POS systems recently.

  • POS software moved to the cloud. Hamm says cloud is now the preferred method of restaurant POS software delivery. Software applications in the cloud enable restaurant operators to access data and reports anytime, even when they’re offsite using their smartphones or tablets. They can also make changes or update menus and perform general system management from virtually anywhere they can log onto the internet.  “That didn’t exist ten years ago, and you can’t operate without it now,” Hamm comments.
  • Software can be an OPEX instead of a CAPEX. Delivering restaurant POS software via the cloud also made it possible for solution providers to offer it on a Software as a Service (SaaS) basis. Instead of restaurateurs making an upfront capital expenditure to purchase software licenses, they can pay a monthly fee — which includes maintenance and updates — to use the software. “Some restaurants are choosing this option because it makes it very easy to budget. They know they’re paying a predictable amount per month for software and support, and that fee won’t change,” Hamm explains.
  • EMV changed payments. Hamm says EMV payments, which U.S. merchants began accepting in 2015, has had the biggest impact on restaurant technology. POS software needed to adapt to allow restaurants to accept chip card payments that consumers “dip” instead of “swipe.” More than 67 percent of all U.S. merchants are now accepting EMV cards, although, in general, restaurants have lagged behind retailers in adoption. This may represent a current opportunity for value-added resellers (VARs) and managed services providers (MSPs) to help their customers upgrade to the new technology.
  • POS went mobile. Mobile POS — using a mobile device to perform POS functions like taking orders and accepting payments — is now a standard offering throughout the industry. Hamm points out, however, “It’s not standard for every restaurant due to the expense, but it’s a great fit and a great tool for some restaurants.”
  • Customer behaviors changed. In the last decade, the millennial generation has overtaken baby boomers as the largest consumer demographic, and their dining habits are different. “They eat out more, but they are less likely to dine in and tip, so they choose online ordering for pickup or delivery,” says Hamm. “The convenience for young parents and busy young professionals to order food at the end of the work day and then swing by on the way home to pick it up can’t be ignored.”
  • Restaurants required new POS functionality. With changes in consumer behaviors, Hamm says restaurants need their POS systems to provide them with new capabilities. “Add-ons and additional features are a big part of what Focus POS does now development-wise with third-party companies,” Hamm says, “especially online and mobile ordering and loyalty programs.”
  • POS became a management tool, not just a cash register. The POS system has evolved into a centralized management hub for all business data. “The POS system isn’t just a piece of the wheel, it’s the center. Database configuration, online ordering, and mobile ordering are all spokes of the wheel, but the POS is the command center,” says Hamm. He adds that restaurants are also leveraging POS reporting more to run their businesses more effectively.

Advice for VARs and MSPs Selling Restaurant POS Solutions Today

When you look back at the changes to restaurant POS solutions over the past five or ten years, it’s easy to see that restaurants need more than someone to simply sell them a solution. The trend now is for restaurants to lean toward low-cost POS apps, but Hamm points out that basic solutions may not give restaurants the functionality or scalability they need. “Be a consultant, be an expert advisor, and use knowledge of the industry and POS to guide them,” says Hamm.

He adds that to ensure your own future in this vertical market, you need to expand your business beyond providing only POS systems. “VARs have the knowledge gained from thousands of different installs and can provide useful insight and guidance to restaurants,” says Hamm. “If a VAR wants to survive as a restaurant POS provider, you have to be as a consultant that helps restaurants with all their different needs.”