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Revel Systems looks to outfit the iGrocery store

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iPads are making their way into the cockpit, doctors’ offices, the pulpit, coffee shops and more. On Tuesday, cloud-based cash register service Revel Systems is adding another location to the list: the grocery store. The San Francisco-based company has outfitted 400 fast-food chains, cafes and retail stores with its iPad(s AAPL) point-of-sale system, but is now attempting to crack grocery retail.

A barista taking your coffee preference via an iPad isn’t new. But the simplicity of touch-screen based checkout systems could be a major revelation for grocery owners used to paying tens of thousands of dollars for point of sale (POS) systems and the required training for them. So far, just a small chain in Pittsburgh, Pa. called Marty’s Market has Revel’s iPads installed on all five checkout lanes. But the company is expecting many more stores to get on board because of its pricing and the familiarity of the iPad.

Revel’s iPad system for grocery stores costs $2,000 per software license — one for each grocery checkout lane — and a $100 service fee per month per license. In return, stores get Revel’s cloud-based grocery inventory and payment system. On top of that, a store can also order accessories — iPads, scanners, scales, coin dispensers, receipt printers, and more. The “iGrocery store” concept isn’t just referring to an iPad — Revel also sells an iPod touch that integrates with its system so employees can scan items when ordering new products.

Shoppers can pay with standard methods — cards, cash, coupons, EDT (food stamps) — but also with services from mobile payment startups Dwolla and LevelUp, which let users make a quick transaction via a smartphone. There’s also a “kiosk mode” that can turn the iPad registers into self-checkout stands.

Cracking the grocery business

There are a couple reasons Revel thinks its solution stands a chance of cracking the grocery business. First, grocery POS systems haven’t changed much in about 20 years, and NCR, the cash register behemoth, can charge multiple thousands of dollars for the systems and their upkeep, Revel points out. Second, those systems are often complicated and require weeks of training for new checkers, and third, Revel thinks the iPad’s ease of use makes it a natural cash register.

“If you try to [install] a point of sale system you’re talking like two weeks of employee training, but with iPad … you walk right up to it and, within a couple minutes you’re running orders,” co-founder and CTO Chris Ciabarra said in an interview Monday. “That’s a huge selling point when I go out and pitch companies.”

Grocery employees can come and go, and employers have to spend money and time to train new people each time they’re hired, he said.

Apple’s sold 85 million iPads to date, but it’s the 400 million iPad, iPhone and iPad touch sales combined that make it pretty hard to find potential U.S. grocery store employees that aren’t at least familiar with Apple’s touchscreen devices.

Moving up to grocery stores is a pretty big step for two-year-old Revel Systems because installing cash registers at a grocery store isn’t as similar as you might think to restaurants. The company had to seriously beef up its software’s capability.

“The load of groceries is a lot more, there are a lot more SKU numbers, some have over 10,000 SKUs, other systems [like restaurants] have like 300,” said Ciabarra. “The database is a key thing” because it has to handle so many networks (EDT, coupons, etc.).

Getting into an entrenched market like the cash registers business is going to be tough. But Revel Systems isn’t starting from scratch. The cloud and mobile are going to continue to disrupt payment systems, and Revel already has its foot in the door. It needs to get a national chain to buy into its system, but that’s obviously easier said than done.

7 Responses to “Revel Systems looks to outfit the iGrocery store”

  1. Great article!

    However, in all fairness I think it would be good to inform readers of the cost of the hardware, $5510 per lane, and the service contract fees of $1000 per year for phone support during business hours only. If you want 24/7 support you will need to pay $2000 per year.

    Hardware included, it looks as if the total cost for a lane (and 1 year of 24/7 support) is approximately $9,200. Extrapolate that over 5 years and you are looking at approximately $22,000 per lane. Not to mention install/training fees.

    This does not seem so far off from traditional point of sale setups that provide, from what I can tell, a greater selection of features, peripherals and warehouse integration modules.

    This iPad stuff actually looks to cost a whole lot more over the long-term.

    • Where do you learn your math at? I have saved thousands of dollars using the Revel POS system. Oh and i don’t know where you get your fees from? as their support only costs me 40 dollar a month in all fairness you need to get the correct information.

      • Sorry Mario. My figures were a tad off in the comment above. But I still think this type of system ends up looking cheaper in the beginning and costs more over the long-term. Seeing as how Revel has only been in business for slightly over 2 years, I would doubt anyone has seen these long-term costs actually leave their pockets yet.

        Let me update my figures with costs from their website and try to show the total cost of a one lane setup and eventually show that cost over 5 years.

        For a grocery system (1 terminal) via the information on their website.

        Super Market and Grocery POS Hardware Bundle – $5,510

        iPad POS Super Market Software – $2000

        Install – $250 (Geek squad install)

        Now let’s say we want more than just the free email only support listed on their website and choose to have 24/7 phone support. According to their website that is an annual charge of $2000.

        So one a one lane setup using the grocery pos hardware bundle and grocery software license for one iPad plus installation and 1 year of 24/7 phone support comes out to be $9760.

        So to get the cost of a one lane setup over the course of 5 years I took $9760 (the cost of hardware, software, install and phone support for one year) and added 4 years of 24/7 support at a cost of $2000 per year. This comes out to $8000 in phone support over 4 years. So our end figure for 5 years would be $9760 + $8000 = $17760

        I just don’t see the long term savings. In fact it really appears to end up costing more. Most groceries don’t have just one lane.

        So a 4 lane setup (after 5 years of support) is around $47,800? How is that cheaper than other traditional point of sale systems?