ShopKeep POS, a provider of cloud-based business management software for the retail and restaurant industries, recently surveyed more than 640 small businesses around the U.S., with most respondents stating they were optimistic about 2014.
According to ShopKeep, 94 percent of respondents expect to increase revenue this year, and 60 percent are planning to either increase marketing efforts or expand their product lines.
Other highlights from the survey include:
- 29 percent of respondents plan to increase their marketing efforts next year, and many plan to invest in their own marketing assets over traditional advertising.
- 53 percent plan to invest in a combination of email marketing campaigns and social media to extend their marketing reach, and 54 percent plan to invest in a new website or e-commerce presence.
- 82 percent of respondents believe a combination of great customer service, personal relationships and supporting a local neighborhood store is what keeps customers coming through the door, and will be key to success in 2014.
- 42 percent of respondents are already using real-time business data to make changes to their store within 24-hours.
“We are seeing an overall shift in the way small business owners are approaching their strategies for the New Year,” Jason Richelson, founder and CEO, ShopKeep POS, said in a news release. “They are starting to think big and take advantage of data, social media and DIY marketing to stay competitive, much more so than we have seen before. Cloud technology has really leveled the playing field for these retailers, and they are bullish about their plans for 2014.”
Seattle bakery The Confectional is now able to better understand its customers and stock its stores after switching over to a mobile point-of-sale system.
The cheesecake shop implemented ShopKeep’s mPOS in May 2012 and has since been able to better stock its four locations based on consumer preferences and other data from the mobile system. For instance, The Confectional dropped its coconut cherry chocolate and cookies and mint flavors after sales were not great for those specific cakes.
“ShopKeep has helped us greatly with our wholesale accounts and keeping track of those,” said Destiny Sund, co-owner of The Confectional, Seattle.
“It allows us to keep track of each customer in the system so that we can see who is ordering and how much, and this holiday season it’s been completely off the hook,” she said. “So we can easily track our biggest wholesalers and catering companies and see exactly what they’re ordering and what flavors they’re ordering.
“Our wholesale business has increased 35 percent this year over last year. ShopKeep helps us track it.”
Confectional upgrade
Before implementing ShopKeep’s POS, The Confectional used standard traditional cash registers. This meant that they did all tracking and managing by hand.
For instance, if someone bought a specific cheesecake, the register only took note of a general cheesecake as opposed to the specific flavor. After installing ShopKeep, the bakery was able to track individual flavors to see how each one was selling.
At first The Confectional tested out the mPOS in one store, but soon after the owners decided to roll it out in all four locations.
One capability that The Confectional has incorporated is the ability to send its customers receipts via email.
The owners are also able to check in on their shops remotely to see how sales are going.
Be prepared
The mobile POS helps The Confectional’s owners better prepare for demand. Each cheesecake is handmade and take 24 hours to make, so the owners can now better stock their shelves based on purchasing history and data, saving themselves the time and effort that went into making cakes that never got purchased.
Additionally, ShopKeep keeps track of The Confectional’s beverages and notifies them when supplies are getting low, so they can make a new order from Coca Cola.
The Confectional is also able to leverage information from ShopKeep to analyze the busiest time of day in different locations to better manage inventory.
For instance, the bakery now knows that the Single Mini Cheesecake is the best-selling cake in all four locations and that their busiest hours are right after lunch through 4 p.m. The owners can also tell that more than 95 percent of customers take their beverages to go, so they can better prepare in terms of the cups they buy.
“We knew that we need to upgrade our systems because we opened two locations in one year alone, and those old registers weren’t doing the job, so we looked into Dinerware, we looked into Square, Quickbooks,” Ms. Sund said.
“I found some YouTube videos put out by ShopKeep in my Google search — I just kind of stumbled upon it,” she said. “I watched the video and went, ‘Woah this could definitely work for our business,’ and it looked so easy.
“I’m a great baker, but not necessarily a great technical implementer. It looked like something I could do.”
Final Take
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York
ShopKeep, a retail point-of-sale (POS) system designed by a small retailer for shop owners like himself that includes a cloud-based management service, has added several new features — including direct integration with the QuickBooks accounting application.
The new service, made possible through a partnership with Retail Intel, allows stores to import up-to-data store data automatically, which saves on journal entries. The cost of doing this will be based on how many store locations a retailers is managing.
