The Electronic Cash Register Innovation

What do daycare teachers and managers have in common? Both should learn storytelling. Stories represent a powerful tool to illustrate ideas, convince people and generate commitment. Below you will find the story of the cash register machine and NCR, the undiscussed leader in the manufacturing of mechanical cash registers during the 1960s. NCR was very good dealing with incremental innovations but as soon as a radical innovation appeared in the industry it started to struggle (click here to read the theory behind incremental and radical innovations).

Nowadays in most retail stores we have what is called Electronic Point of Sale (EPOS). Those are nothing more than an electronic cash register combined with a scan that reads bar codes on products when customer are checking out, providing a list of everything that the customer bought. Additionally they are used in the inventory management since they are usually connected to a central server.

Back in the 1960’s, however, mechanical cash registers were the standard, those machines required the sales clerk to push the buttons and compose individually the price of each product. They would not provide the customer with a list of everything they purchased and they would not allow managers to collect sales figures in real time. Overall we can say that the check out process was slower and less efficient. In the late 60s the idea of an electronic cash register started to ferment. NCR, who was the undiscussed leader in the production of mechanical cash registers, did not pay any attention to such innovation.

After all it contradicted their mindset. According to NCR’s culture success in the cash register industry was all about improving the mechanics behind their products, they knew how to get better but did not know how to get different. After some time NCR even started to get explicit customer requests, as one of them later said “we would go to them (NCR) and describe exactly the kind of computerized point-of-sales system that we needed. Their people would listen politely and tell us what a great machine the Class-V (NCR’s latest mechanical version) cash register was”.

Singer Sewing Machines was another customer looking for an electronic cash register. Singer tried to contact NCR as well, only to listen it was not “feasible”. After that Singer decided to give it a try and started producing electronic cash registers internally. In 1971, while NCR was still reluctant to jump into the new technology, Singer sealed a multi-billion dollar contract to supply electronic cash registers to Sears, by the time the largest retailer in the US.

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