Just back from the NRA show in Chicago.
One of the most encouraging things I saw this year was the growth of the lower-end POS market. Among the usual crowd of POS vendors at NRA (67 this year, by my count) were a lot more companies presenting inexpensive, simple, core-functionality solutions—generally tablet based—which I came to call “POS Lite.”
What great news: for the customers, for the marketplace, and for us.
It’s great news for the customers. Without that low-cost, simple solution, folks who run small, independent restaurants wouldn’t be able to afford, and couldn’t justify, using a POS. For them, their only option would continue to be paper tickets, manual closing, and spreadsheet-only reporting. With POS Lite solutions, they can have the core POS functionality—order entry, automated closing, enhanced security and more—without having to load up with functionality they’ll never use (like inventory control or automated PO generation).
It’s great news for the marketplace. A software marketplace—ours most definitely included—is only as strong as the scope of its coverage. Markets are strongest when there are products available for every segment. The usual trajectory is that the first segment served is the high end: that’s where the big opportunities are. As the solution set matures, products are created for mid-level companies. But only when there are solutions that address the limited needs of the smallest segment can that marketplace truly be considered strong and stable.
And it’s great news for us. It primes the pump. Many of those independent restaurateurs will be successful, will expand, and will one day outgrow their POS Lite system. When that happens, they’ll turn to companies like Maitre’D. They’ll be knowledgeable and ready-to-buy, and that makes them very qualified prospects.
Of course, not all of those POS Lite vendors will survive—some won’t be very good, won’t deliver value, won’t make good on their ROI promise. Just as there were many new POS companies at NRA, many from last year were not there. But those that are good are a welcome addition to the market. Over time, the best of them will begin to grow their own functionality, responding to increasing demand from their customers. Eventually, some solutions will become robust, and the market for them will expand to larger segments. Some will even transform from market collaborators to market competitors.
There’s a kind of natural tendency, in most markets, to worry that a good, cheap solution will erode the markets for more robust offerings. But it’s almost never the case—a marketplace needs a range of solutions, functionality and price points to sustain it. The new, tablet-based, lower-end solutions are not a threat, but instead a great addition to the POS universe.