Other new features include:
- Up to 3,000 customizable buttons on the register interface
- A faster new printing feature
- The ability to print tickets to multiple stations in quick-serve restaurants (like the kitchen and bar); conversely, retailers with small stores or spaces (like food trucks) can print both receipts and order tickets to the same printer
- Updates reporting
- A facility for making it simpler to handle merchandise returns
Not to freak everyone out, but there are six fewer days than usual between Thanksgiving and Christmas this year. For shoppers, that means a tighter timeframe in which to negotiate parking lots and mall lines. According to the Washington Post, retailers have started the full court press on marketing for their most important season earlier than usual.
It’s like that scene in Gravity where the space shrapnel starts hurtling toward Sandra Bullock and she’s all, “Oh no, oh nononono.”
To cope — and by popular demand from its customers — ShopKeep POS is releasing a new version of its iPad-based sales management system to cut checkout time in retail locations. Retailers can now customize their register with color coded buttons and group products to jump between different categories more easily.
ShopKeep has also focused on receipt and order printing, a pain point that adds friction to the sales transaction. High volume restaurants can now print orders to multiple locations, like the kitchen and bar, while smaller retailers can print receipts and tickets to the same printer. They’re pretty sensible updates to ShopKeep’s platform, making life easier for the independent retailers that make up the majority of its user base.
In the coming year, however, ShopKeep is looking to add larger scale businesses to that roster as they move toward cloud services. As with these latest features, customization is a key part of that push.
At this point, about half of ShopKeep’s customers are quick serve restaurants, like bakeries, coffee shops, and food trucks. The other 50% tend to be boutiques, clothing stores, and pop ups. They’re the type of retailers who wold be inclined to adopt payment systems like Square.
“Our main competitors are Windows-based POS systems. Depending on the sophistication of the merchant, there’s PayPal or Square, but then they realize they need reporting and timeclocks and employee management. When you’re running a store you need retail management, not just payment. They’ll try those first and then move up to us,” ShopKeep founder Jason Richelson said.
Acquiring larger clients is a function of making ShopKeep’s system easily customizable through its API.
ShopKeep will provide the basic tools for payments, employee management, general ledger, and supplier management, and the retailer can then hire integrators to do custom work on top of that API. Retailers are able to use any payment and accounting providers they want; ShopKeep connects clients to payments, rather than serving as the payments provider.
“In three to five years we can be in a really large percentage of retail stores, very similar to what Salesforce did with CRM,” Richelson said. “It’s a very different world now. POS used to be very fragmented because someone had to install a server in your basement. It’s no longer a fragmented industry. There’s going to be a dominant player.”
The Confectional, a small Seattle-based pastry operation that specializes in cheesecakes, used old-fashioned cash registers for the first few years of its existence. Its decision to expand into a commissary near the city’s famous Space Needle made it rethink that decision: the space was simply too small. What’s more, the management company at the site required a much more detailed accounting of point-of-sale receipts than the older technology could offer.
That’s when the company opted to invest in an Apple iPad point-of-sale (POS) solution developed by ShopKeep , which was founded by a small-business owner from Brooklyn who was fed up with his options. The Confectional’s co-owner Destiny Sund said the technology’s small form factor, detailed reporting capabilities (it can now tell which flavors do the best, seasonally or otherwise) and proactive customer service were all factors in her decision to choose this particular platform. ShopKeep actually didn’t show up very high on her Google searches; she was convinced after watching a video tutorial that the company published on YouTube.
“They made us feel so comfortable in our initial calls, that I knew we would feel comfortable getting up and running,” Sund said.
The fact that the technology worked with the company’s existing credit-card processor, Gravity Payments, was another factor in ShopKeep’s favor. Another big plus was the system’s integrated time clock, which saves time in calculating payroll, and a mobile application that allows Sund and other managers to monitor all the locations (including the kiosks at the Space Needle, as well as its original location in the city’s Pike Place Market).
The technology, which has been in place about a year, has helped The Confectional change up its product mix for specific locations. For example, customers tend to buy smaller, individual four-packs of cakes in the newer location, while the original location at Pike Place tends to sell larger items. It has also helped keep track of when things sell, for staffing and production purposes.
“I am far more tuned into the business,” Sund said.
As American consumers begin to embrace tap-and-pay smartphone apps, relegating plastic to a deep recess in the pocketbook or wallet, more than half of U.S. small business owners continue to live in the past—forget mobile apps, they don’t take American Express, or anything other than cash.
For nearly 10 years Joe Coffee, a small chain of artisan coffee shops in New York City, accepted only cash. Not only was it a more profitable scheme—Joe’s average sale was $2.75 and credit card processing would eat up about 3 percent of each transaction plus add a laundry list of fees—but being cash-only was part of the company’s ethos.
