A Point of Sale (or POS) system is essential for a business to run its operations smoothly. As its name suggests, a POS system allows companies to take payments from customers in bricks-and-mortar stores (or online) at the point of sale. They might not be hugely exciting, as far as business tech goes, but when used effectively they are capable of driving down cost and improving margins without sacrificing service levels. There’s tons to choose from, and in our roundup of the best Point of Sale systems, Shopify, Square and Vend topped our list of recommendations.
Though some businesses could get by without using a POS system, they would run the risk of missing out on critical data that helps save time and money. There are compliance-related benefits too; a savvy POS system ensures that businesses are compliant with payment regulations to avoid fines and other administrative costs (such as chargeback fraud), all while offering advanced security features that protect from data theft and cyber breaches.
Benefits to a POS
There are many other benefits to having a POS system, ranging from increasing productivity and reducing costs to streamlining operations; reducing human error; providing detailed sales reporting; and improving the overall customer experience. In choosing a POS system, you will need to consider upfront what specific features and customization options your business needs.
For example, retailers that sell electronic goods will need their products to contain serial numbers to identify models, makes, and specific items in stores. Clothes retailers, on the other hand, will need their products to have separate brand-specific SKUs. Due to the high associated costs of items, jewelry stores will have POS systems that specifically issue alerts for incorrect billing attempts. And for groceries, point-of-sale systems require goods to contain both sell-by dates and a unit of measurement in order to allow companies to sell items at a discount once.
Whatever you are processing, one of the big advantages to a POS system is the amount of time that you and your employees will get back. By opting for a system that has time management options, can promote autonomy in the workplace, allowing employees to thrive. This can be taken a step further by creating work schedules for individuals and teams.
Elements of a POS system
Modern POS systems have evolved from simple cash registers and can do much more than simple transactions. Effectively, they’re your business’s brain, capable of everything from tracking inventory to checking bills; managing loyalty programs; organizing customers and staff; calculating tax and printing and storing receipts. They are ubiquitous in many sectors – particularly hospitality, retail, and leisure – and come in different shapes and sizes depending on the needs of the business.
Some POS systems combine hardware (such as a server computer) and software in a single unit, whereas others separate the two by connecting a ‘dumb’ terminal to a server located either on-premise or in another building. For cloud-based POS systems, terminals connect directly to the internet to run software that updates automatically. Many are modular, allowing additional hardware units to be connected for displaying metrics such as order total and product weight. Others can scan barcodes, print receipts and handle security needs – for example, credit card processing systems designed for taking credit or debit card payments.
POS systems are also customizable on the software side, allowing businesses to manage membership programs and loyalty schemes to grant customers discounts on future purchases. Here, UX and design become critical to their effectiveness. Terminals in restaurants, for example, will prioritize usability and speed by featuring enlarged buttons on big and bright monitors to make it quick and easy for staff to book tables for customers in dark environments. Conversely, a handheld EPOS (Electronic Point of Sale) terminal on a market stand will be barely bigger than a credit card while featuring the ability to house a 4G SIM card for connecting directly to the internet to process payments online.
As mentioned, a POS system isn’t something that only allows you to conduct sales-related activity. It is a solution that can reduce reliance on manual processes, making it a vital tool in helping businesses to digitize their processes and reduce reliance on spreadsheets. Powerful POS solutions excel in providing real-time, actionable data that enables tasks to be undertaken efficiently and quickly.
This includes the ability to store information and build customer profiles to understand more about customers. This in turn leads to better marketing capabilities such as the ability to create customer groups – for example VIP shoppers – that can be targeted through direct marketing campaigns. At same time, POS systems allow you to find out about your own employees’ performance by letting customers tip your workers using pre-set percentages, which is especially useful for companies in the service industry.
And when it comes to reporting, POS systems can tell you when certain items are becoming more popular while helping you to ensure that you have a sufficient amount of them in your inventory. It can be achieved through digitised product catalogues in systems that track inventory and automatically updating quantities as buyers purchase them.
Whatever your reason for wanting a POS system, you should consider what your business requirements are before deciding what kind of solution fits your needs. To better make a decision, check out How to choose a POS and the 5 main features of a POS that you need to look out for.