POS: You Want Fries With That?

I sold myself to Jewel-Osco last week to save 50 cents on grapefruit. True story. I admit it. I joined the grocer's preferred-member club and told them everything they wanted to know: name, age, address, telephone number and driver's license info.

But worst of all, I enabled them to learn my deepest, darkest, most mortifying secret: I like fruitcake. Yes, something about that most-ridiculed of all desserts tantalizes my otherwise highly discriminating palate.

In the interest of keeping such embarrassing information private, I have resisted joining so-called loyalty clubs, instead relying on such stealth tactics as soliciting naive young checkout attendants to swipe their own member cards for me on the premise that I forgot mine or was just passing through town. But they soon started to catch on. "Hey, aren't you the woman who bought the fruitcake last week?"

However, if there's one thing I value as much as my privacy, it's my time, which led me to start frequenting the less crowded, speedier self-checkout lanes, only to watch the computer again and again ring up my on-sale items at full price. Caught between a rock and a hard place, I chose what seemed like the easiest solution: the loyalty club.

I'm certainly not the only one volunteering information about my shopping habits and using self-service systems in exchange for cost-savings and convenience, as retailers become more adept at extracting information from consumers and using it to provide value through loyalty programs.

In fact, revenue for self-service checkout technologies is expected to show a compound annual growth rate (CAGR) of nearly 20 percent, from $185 million in 2005 to $438 million in 2010, says research firm VDC. Revenue for traditional POS terminals and workstations, meanwhile, will continue to chug along at 4 percent growth to reach $1.3 billion in 2010, VDC says. As such, traditional POS-system vendors such as IBM and NCR are ramping up their self-service efforts and turning to the channel to help sell those systems to SMBs.

What's more, sales of all retail-automation technologies through the two-tier channel--via high-tech distributors such as Ingram Micro--are expected to grow at about twice the rate they will through other distribution models, VDC says.

Ingram is already capitalizing on this trend. In 2004, the company acquired Nimax, a distributor of AIDC/POS, bar code and wireless products, which now operates as a separate business, called the Ingram Micro Data Capture/POS Division. Ingram is now bundling POS products from that division with existing products from its broadline business in such areas as security and digital signage for VARs to resell. It's this type of one-stop shopping that has drawn some VARs to Ingram for POS solutions.

"Now I only have to call one phone number for PCs, printers and IBM POS--everything I need," says Art Julian, CEO of Custom Business Solutions (CBS), a VAR that specializes in selling POS solutions to the food-service industry. Its customers include small bars and big restaurant chains including The Cheesecake Factory and Fuddruckers. "As a result, my costs of doing business have dropped significantly because I have to deal with far fewer vendors."

NEXT: Ripe markets for VARs.