Point-of-sale (POS) efficiencies and total cost of ownership are increasingly becoming the focus of cost-conscious retailers, according to a recent study from the Aberdeen Group.

“Top-performing retailers are establishing highly specific implementations cost criteria plans, as well as short- and long-term benefit lifespan analysis when managing the technology supplier selection process,” said Sahir Anand, chief author and retail research director at Boston-based Aberdeen. “Besides rapid configuration and integration with other systems, one of the ways to justify continued spend on POS is to convert it into a marketing tool that increases customer traffic into stores.”

According to the report, “POS to Profits: Reviving Best-in-Class Sales and Service in Retail Stores,” 73 percent of retailers rate themselves below, or at best sub-par, on their current point-of-service or POS capabilities. The research from Aberdeen, a Harte-Hanks Co., details the business benefits derived from upgraded POS performance and cost optimization.”

According to Aberdeen data, as a means to augment POS performance with an eye on costs, the industry’s top-performing retailers are more than twice as likely as all others to consider modular improvements, deployment, and ongoing service costs as key criteria for POS upgrades. In addition, the growing list of options to upgrade POS operations, such as data management, help desk support, feedback management, rapid response and ongoing software management, top-performing retailers seek to understand how these capability upgrades will benefit the organization, both currently or in three, five or 10 years.

The study found that 66 percent of top-performing retailers are focusing on the POS as a marketing tool to justify the TCO behind the next phase of technology improvements. To achieve this objective, Aberdeen has found that these retailers are negotiating two major challenges. First, these companies overcome the hurdle of developing an internal mandate and agreement among teams involving store operations, marketing, merchandising and IT, so as to enable such improvements in a rapid manner. Second, any modular improvement at the POS must guarantee secure corresponding data management processes.

“These challenges notwithstanding, converting POS into an effective consumer marketing tool at an affordable cost that continues to provide a sustained level of customer focus is a dream come true for any c-level executive in retail,” says Greg Belkin, co-author and research analyst at Aberdeen.

The report underwritten by eSENSE Retail, K3 Retail, and Epicor, is available free at http://www.aberdeen.com/link/sponsor.asp?cid=5890