Retailers and other small merchants may be reluctant to trade in their cash registers for a full-fledged point of sale system, as long as the register is adequately performing its job of ringing up transactions. But for a business to grow in today’s environment, advanced technology has become a “must-have” for functions ranging from inventory control and labor management to collecting, and using, customer data.
Today’s POS systems combine the traditional functions of a cash register (conducting transactions and basic record-keeping) with links to, or integration with, these and other mission-critical systems. A point of sale system can improve customer service by speeding up checkouts and expanding payment options while streamlining operations by providing up-to-date reports and valuable analytical insights to the merchant.
The most immediate impact of upgrading to a point of sale system will be seen at checkout in the form of shorter (or non-existent) lines. Many POS systems feature integrated barcode scanning, which significantly speeds up transactions and eliminates human error from cashiers entering an incorrect price and/or item number.
Less visible (but no less important), integrated barcode scanning translates into far more accurate inventory data, since the POS system automatically records exactly which items are sold, when, and in what quantities. This allows guesswork about product ordering to be replaced with solid, reliable information and also makes it easier to predict future sales trends. Point of sale systems also simplifies the integration of sales data with back-office systems such as accounting. Merchants get greater accuracy with less time spent doing data entry or reconciling previously separate systems.
Point of sale systems further speed up transactions by allowing merchants to customize the cashier touchscreen, organizing products by category and creating “hot keys” for popular items or products that are frequently purchased together. In fact, some systems build in upselling and cross-selling prompts for such items. If these suggestions generate even a small percentage increase in average basket size, it can have a big impact on a retailer’s profitability.
POS systems also expand customer payment options. Rather than needing a separate terminal and phone line for processing credit cards, today’s POS systems incorporate card reading functionality. Merchants also save time reconciling these non-cash transactions, because they are all gathered together within a single system.
It’s also easier to add new payment methods, such as gift cards, as well as the EMV-compatible “smart chip” cards that are moving rapidly into the U.S. market. Merchants should investigate POS systems capable of accepting mobile payments, such as Apple Pay and those using NFC (Near Field Communication) technologies. The easier it is for customers to pay, the greater potential there is for a business to grow.
Another growth path smoothed with a point of sale system is CRM (Customer Relationship Management). CRM initiatives can range from simply gathering customer e-mails for future direct marketing efforts to creating a loyalty program that rewards frequent shoppers with points or special offers.
Because POS systems simplify and automate much of the data-gathering that feeds a CRM program, they can help these systems generate valuable analytics. Merchants tracking the key metrics of recency, frequency, and monetary value can identify their most loyal customers; those having the greatest impact at the point of sale; those most likely to return; and those that it’s not worth the effort to pursue. Such insights are absolutely essential for merchants to both retain their best customers and to reach new shoppers.
A POS system is certainly a major investment, but it’s one that, if chosen wisely, provides both immediate and long-term returns.