POS systems are a big part of the retail industry. But they are also a headache for store owners and managers, who have to deal with complex software that doesn’t work properly. Retail point of sale software has changed the way consumers shop. But businesses lose money when their POS systems are buggy, outdated, or difficult to use.
That’s why many end up abandoning complex retail POS systems in favor of simpler and more affordable software that actually works. But before that, as owners, we must know about POS because this system will be very useful for the progress of your business.
What is a Point of Sale (POS)?
A point of sale system or POS system is the combination of devices and software for recording financial transactions, capturing data on product inventory levels, controlling system access, compiling electronic reports, and other typical tasks associated with transaction processing. POS software may also have a system to capture payment processing using the Internet or mobile-based payment methods.
Some POS hardware devices are dedicated to the system, while others may be wholly owned by the store employees who use them. The system is tied together through an industry-standard computer language, database structure, and infrastructure that allows for integration with existing systems.
The importance of POS system in retail
Retail is the second largest employment industry in the world. There are more than 200 million people employed in retail worldwide. Retail sales are worth $4.87 trillion, which makes up 13% of global GDP. The retail market includes any trade that does not involve a face-to-face transaction with another person.
Some retail trade requires the physical retail space and transactions taking place in a store (including cashiers, clerks, and window displays) while other retail trade can happen online or over the phone.
The Retail POS system has revolutionized how retail businesses operate. POS systems use technology to capture financial data which allows retail entrepreneurs to improve customer service, increase sales and maximize retail profits.
Retail POS systems are built particularly for the demands of the retail sector and consumer behavior. Product costs, inventory, and sales are all tracked by retail POS systems. It keeps track of consumer purchasing patterns as well as product pricing comparisons.
Why do you need a Point of Sale system for your retail business?
Improve customer service. A POS system helps you know how much stuff you have and what customers buy. You can also see which products sell the best.
Increase retail sales. The Point of Sale system is a way to look at the data of your sales. You can make decisions based on it. Data is a tool that helps show information about retail store. This data can be used to help make improvements in the retail business.
Maximize retail profits. A retail POS system can be used to track retail sales data that includes inventory management, customer data, and payment processing. This information can be used to analyze and calculate reports for products, services, overall sales, and profit. With this information, business owner can better manage budgets, identify potential problems, and increase retail profits.
Modern POS Systems
POS software is an industry term for Point of Sale systems. Generally, when one talks about ‘POS’, they are referring to the retail POS. The POS software was designed for retailers to have an automated system at their brick-and-mortar stores to speed up the checkout process, increase accuracy and security, as well as reduce costs.
Here are some of the most common reasons why you need a modern POS system for your retail business.
1. Inventory Management
Increase inventory accuracy and reduce spoilage with a real-time view of your retail business’s inventory. With the right features, you can also monitor the volume of your supplies and avoid wastage.
2. Reliable Sales Data & Analytics
Through the use of a modern POS system, you will be able to access complete information about your business’s financial activity. This way, you can spot trends and make decisions based on real data. With the right features, you can also plan your retail business’ sales strategies based on what’s trending in your area.
3. Customer Relationship Management
The most efficient way to keep in touch with your customers is through a customer relationship management (CRM) feature. With the right features, you can also see your customer profiles and preferences to offer them better service.
4. Employee Management & Workflow
Employee management is very important for any retail store. A modern POS system allows you to keep track of your employees’ schedules, as well as monitor their performance. It can also guide them on how they can do a task most efficiently, reducing human error and increasing productivity.
5. Improved Security and Safety
With a modern POS system, you can protect your retail store data and assets by using an integrated security feature. It can also allow you to track the activities of your employees as well as manage access privileges.
6. Customer Management
You can create a personalized experience for your retail customers. You can use multimedia tools to offer them a more comprehensive view of your products. For instance, you can include product specifications in the point of sale system so customers know more about what they are buying.
7. Loyalty Programs
In this day and age, customers are more demanding. One way to retain your customers is by offering them a customer loyalty program through the point of sale system. This way, they can enjoy benefits and discounts when they buy from you more often.
What is a Mobile POS?
A mobile point of sale refers to a system that essentially uses a tablet as the main payment processing device. In this way, retailers can use one or more tablets as cash registers simply by plugging in an internet connection and wireless card.
