Retailers Call for More Flexible, Secure POS

MICHAEL GARRY

NEW YORK — System flexibility and data security are two of the biggest challenges retailers are facing with their point-of-sale systems, according to two retailers and a wholesaler who participated in a recent webinar panel discussion hosted by SN here.

The lack of flexibility makes upgrades as well as integration with other systems difficult to implement, the panelists said. This in turn hampers retailers' ability to meet business objectives and to satisfy regulatory changes required for data security and flexible spending accounts.

“The way POS systems are architected today makes upgrades much more burdensome,” said Harrison Lewis, chief information officer for Haggen, a 16-store chain based in Bellingham, Wash. Lewis was one of the panelists in the webinar, called “Six Ways to Improve Your POS,” which was sponsored by Microsoft and took place on April 29.

But Lewis added that he expects a major POS software provider to step forward and “deliver a platform that allows for ease of integration, protects customer data and changes the checkout paradigm.” His ideal would be an architecture that includes service-oriented applications “that will give us the ability to respond quickly to business opportunities, regulatory changes and upgrades.”

Gary Hawkins, chief executive officer of Green Hills, a one-store operation in Syracuse, N.Y., and a customer loyalty consultant, said he found it difficult to extract data from POS systems for reporting or analysis. POS systems have “proprietary or difficult-to-read data formats,” he said. “It's been a challenge integrating POS systems and data with other third-party systems for as long as I can remember.”

Mike Brown, general manager, retail technology, Unified Grocers, Commerce, Calif., agreed that interoperability — ensuring that POS systems will work with third-party applications — is a challenge.

In the wake of the data security breach that took place at Hannaford Bros. in March, data security was another big issue on the minds of the panelists. Lewis criticized current POS systems for creating “transaction logs for every [POS] event,” generating too much data and “opening us up for opportunities where data could be misused.”

Tools are needed, Lewis said, that will determine “under what conditions we need transaction data, and for how long.” He called for “redundant data” that is stored in two or more places to be eliminated. “We need to store only that information that is really, truly necessary to support the business process,” he said.

Brown urged the credit card associations to make security improvements. “We could be helped tremendously if we could convince the card associations to support encryption from PIN pads all the way through the processing chain,” he said. That would address “one of the big loopholes,” he said.

Hawkins noted that retailers such as Hannaford Bros. were vulnerable despite complying with PCI (Payment Card Industry) data security standards. “I don't know that there can be a perfect solution,” he said.