What is a Point of Sale System?
Point of sale (POS) has evolved significantly in the last decade. While retail technology in the past was used primarily to handle transactions, retail POS software today is much more robust and can improve nearly every area of business.
Comprised of both hardware and software elements, today’s retail POS systems still take transactions, while also providing owners and managers with necessary tools to improve profits and simplify business processes.
How Retail POS Software Works
While hardware may be the “brawn” of the operation, retail POS software is the “brain.” POS hardware, such as the POS terminals themselves, scales, scanners, receipt printers, and the like are relatively useless without the software to control these elements and apply them to business functions. Retail POS software serves as the hub of your store.
There are three main ways in which this retail technology is deployed:
Cloud-based retail technology stores important business data on the cloud, while on-premises stores data locally. Each kind has its own advantages and disadvantages, but hybrid solutions combine the best of both. With hybrid retail POS software, you can still operate normally in the event of an internet outage, but once internet is restored, data is backed up on the cloud for safekeeping.
Why POS Software?
Many fledgling businesses may not have a POS system at first, or they aren’t aware of how to fully utilize their retail technology to the best of its abilities. Some older businesses may not realize that implementing new POS software can be done easily and affordably.
Most successful businesses today understand the value of robust retail POS software. Carefully-developed features and functions allow businesses to accomplish many goals and overcome a wide array of obstacles, such as:
- Saving time by streamlining operations
- Increasing productivity by automating routine tasks
- Providing greater visibility by generating detailed reports
- Eliminating errors by reducing the need for manual entries/calculations
- Maximizing ROI through time-saving functions and automation
- Improving the customer experience by giving more time for staff to focus on customers
- Preventing loss through accurately forecasting labor and inventory needs
What to Look for When Choosing a POS System
Total Cost of Ownership of a POS System
When you purchase retail POS software for your store, you are making an investment into the future of your business, so it’s advisable to make sure you know exactly what you’re paying for, and select the system that will be most advantageous to your individual business.
Though necessary to business, choosing a POS system can be tricky. The sticker price may say one thing, but when you look closely at the contract, there could be a number of hidden costs and fees associated with the purchase. Make sure your provider is up-front about the total cost of the retail technology they provide. Look at how the contract is structured. If there is anything you don’t fully understand, ask the provider to clarify.
Look for a provider that offers software as well as support. The last thing you want for your business is to make a large investment and have no direction on how to use or maintain it. The best providers will offer installation, setup, training, and ongoing support after you’ve purchased your retail POS software.
Inventory itself is the largest cost for most retailers, and is worth paying close attention to. Manage your inventory well, and you can grow your bottom line. Manage it poorly and you could end up dealing with shrinkage.
Retail POS software can offer many advantages to retail businesses by carefully tracking stock and sales, and accurately forecasting inventory needs. The data gleaned from your point of sale can be instrumental in helping you keep track of your stock and prevent out-of-stocks, as well as over-ordering.
Incorporating a robust inventory management solution is also critical to ensuring you can effectively provide your employees and your customers access to real-time data about your products. Your team cannot effectively cross-sell without knowing exactly what is in stock. Similarly, it does no good to offer e-commerce if seemingly available products are purchased online but can’t actually ship because stock has been depleted. With the right inventory management solution, you can also utilize multi-pricing levels, or mix-and-match pricing, which is especially effective when you want to run promotions.
One of the best advantages comes from its ability to reduce waste and loss. Whether your goal is to identify areas of shrinkage, or protect yourself against theft, it is important that you have access to a robust inventory solution.
Next to inventory, labor is a retailer’s biggest expense. Retail POS software assists owners and operators by providing a variety of labor-management features, such as web-based time and attendance tracking, and easy reporting.
With the right tools, business owners can break free of manual processes and implement automated ones that help handle the day-to-day. When it comes to onboarding, choose a retail POS solution that includes features for automatic tax filing and payments, calculating hours worked, and ensuring labor law compliance.
Additionally, retail POS software can provide detailed reports that help with forecasting labor needs, managing schedules, analyzing productivity, and reviewing attendance. These features in particular are critical to ensuring your scheduling is optimized to cover your needs and keep your business at optimal efficiency.
Now that omnichannel retail is necessary to stay competitive, retail POS software has proven invaluable to helping stores manage multiple channels of business.
Customers prefer to have a variety of options for how they can purchase products. Models like buy online/pick up in-store have been incredibly popular lately, but the added options can result in added complications, especially when it comes to inventory tracking.
Managing all these functions separately can lead to errors and decreased productivity. It’s important that you are able to integrate technology variety of ancillary applications into your retail POS software, so you can manage each offering from a single interface.
Data is an incredibly powerful tool when utilized correctly. The right retail POS software provides detailed analytics for virtually every area of business. Customer data, behavioral trends, labor reporting, and inventory analysis are just a few things that are easily tracked and reported on via your POS.
This data provides greater visibility into operations, so you can identify areas that may need improvement, and predict the success of sales. This information also helps you increase customer loyalty, run more effective promotions, and improve your ordering process.
