Software as a Service (SaaS) has held the largest portion of the cloud market, and analysts expect it to grow at an 18.7 percent CAGR from 2022 to 2030. But point of sale (POS) SaaS is predicted to outpace the rest of SaaS sales, rising from $3 billion in 2021 at a 20 percent CAGR from 2022 to 2028.
While it’s a departure from license sales of the past, POS SaaS growth is good news for solutions providers who benefit from recurring revenue from subscriptions. Additionally, virtually all POS SaaS is cloud-based, so there’s no onsite installation or maintenance, which saves your team time.
If those benefits for solutions providers and a 20 percent CAGR seem too good to be true in markets where many businesses already use POS software, consider the reasons POS SaaS sales are on a growth trend:
Global Market Insights looks for online food ordering and delivery platforms to drive growth. Restaurants, online ordering platforms, and other players are implementing cloud-based solutions for greater scalability and flexibility. Similarly, MarketsandMarkets points to the growth of e-commerce as a market driver.
Ensuring items or stock is available is critical to maximizing revenues. POS SaaS solutions are accessible from any internet-connected device, enabling managers to access inventory, stock, and supplies anytime to ensure operations don’t run low and keep a close watch on shrinkage and waste.
Consumers expect store employees to have all the functionality they need wherever they’re working, such as at curbside pickup, in a food truck, in the aisles of a retail store, or at the counter. Many POS SaaS solutions can run on tablets and other mobile devices to give staff the freedom to serve customers efficiently anywhere.
Merchants that had on-premises POS systems when the COVID-19 pandemic began realized that they needed more agility to continue to do business during a crisis. Cloud-based solutions enabled teams to keep working together, even if they couldn’t be in the same store location.
Know – and Avoid – the Cons
Solutions providers can also count on the fact that the increased demand for POS SaaS will increase the demand for expertise. Choosing a POS system is a major decision for a merchant, and most will need your guidance to select the right one for their businesses. But your clients and prospects will also need your expertise to get the most value from their solution.
For example, cloud solutions are convenient and make accessing data easy from remote locations and mobile devices. However, network service disruptions may interfere with operations and good customer experiences. A hybrid POS solution with both cloud and local data may be the best option for your clients.
Also, the perfect solution may take combining POS SaaS with other solutions. You may find that a legacy system meets many of a client’s needs, and the best option is to complement it with a cloud-based POS application to add functionality. Or your client may benefit from a modular POS SaaS solution, adding the features necessary in a unique combination to optimize operations. And although POS SaaS solutions are generally easy to deploy, your clients may need your help to integrate the solution with other business applications and systems and enable print functionality for a seamless operation.
A major pitfall to avoid is leaving security gaps. Ensure your client understands the potential risks of using a SaaS solution and how to stay in compliance with Payment Card Industry (PCI) standards. Also, provide training that includes security best practices to ensure all staff know how to secure data.
What’s Your Next Move?
Solutions providers with clients using legacy systems without cloud capabilities may fall behind competitors with the agility, scalability, and functionality that POS SaaS offers. Start a conversation to see if your clients are candidates for a POS SaaS upgrade.