“We thought of ourselves as the little mom and pop place with the owner behind the counter making coffee. Our signs were hand-drawn, our small coffee was $1.63, we’d only take cash—all those things went together,” said Jonathan Rubinstein, Joe’s owner.
Six years in, Rubinstein began to notice a shift in customer behavior. “We started reading our Yelp reviews—75 percent of the negative comments about Joe were about us not taking credit cards,” he said. “We were losing a lot of sales in terms of people not having cash and going to a competing coffee shop but also people spending less money who wouldn’t buy a $17 bag of coffee [beans] or a $75 grinder.”
Joe started accepting credit cards at its new outpost in 2011, a shop near Columbia University, where customers—mostly students—tend to pay with debit cards. The experiment went well enough that as of mid-October, nine in 10 Joe Coffee locations now take plastic. “Welcome to 1999,” the company tweeted on Oct. 23. “All of our stores (other than GCT) now take CREDIT CARDS! Our Yelp ratings about to skyrocket #sorryittookustenyears,” it said, referring to Grand Central Terminal.
Time to wake up, smell coffee
If cash has an added cost for the consumer reaching into the hundreds of billions annually—as one recent study found—the jury is still out on the lost sales opportunity among cash-only merchants. Sales from new customers may sustain the offsetting of expenses incurred by card processing fees. Joe Coffee is betting that by rejecting its cash-only ethos it’s in line for a snowballing sales channel in an age where cash is no longer king. According to a report by Javelin Strategy & Research, 27 percent of all in-person point-of-sale purchases were made with cash in 2011, while payments made with plastic cards—debit and credit—comprised 66 percent, and that is expected to rise.
“It’s the way of the future,” said Rubinstein. “Even though I was the one who came to this kicking and screaming for eight years.”
Rubinstein’s initial reluctance mirrors that of a broad swath of U.S. merchants. Fifty-five percent of the nation’s 27 million small businesses don’t accept credit cards, according to Intuit, the Silicon Valley software firm that develops financial and tax prep solutions for small companies. By not accepting cards, those 15 million businesses are missing out on $100 billion in sales annually—roughly $7,000 per company a year in either new sales or sales that go to competitors that do accept cards, said Intuit.
“I don’t understand the small businesses that don’t take cards,” said Jason Richelson, a former grocery and wine store owner in Brooklyn who founded ShopKeep POS, a purveyor of cloud-based point-of-sale software, in 2008. “In my opinion, as a grocery and a wine store owner, if you don’t take credit cards, you suffer—you could be increasing your sales 20 percent and you’re going to make your customers happier.”
Richelson points to another positive of accepting cards: Customers spend more money with them. Across ShopKeep’s merchants—more than 7,000 brick and mortar shops around the U.S.—the average spend per transaction is 120 percent higher when customers pay with credit card compared to cash.
The merchants of menace, and margin
Given the benefits of plastic, why don’t they take Amex? For many small business owners, it’s about solving a two-part math problem: Are profit margins big enough to absorb the cost of the credit card fees? And if they aren’t, would the new business that’s brought in via credit cards make up the difference?
For companies like Peters’ Bakery in San Jose, Calif., whose best-selling products are 70-cent donuts and $2.65 slices of burnt almond cake, the answer is no: “I get more business than I really need right now,” said owner Chuck Peters, who’d rather not take the chance of losing any of his loyal customers by raising prices.
Some well-established companies aren’t seeing a customer demand for plastic. “We try to stay old school as much as possible because we have a formula that’s worked—our restaurant has been here in the same spot since the 1950s,” said Kellie Cobern, co-owner of the Peculiar Drive In, a burger and pork tenderloin institution in Peculiar, Mo.
With an average lunch ticket price of $7, the drive-in doesn’t have many customers turning away because they can’t pay with credit or debit cards. “We keep our prices as low as possible to try and help out our community,” said Cobern, adding that handwriting tickets, honoring regulars and accepting only cash and checks add to the appeal of her company’s culture. Business is up 30 percent since she and her husband took it over from his mother last year. “If we were to accept credit cards, we would have to raise prices across the board to cover those fees,” Cobern said.
Calculating the fees isn’t easy. According to Jeff Shanahan, president of payment technology firm CardConnect, there are roughly 700 interchange levels that credit card companies use to determine what they charge when a card is swiped. The fees generally run 2 to 3 percent per swipe, but there are additional costs that banks, credit card companies and merchant service providers—the folks who are liaisons between the merchants and the banks—tack on.
“Besides the fee on every card swipe—it’s different depending on the type of card being used—there is a yearly fee just to use the [card processing] company,” said the owner of a small yarn shop 25 miles outside of San Francisco. “Then you can either buy or rent the credit card machine, there are access fees based on how many charges you have per company, and there’s a license fee that is only a small amount per month, but it adds up. They give you free paper for the machine but you pay for postage, which is more than the cost of buying paper at Costco.”