The best business decisions are the most informed business decisions, driven by concrete data and careful analysis. When applied correctly, data garnered from your point of sale can greatly improve your bottom line.
It’s important that your store is capable of accepting each customer’s preferred method of payment, so you will need to carefully select a payment processing partner, and have retail POS software capable of integrating credit, debit, and FSA payment processing.
Near field communication (NFC) payment methods like mobile wallets are increasingly popular with customers. Many view it as safer and more convenient to keep information on their phone, which is capable of being tracked and recovered, than keeping cards on them in a wallet, which can be easily lost or stolen.
It’s also critical to ensure your card readers are EMV-compliant, so you can safeguard yourself against credit card fraud.
Your retail technology must be PCI-compliant, which means you’ll have to take steps to ensure that your credit card processing, data storage and transmission of data are aligned with the mandates required by the Payment Card Industry Data Security Standard (PCI DSS). Retailers can minimize the chances and costs of a data breach by knowing what data is collected by their retail POS software, and how this data is transmitted, and take appropriate measures to prevent a breach, such as educating employees on how to identify suspicious activity, encrypting data, and monitoring vulnerable transactions.
Unified POS and Back Office Management System
Operating a retail environment is much more complex than what customers may see. Behind the scenes, there exist a number of back office processes that contribute to store operations. Many of these processes and back office systems rely on data that is captured within the point of sale, so when both systems are unified, your business saves time and has better visibility.
Look for a POS solution that combines both sales floor and back office functions, so that you can keep all important data in the same place and can utilize it across different operations. Managing all of your operations through the same interface saves time and reduces errors.
Scalable Software to Grow With Your Business
Many retailers make the mistake of purchasing the most affordable POS technology that can suit their needs in the present, without accounting for any potential growth. The best retail POS software will be scalable and flexible, so it can expand with your business to support its growth, instead of hindering it.
Choose a POS that can adequately address all of your needs for your single-store operation in the present, but make sure that whatever retail technology you invest in can accommodate multi-store operations as you grow.
POS Customer Service and Support
Service and support are critical to take into consideration while deciding which retail POS software is best. When discussing your needs with providers, make sure they are clear on how their support is offered, by whom the support is offered, and when it is offered.
High-integrity providers will give you access to a qualified team of support specialists that understand the technology, as well as how it applies to your industry. Because technology can malfunction outside of normal business hours, support should be offered 24/7, 365 days a year so you can keep operations running smoothly in the event of an issue while minimizing downtime.
Improving the Customer Experience with Point of Sale Software
Retail technology is adept at improving operational efficiency, but the best retail point of sale software is made to improve the customer experience as well. This includes a wide range of functions that help store associates provide fast and accurate information to customers, operate multiple channels, and free up time. Additionally, POS retail technology can make it easier to upsell or cross-sell to customers, which increases revenue.
Managing your customer base is an important aspect of retail operations. It helps you understand what customers want most, how to engage them, and how to keep customers coming back.
With your retail POS software, you can collect data on purchases that customers make. By analyzing trends in purchasing behavior, you can increase both online sales and in-store foot traffic by effectively communicating targeted promotions and messages to your customer base.
Retail Gift Card Programs
Gift card programs can provide valuable revenue streams for retailers, and can increase your customer base. Now that retail technology is evolving, easy gift card program management is possible with retail POS software.
When they have gift cards, shoppers are likely to spend more than the value of the gift card itself, and will purchase more items, or make more expensive purchases than they normally would without a gift card. Unlike other promotional methods, purchased gift cards provide revenue even when they aren’t redeemed by the recipient, and apart from the cost of the actual card, that revenue is a 100% profit.
Marketing your gift card program is also accomplished easily through your retail POS software. Many come with marketing assistance and automation, so that you can build your brand and expand your customer base without spending too much valuable time.
Retail Loyalty Programs
Acquiring new customers through marketing or gift card programs is important, but retaining customers is even more so. Successful retailers know that one of the best ways to keep profits high is to reward loyal customers and build positive relationships with them.
Retail technology can help you run an effective loyalty program. By rewarding customers for repeat business, you encourage them to continue coming back. You can also offer personalized promotions based on purchasing patterns that prompt them to return to your store and redeem offers on coveted items.
Incentivize customers to return by issuing coupons at checkout, or for an even more effective solution, offer rewards points on purchases. Often, customers can justify larger purchases knowing they will be rewarded with points towards their next purchase. When they redeem those points, they are likely to purchase more than they normally would, because they benefit from the added savings the points can provide.
The Business of Retail Technology
Buying Retail Technology
Look for a retail POS provider who has proven success in your vertical. These providers are very familiar with the challenges you face, and have a history of helping retailers like you address the same needs.
Still hesitant about shouldering the up-front cost? Try looking for a retailer who offers the software-as-a-service (SaaS) model. With this, you can get all the hardware, software, and auxiliary solutions you need on a fixed monthly fee.
Purchasing and implementing retail technology is an involved process, but with the right information, it can be relatively painless. For more information on how retail POS software can benefit your business, find a Dealer today.