Imagine running your own shop when there was no technology like today, where keeping track of daily sales was a perplexing puzzle. Shops, especially big retailers, faced a frustrating reality: no point-of-sale (POS) system or reliable means to monitor transactions. You can probably picture the uncertainty – you had no way of knowing your exact income for the day, making it distressingly difficult for you to manage everything properly and make day-to-day decisions. However, today, you have a POS system to manage your retail operation. But how did it get here? Let’s learn about the evolution of the POS System.
The POS solution that we know today has a long history, and it all started by a saloon owner from Ohio back in 1879, poised to revolutionize the world of business. This ingenious mind struck upon an idea that would reshape the course of commerce forever. Let’s journey back in time to explore the fascinating history of the point of sale (POS) system.
You should also know that before this innovation, transactions were an enigma. And the unknown Ohioan, driven by a desire for efficiency and transparency, planted the seed for what we now know as the POS system. Consider a busy saloon: patrons now had a clear record of their purchases, and the owner could systematically track every sale. This transformative concept spread like wildfire. Fast forward to today, and virtually every business employs a version of this invention.
So, next time you make a purchase and witness the transaction being smoothly recorded, remember that an inventive saloon owner from Ohio kindled the spark that ignited this retail revolution. Let’s explore the journey of today’s modern POS system and its evolution throughout history.
The 1880s First Cash Register – The Backdrop of the Modern POS Solution
The evolution of POS system goes back to the 1880s when the American Civil War concluded. During this period of time, the world witnessed a remarkable transformation in American businesses. The need for extra hands to assist customers grew exponentially as they expanded. However, this expansion came with a significant challenge – the newly hired staff, often strangers, had the perfect opportunity to pocket customer payments slyly. With no effective way to monitor sales, instances of internal theft became rampant, especially in bars and shops.
But a beacon of change emerged from Dayton, Ohio, where James Ritty is a determined saloon owner. His establishment, The Pony House, bustled with visitors, yet it also harboured a problem: unscrupulous bar staff surreptitiously making off with the bar’s hard-earned money. Frustration drove Ritty to seek a remedy, which he stumbled upon during a pivotal steamship voyage to Europe.
Imagine him aboard the steamer, captivated by an ingenious mechanism that meticulously tallied the propeller’s revolutions. Inspiration struck as he considered the potential application of such a mechanism for tracking payments at The Pony House. His determination ignited, and Ritty returned to Ohio with a vision.
The invention of the First Cash Register
Driven by his newfound insight, he embarked on creating the world’s first mechanical cash register. This invention had the power to revolutionize businesses, curtailing internal theft and instilling transparency in transactions. Through experimentation and sheer will, Ritty crafted a device that would forever change the way commerce operated and will lead the way forward to the evolution of the POS system.
Patented in 1879 as “Ritty’s Incorruptible Cashier,” it featured a prominent display for customer payments and an internal section to calculate total earnings, though lacking a receipt printer or cash drawer. Ritty’s factory produced just one, acquired by John Henry Patterson, owner of a coal shop in Coalton, Ohio.
So, the next time you use a cash register or witness a smooth transaction, remember that a determined saloon owner’s frustration and fascination with a steamship’s mechanical marvel paved the way for a game-changing innovation that would later be recognized as the modern POS system.
However, due to the dual responsibility, James Ritty sold his company to Jacob H. Eckert. Then, he infused innovation by introducing a cash drawer and refining the bell system. Again, the company changed hands to John H. Patterson in 1884, evolving into NCR Corporation, as the cash register’s practicality soared with receipt-printing and proactive sales strategies, heralding the rise of the modern point of sale.
Evolution of POS systems – Mechanical to Electrical
The retail sector changed significantly after the revolutionary discovery of Ritty’s Cash registerer. Moreover, following the first cash register, numerous developments have added new features to make retail operations more feasible. However, the shift from Mechanical to electrical cash registers has been one of the most noticeable changes in the evolution of POS system. And without this development, we won’t be able to complete the evolution of the POS system.