According to the National Retail Federation, merchants pay about $30 billion each year for debit and credit card purchases, most of which goes to the banks issuing the cards. “It always relates back to the fees,” said Shanahan. “You have to give up about 3 percent. If your margins are 4 to 5 percent, that’s a pretty large portion of your profits.”
The cost of remaining cash-only
Despite these costs, “as everyone becomes a lot more familiar with doing things on their phones, if the next store over offering the same set of products accepts electronic payments, then you’ll be losing business,” said Bhaskar Chakravorti, senior associate dean for international business and finance at Tufts’ Fletcher School and co-author of a recent study, “The Cost of Cash in the United States.”
New payment technologies like Square, Intuit’s GoPayment and PayPal Here—card readers and software that integrate with smartphones and tablets—make the switch to accepting electronic payments easier by eliminating most of the fees. Merchants pay one of two rates, either a per-swipe fee (2.75 percent for Square) or a monthly fee ($275 for Square). Joe Coffee’s Rubinstein says he saves 30 percent by using Square over the traditional credit card system he started with. To offset Square’s fees, he said, “we have to make 1 percent more [in sales].” So far, at the shops where credit card processing is new, “the last three weeks have been among the best weeks [in terms of sales] in history.”
Until a significant percentage of their customers demand to pay via mobile or credit cards, an acceptable substitute for many small companies is proximity to an ATM. For customers who arrive without cash, the staff at the Peculiar Drive In will start cooking their orders while they cross the street to take out money.
Scott Alderman, owner and captain of tour boat company Rusty Anchor in Mount Dora, Fla., will allow his customers without cash to take one of his two-hour tours and hit the ATM a few blocks away after the boat ride if time is tight. “I haven’t lost more than one or two customers a year because I don’t accept cards,” said Alderman, whose pontoon rides, located 20 miles northwest of Orlando, attract tourists looking for day trips.
Some companies just aren’t interested messing with the familiar flow of their cash-only system. For the one remaining cash-only Joe Coffee store in Grand Central Terminal, Rubinstein isn’t yet looking to add credit card readers.
“It’s our fastest shop—we do about 250 transactions an hour there and we have it down to a science,” he said. “Most customer are regulars; they’re holding their $2.25 in their right hand and loyalty punch cards in their left. If we try credit cards in there and it adds four seconds to the transaction, it will dramatically change our sales.” And not for the better, he said.
NEW YORK (TheStreet) – More and more small retailers are turning their Apple (AAPL – Get Report) iPads into cash registers through cloud-based software, which in turn is feeding into higher store sales.
According to the latest data from ShopKeep’s Small Business Insights Center, bricks-and-mortar businesses that use the company’s point-of-sale (POS) software, experienced 20% growth in same-store sales in the third quarter over the same quarter in 2012. Transaction numbers were up 13.6% year over year.
ShopKeep POS provides cloud-based point-of-sale software for retail shops and restaurants. The software allows retailers to set up registers in just a few minutes with the ability to accept cash or credit cards with their choice of processor, view real-time sales from their phone or Web browser and track inventory and staff.
The results are based on data from 556 customers that were using the ShopKeep software during both time periods.
As owners become more comfortable with cloud-based business management software, sales are benefiting. Mobile software allows for quicker and easier transactions for both customers and salespeople. Shop owners, through the use of data analytics, can better predict sales trends and make adjustments to inventory, for example.
Mobile payment companies, including Square and Intuit’s (INTU) GoPayment are also helping businesses accept credit card transactions quicker through card readers that attach to a mobile device. Last year, Square partnered with Starbucks (SBUX) to bring its services to 7,000 of the coffee chain’s locations.
ShopKeep says its customers are also typically younger, tech-savvy business owners.
“Our customers are typically new stores; a younger demographic and early adopters of technology,” says ShopKeep Founder and CEO Jason Richelson. “They are not afraid to try new things and embrace change, and you can see that reflected in their business performance. Retail technology is evolving incredibly quickly and those stores that are evolving with it are clearly seeing great results.”
The data also indicates a more positive outlook for fall retail sales and into the all-important holiday season, Richelson notes.
However, Richelson states small retailers “need to be smart about the promotions and products they push in order to make the most of the shorter retail holiday season this year.”
Large retailers for the most part have been slow to adapt mobile technology as part of their operations, but a few forward-thinking companies like Starbucks, Apple, Urban Outfitters(URBN) and Home Depot (HD) were early adopters of mobile payments technology.
