Why did Square reduce the price of its Square Stand by 75%?

Sales 101: If A Product Is Selling Well, Never Lower The Price

I presented the challenges Square faces with the Square Stand on September 1, 2013 here on Quora. I tried my best to state the case of the Practical and Pragmatic merchant and how this may very well doom the Square Stand.

I was asked to answer this question privately by a good friend that works at Square. Here is an excerpt of what I wrote in September, 2013:

In 2013 Cash Registers Still Out Number POS Systems 1000 to 1 At Small And Medium Businesses

Almost 25 years ago I was excited to sell what I thought would be the most revolutionary thing small and medium sized merchants could ever want, a computer set up as a full Point Of Sale system with an integrated credit card processing system. It had features that any small business would hope to ever want or need. I was absolutely convinced that the ugly and old cash registers and credit card machines would disappear the moment any merchant could see just how useful this system would be. This was the flash point of my education.

One only needs to visit the majority of the 25 million small merchants to see how successful I and about 1,000 other companies were in persuading these merchants to move to a POS system over the decades.

The Highest Adoption Of POS Systems: Restaurants

The only significant in roads has been in restaurants. It took the better part of 30 years for any POS company to beat the old cash register at small and medium, non chain restaurants. The very nature of how a restaurant uses a POS system has motivated higher adoption rates. Even so, over 20% still use the most basic cash register systems.

Chart showing the relative market share of the major POS companies in small and medium sized restaurants.

The Practical And Pragmatic Merchant

I have just presented an overview of the empirical facts. So how is one to resolve this rather startling situation. Great technology is all around these merchants for decades but there has been only single digit desire (outside of restaurants) to replace the simple cash register.

The Square Register app has been available since May, 2011 and almost three year later, the Practical and Pragmatic merchant has failed to respond to the prod ...


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