In 1906, NCR’s Charles F. Kettering introduced the first electric motor-powered cash register. However, the major development occurred when electronic calculators were introduced, which paved the way for fully electronic cash registers in the 1950s and 1960s. This was the game-changing moment when electronic cash registers took over the retail business.
1973 POS Revolution – IBM Introduced its First Point of Sale (POS)
We know about the evolution of POS system until the electronic motor-powered cash register, which certainly brought a huge change in the retail sector. However, the revolution was brought about by IBM’s first modern point of sale (POS) system.
The tech giant IBM first introduced the point of sale (POS) system in 1973. And that amazing machine could manage up to 128 tills via local area networks. This was the most groundbreaking milestone the world could ever see. With the help of IBM’s technology, McDonald’s replaced their electronic system with the first microprocessor-based tills. However, the system was still behind the line of perfection in the 1980s with the compact graphical data machines that could efficiently run a retail business without hefty costs.
IBM made history again in 1985 with its next big lip by launching the first PC-based POS system. In 1986, Gene Mosher pioneered point-of-sale software with a colourful touchscreen interface, echoing elements later embraced by web browsers.
The 1990s – Windows-Based POS System Took Over
Technology evolves with time, and it is not any different for the world of retail management systems. Since 1880, the retail industry has seen numerous changes, while IBM pioneered the market for almost two decades. But with the introduction of Windows from Microsoft, another revolution was imminent.
In the 1990s, with the internet boom came Windows-based POS systems. Computerized POS solutions span various machines and operating systems, but Windows emerged as the prominent platform.
As you journey through this evolution, envision the transformation of point-of-sale technology from mechanical devices to intricate electronic systems, setting the stage for modern commerce and reshaping the way we conduct transactions. But another big evolution of Point of Sale (POS) is yet to come. Let’s check that one!
Cloud-Based POS Solution – Evolution of POS System with Cutting-Edge Technology
Cloud technology has made the world faster and more accessible. So, POS system developers had to adapt to this technology to make retail more accessible with better control. Thus, the cloud POS brought the biggest revolution in the evolution of the POS system.
As you journey through the 1990s and early 2000s, envision the traditional computerized POS systems that demanded manual hardware and software installation, upkeep, and updates. So, keeping that in mind, E-POS, short for electronic point of sale, gained traction in retail settings.
The advent of the internet and cloud technology revolutionized EPOS into Software as a Service (SaaS). A service provider owns and operates the software in this modern iteration, while users pay a periodic fee. Cloud-based POS systems, introduced in the UK in 2002, found their home on robust touchscreen PCs. Later, in 2007, McDonald’s first started taking payments through credit cards using the cloud POS solution.
Cloud-based POS evolved with Smartphones
In the evolution of the Point-of-sale (POS) system, smartphones also greatly contribute to making retail operations even more streamlined and cost-effective.
Back in 2007, smartphones started to gain popularity, which later resulted in transforming smartphones into mobile point-of-sale platforms with card payment capabilities. This innovation quickly led to compatibility between cloud POS systems and consumer-grade mobile devices, boosting accessibility for micro-merchants.
With the help of mobile POS and wallets, millions of people make payments, and the latest development in cloud POS systems has made it possible.
The most important factor of cloud-based systems is that they can excel anytime, anywhere by providing accessibility and automatic data backup, maintenance, and updates. These advantages fuel informed business decisions through superior analytical insights. Moreover, today’s POS systems not only help you with your retail with ease but also help you with marketing, pricing, inventory, and customer service functions.
In short, from the first cash register to mobile POS, the evolution of POS system is a long journey, but this innovation brought traction into how the retail business operates today. So, suppose you are a retail business having difficulty managing your retail. In that case, it is a good time to adapt to the latest cloud-POS system and streamline your retail for smooth and cost-effective operation.
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