More and more retailers are getting on board with technology. Traditional department stores such as J.C. Penney (JCP) and Nordstrom (JWN) have joined the ranks to equip sales employees with devices to shorten the checkout time. Retailers are also realizing further benefits such as “increased savings, sales and customer satisfaction,” according to an August 2013 article by Mobile Payments Today, citing a report by Yankee Group Technology Roadmap.
The survey data also highlighted markets including Portland, Chicago and Seattle emerging as rapid adopters of cloud-based POS. The three cities had the top sales growth percentages by city over 2012, while more established markets like Los Angeles and New York City experienced the highest overall sales by city, but lower growth rates, according to ShopKeep.
Brooklyn, N.Y., in particular, a city that had large early adoption rates of mobile POS systems, saw higher total revenues than Manhattan and Los Angeles, the data found.
By industry, quick-service restaurants had the highest overall sales via mobile technology, with mobile food trucks having the highest revenue increase during the third quarter.
Originally published on pointofsale.com.
ShopKeep POS, a cloud based iPad point of sale solution, today announced the hiring of two executives: Drew Schwartz as Vice President of Product Management and David Herzog as Director of Business Development for the Channel Business.
I spoke with Jason Richelson, Co-Founder and CEO of ShopKeep POS yesterday about the growth of his company. ShopKeep now boasts over 8,000 active users, up from 3,000 one year ago, an impressive growth rate. The company has 81 employees, Richelson told me, and is actively acquiring customers all over the United States and is beginning to get traction in Canada as well, although it supports only one tax rate in the system at the present time. The system is sold directly to end-users, also through the VAR (value added reseller) channel, and credit card processing vendors can make referrals as well.
I asked first what factors Richelson felt contributed to the success of the product; “having been a merchant” he replied, he could offer business owners a system that was totally engineered around their needs. Prior to starting ShopKeep, Richelson and a partner owned wine and grocery stores and other businesses that ran on server based POS systems. There he experienced numerous frustrations with that form of technology, which led him to design a system that could solve the problems he’d experienced. Development on the system began in 2008.
ShopKeep raised $2.2 million in 2011 from a group of NY venture capitalists, and another 10 million dolllars from Canaan Partners in New York City in 2012.
Richelson said that the company was planning to expand in a number of niches (vertical markets). He cited Hospitality as one of those segments, including full service restaurants and bars. There are fewer (cloud based iPad POS) players in those niches he felt, and it offers significant opportunities. Any segment where people “pay for something and then leave”, is a potential niche. ShopKeep claims to be the first cloud based iPad POS system, and mentioned a YouTube video of him demonstrating the system back in 2011.
There’s no question that this is an emerging year for cloud based iPad POS systems. As this niche begins to mature it shows all the signs of a platform gaining widespread acceptance among early mainstream buyers. Contributing to the growing sales of iPad systems, and something that poses a threat to traditional POS systems is the low cost of entry. When equipped with a cash drawer and receipt printer, iPad based POS systems are right around $1,000 per station to get up and running – about a third the cost of an average PC based system. When we compare the cost of a multi-user system which includes a server, then iPad based POS is even more cost effective.
Adding support to the concept that point of sale can be run on an iPad is the presence of a major company, NCR, who has its own solution known as NCR Silver.
For those buyers who want the leading edge, but not the bleeding edge of technology, all these factors maybe giving them the security they need to get in the water with iPad cloud based POS.
ShopKeep offers merchants a package that includes an APG cash drawer, Star Micronics receipt printer, credit card reader and iPad stand (choice of colors) for just $699. The company has other hardware bundles for Quick Service restaurants that includes a kitchen printer, and also a Retail bundle with bar code reader and printer. (click on the image for more info).
More about ShopKeep:
The system will work with any credit card processor according to Richelson, and cites that as being important to merchants – they are never locked into any one processor.
The monthly fee for a single user system is just $49 and that includes 7 day a week technical support, and product upgrades.
The system was recently in use at the Telluride Film Festival ; all payments at the festival in Colorado this year ran on ShopKeep, iPads and the cloud. 100 volunteer cashiers rang up 12,000 sales in four days, with 30 mins of training.
There is the capability for users to import and export their data.
A merchant can use his iPhone or Android phone to view sales data in real time no matter how many stores he has.
I asked Richelson about competition, and the fact that there were “low barriers to entry” for this industry, in that apps are relatively easy to create. His response was that any potential buyer should try calling the customer care desk of the POS provider they are considering and see how quickly their calls and issues get handled. ShopKeep is a service company he stressed, and that sets them apart.