Comprehensive and Multi-functional POS Systems Increasingly Used in Retail Petroleum Industry

Frost: An emerging trend in the retail petroleum industry is the growing entry of retail outlets such as supermarkets, large discount stores, and mass merchandisers that are implementing fuel dispensers in their parking lots to provide added value and convenience to their customers.

Hypermarkets that have ventured into the retail petroleum business, have met with considerable success due to competitive fuel pricing, discounted prices linked to loyalty programs and cross-merchandising. This has created a rapidly developing segment for point-of-sale (POS) terminal manufacturers and they need to act fast to capitalize on the many growth opportunities available in this area.

Bigger terminal manufacturers with strong global presence are moving beyond mere payment terminals to provide highly comprehensive solutions for the retail petroleum industry. These solutions address both hardware and software aspects as well as meet customers’ expectations by being a one-stop source for the value-added applications that retailers demand such as loyalty programs, gift cards, in-store management and Internet connectivity.

With access to considerable financial and human resources, these companies are able to provide globally acceptable solutions. Moreover, they have well-established infrastructure and universal presence, which helps them render superior service as well as provide critical insights into local market dynamics.

However, despite the multi-application and value-added functionalities of POS terminals, many retailers in regions such as Asia and Latin America remain largely unaware of these benefits. Although POS systems are instrumental in improving merchandising, inventory control, and bottom-line growth, several fuel station operators believe that they are not crucial enough to warrant upgrades of existing equipment or installation of new terminals. This is particularly true in Asia and Latin America, which have traditionally exhibited less demand for store automation.

Owners of convenience stores are unclear about the level of automation they require and tend to focus on price points, explains Aravindh. Given that they are inconsistent in their definitions of automation, there is an urgent need to educate end users about latest technologies and how they can help retailers achieve strong differentiation.

Since price is such an important consideration for retailers, companies could consider offering options in hardware and software. This would require market participants to design the terminals in such a way that they incorporate both open architecture and modularity. This is likely to expand the potential customer base to include especially those retailers that are not particular about advanced technology, but prefer simple value-based devices.

As POS terminal manufacturers continue to offer greater functionality at the point of sale, fuel station and convenience store operators are bound to benefit from their enhanced value proposition. Combined with increased awareness about the latest technologies and multi-application capabilities of these terminals, this is likely to reduce the focus on price and instead attract more investments in terminal purchases.

Payment Systems in the Petroleum Market Publ 20060614