If we offered you one tool that could increase your store’s profits by 10, 15, or 20%, would you want it?
Of course you would! But here’s the thing. If you use a modern point of sale (POS) system, you already have this tool available. It’s your point of sale data, and it’s a goldmine of insights that’s just waiting to be discovered.
In this blog post, we’ll define point of sale data, the types of POS data you should look for, and why it’s important. Finally, we’ll show you how to use your valuable POS data to grow your business.
Point of sale data is all the information your POS system collects from transactions. Data from each transaction is categorized into five buckets:
How is data collected? It can be done passively through a POS system, where the customer isn’t required to take any action, and data is collected simultaneously to their transaction.
Active data collection occurs in e-commerce when you require a customer to take an action, such as fill out a registration form or answer a question (i.e., “How did you hear about us?”), as part of the checkout process.
Whether through active or passive means, point of sale data is incredibly valuable to all retailers, from small, single-location stores to multi-store retail operations.
With that in mind, let’s look at the various types of data your POS software collects and how you can use them to grow your business.
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Proper Inventory management is a necessity for any retail store. It can promote increased efficiency, cash flow, and accurate inventory forecasting.
But what can you do with inventory data? You can identify potentially profitable opportunities, but you need to dig a little deeper.
For example, what types of products are selling, how fast, in what colors, styles, flavors, or other variations? On the flip side of that, you need to know what products aren’t selling as fast, or at all. This data can help you adjust your stock to appropriately meet your customers’ demand.
How to put this POS data into practice:
Consumer contact information is incredibly useful and valuable. Customer email addresses and mobile phone numbers give you a way to market and communicate directly with existing customers. In fact, 61 percent of SMBs report that over half of their revenue comes from repeat customers.
However, some companies have abused the privilege of having a direct line to their customers’ phones and email inboxes. Therefore, using this type of data from your POS system should be careful and with good judgment.
How to put this POS data into practice:
Related: How to Increase Sales in Retail: The Top Promotional Tactics
Your POS system collects data every time a customer makes a purchase. With enough repeat purchases, you can get plenty of data to build a general picture of your customers.
How often do they make purchases?
What product or products do they purchase the most?
Do they stick to one price range, color, brand, etc.?
Customer order history helps you craft promotions, sales, and discounts that feel personalized. It’s what they want, according to Salesforce; 66 percent of consumers expect retailers to know and cater to their unique needs, and 52 percent expect all the offers they receive to be personalized.
When you combine customer order history with the ability to reach customers on their mobile phones or by email, you have a potent force for additional sales. Repeat sales and increasing average transaction amounts/order size are the results of smart segmentation using customer order history.
How to put this POS data into practice:
When are your busiest days of the week or times of the year?
Is your staff proficient at turning foot traffic into sales?
What percentage of sales come from in-store purchases vs. online?
What products sell more or less during certain times of the year?
Sales trends and patterns are a treasure trove of insights for staffing, marketing, inventory, and more. Plus, modern POS systems can use artificial intelligence to identify patterns, trends, and opportunities to help your business grow.
How to put this POS data into practice:
When an associate rings up sales on your POS system, those sales are logged under that associate’s record in the system. In some stores, cashiers may also ask “Did a staff member help you at all today?” to attribute sales to staff members.
This type of data is key to tracking the productivity of in-store staff to identify both high performers and those who may need additional training or mentoring to improve.
How to put this POS data into practice:
Does your point of sale system collect the inventory, sales, product, customer, and employee data you need to optimize your business? If not, you could be losing out on insights that can increase revenue and profitability.
Our retail POS software includes 55 pre-built reports vital to retail success right out of the box.
Schedule a demo today to see what POS data and other retail features our software provides that can help you grow your business.