In addition to being used as a cash register, these mobile POS systems also allow retailers to create customer profiles, which can be used for future offers and discounts. The systems are even capable of processing coupons and other loyalty programs.
Mobile POS systems have a number of advantages over traditional registers:
- They can provide real-time data about sales, inventory, pricing, etc.
- Data uploaded from mobile POS systems is accessible instantaneously, so the business owner can monitor sales and inventory at any time during the day.
- The data collected is comprehensive, accurate, and up-to-date.
- Data accuracy reduces labor costs by speeding up cashier transactions and minimizing human error, which slows down transaction speeds.
- Use of mobile POS systems reduces paperwork (and filing) for the merchant.
- They are able to process credit card transactions in addition to cash, checks, debit and EBT.
- These systems provide the ability to run reports on any set of data for more informed decision-making.
- The mobile POS systems integrate with existing business software through APIs or third-party plug-ins. This allows users to use their existing software for inventory management, customer relationship management, etc.
- Most mobile POS systems are compatible with major credit cards like VISA, MasterCard, and Discover, which eliminates unnecessary expenses associated with payment processing.
There are three types of mobile point of sale systems available on the market: tablet-based, mobile phone-based, and hybrid models. So a retailer has a variety of options to choose from.
How do POS Systems Work?
Point-of-sale systems are widely used in the retail industry to record data about sales. A POS system is a computerized system that tracks inventory, calculates taxes, and prints receipts for customers. The term “point of sale” refers to the place where payment takes place.
POS hardware usually include one or more computers that operate the browser-based software application. A POS hardware might include a computer, cash register, POS software, a printer, and a cash drawer. More complex systems might include multiple computers connected to a network, receipt printer, credit card reader, barcode scanner, etc.
In larger retail environments, it is common to have separate POS terminals for each department or individual store area with the ability to print reports from a central location in the building. Sometimes these terminals are wireless and can be operated anywhere in the store.
The POS software runs on a cloud-based POS system that is almost always accessed by an Ethernet connection, although Wi-Fi is becoming more common for this purpose. Sometimes there will be multiple Ethernet ports to accommodate wired Internet connections or to allow different devices (such as cash register or printers) to be connected via Ethernet.
The POS terminal primary function is to allow the cashier to ring up sales and perform other checkout tasks, such as voiding transactions or payment processing. Some systems are installed with a customer display screen at each register for use by customers waiting in line. This display shows information about products that are scanned or entered into the POS system at that register. There may also be a customer input keypad available on some systems.
The application is usually controlled by pressing buttons, touching an interactive screen (also known as a “touchscreen”), or even speaking aloud (for voice recognition systems). A cashier can enter sales transactions and process refunds using these methods. The system may also be integrated with a weight scale, barcode scanner, and credit card reader.
Different types of POS Systems
POS (Point of Sale) is a ticketing system used in all forms of sales and inventory retention. These can include keeping track of customers, products on hand, or the sale of items. POS systems are also sometimes referred to as cash registers.
POS systems can be divided into several different types.
POS software is a type of POS system that is run from a mobile device such as a tablet or a smartphone. This allows you to take orders and process payments in real-time.
Mobile POS Systems
A mobile POS system is a type of point-of-sale that has all the features and power of a traditional retail POS system but does not require any external hardware.
Touch-Screen POS Systems
Touch screen POS systems are retail-focused Points of Sale that interface with your PC for processing transactions. They feature oversized screens and embedded keyboards, making them easy to use in busy retail environments.
Cloud POS Systems
Cloud POS systems are a type of point-of-sale system that has all the features and power of a traditional retail POS system but does not require any hardware to process transactions.
Open Source POS Systems
An open-source POS system is a type of point-of-sale system that has all the features and power of a traditional retail POS system but does not require any external hardware. Users can download the system and install it for free, making it inexpensive to get started with POS software.
Multichannel POS Systems
Multichannel POS systems are a type of point of sale that allows you to run multiple sales channels from one central location.
Self-service Kiosk POS Systems
Self-service Kiosk POS systems are a type of point of sale that is set up to allow customers to purchase items or services for themselves. For example, a customer might want to purchase movie tickets or pay for the cleaning of their clothes.