Remember the last time you were in line at the store behind the guy who pulled out his checkbook? You thought, “Hmmm, what could I do to pass time while he writes this check? Read a book? Do my taxes?”
Today, the typical consumer expects to move at lightning speed and has zero tolerance for clunky transactions. Antiquated point-of-sale systems are kind of like that checkbook—they’re a show-stopper and they slow the speed of business.
These antiquated point-of-sale systems are kind of like that checkbook—they're show-stoppers, but for all the wrong reasons—and they slow the speed of business.
Modern-day point-of-sale (POS) systems contribute to the bottom line in ways that go far beyond the cash drawer. They combine hardware, software, and payment processing components to complete transactions instantly. But they do more than that. They can help you track inventory in real-time, build customer preference, and match the convenience of big-box stores.
Point-of-sale (POS) simply refers to the place where a customer pays for goods or services. The POS system refers to the hardware and software components that make that transaction possible.
Let's take a look at each of these components and how they can work as a smart system to drive retail growth.
Standalone POS software serves a singular purpose: to complete a transaction. It remains isolated from other business systems, so tasks like updating inventory or verifying pricing need to happen manually. As an example, you may need to export transactions from your POS software and then import them into another accounting or inventory system at the end of each day.
Integrated POS software, on the other hand, keeps all of your data and business functions connected and working from a single source of truth. Inventory, pricing, transactions, and customer data can work in concert to improve service and accuracy. Integrated systems connect the dots and merge all aspects of your business in real-time, even across multiple locations and eCommerce channels. Standalone systems are fine for getting started, but their drawbacks grow as your business needs grow.
The simple act of tapping a card or entering a PIN belies a lot of unseen complexity. Behind the scenes, a payment processing solution handles security, authorization, settlement, and reporting. The retailer pays a small fee for every transaction, and in return can expect a smooth, low-risk transaction. The right payment processing solution should work in lockstep with your POS and eCommerce systems. Costs should be low and predictable, and security should be a priority.
POS hardware includes the physical components responsible for the input and output of the sales transaction of the POS software at the point-of-purchase.
Modern computers incorporate user-friendly touchscreens. Handheld and mobile devices such as phones and tablets are being deployed by businesses of every industry. They’re portable, easy-to-use, and come at a lower cost. With a smaller footprint, they create a more inviting customer experience.
Also referred to as a barcode reader or POS scanner, this stationary or hand-held device is used to capture and feed product information into the POS system. New tech advancements now allow this technology via phones and mobile devices to benefit both the retailer and the customer.
Card readers are the primary hardware retail customers are used to interacting with. Recent improvements have made them smaller, faster, mobile, and often contactless.
Near field communication (NFC) payment solutions have seen significant growth in recent years. NFC payments such as Google or Apple Pay do not rely on Wi-Fi, incur any added cost, and are super fast.
According to Contrive Datum Insights (CDI), smartphone-based payments already make up more than 50% of the world’s revenue and this tap-and-go payment technology is prolific in the U.S. market. In February 2021, 85% of consumers (with smartphones and wearable technology) had already made a payment using their digital wallet or similar technology.
Traditional methods include a paper receipt generated by a dot-matrix, thermal, or inkjet printer. Technological advancements have made printers less clunky, wireless, portable, and with Bluetooth capabilities. Although the look of the receipt hasn’t changed much, modern POS software can enable businesses to personalize receipts based on specific customer information including rewards, recommendations, and offers. Some businesses offer a paperless receipt sent in the form of an email or text for further marketing.
Mobile solutions are moving the modern POS system out from behind the counter and making data available beyond the back office. Retailers and distributors are spending less time tied to a computer, and more time helping customers and acting on business insight.
Mobility is also expanding where and how retailers interact with their customers. Omnichannel retail is has become commonplace as retailers integrate their physical locations with online stores to meet new customer needs. Buy-online, pick up in-store (BOPIS) is seeing substantial growth as contactless options like curbside pickup are becoming essential.
A Forrester study found that 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience. Most businesses agree that there is nothing more important than the relationship they have with their customer. It is critical for companies to use software with CRM integration, including the following:
Marketing & Sales Integration - Sales and marketing departments work hand in hand to improve customer relations and sales. Find a software platform that allows them to easily share customer data and leads.
Buying History Integration- Real-time buyer insights and analytics including history, patterns, and preferences allow for highly targeted marketing and sales actions. Insights can be used to tailor email and social campaigns and more.
Customer Groups Integration - CRM integration for POS allows businesses to categorize customers in groups such as the highest prospective sale, most likely to return, and unlikely to purchase. Grouping customers helps businesses understand where and how to focus their time. Marketing messaging can be tailored to form targeted campaigns, reward clubs, and loyalty programs.
Quick Data Capture Integration - Businesses benefit from one single platform where real-time data is easily accessed and shared across departments and sites. Streamline and sync customer information including profile, purchases and returns. Give employees quick access to customer data so they can personalize the customer experience.
Artificial Intelligence (AI) is no longer new to the industry. According to a study by Capgemini Research, by 2018 over 40% of the top 100 retailers were using its power to streamline operations and build relationships with shoppers.
AI is a collection of data events and behavior by learning systems that are perceived by humans as intelligence. AI uses algorithms to carry out actions based on the collected data. POS systems with AI can do things like forecast demand and adjust inventory orders to keep up with sales.
Currently, retailers are focused on using AI predominantly in customer-facing areas of the value chain such as chatbots, product recommendations, and AI-powered sales support. However, they are starting to see the opportunities in operations including enabling self-checkout, in-store customer behavior analysis, pricing decisions, and sales forecasting. If you’re looking to invest in a POS system in 2020 or beyond, you’re right to make sure it is ready for AI.
To survive beyond 2020, it is imperative that retailers have a smart POS system with the Internet of Things (IoT). Between real-time customer expectations and retailers now competing with every other retailer around the globe, slow transactions from wired systems or WiFi aren’t cutting it. Cloud-based POS systems built with IoT, especially where using the latest connectivity such as 4G LTE, provide for real-time interactions.
Retailers are arming sales staff with mobile devices like tablets allowing employees to bring the POS system to the customer on the sales floor. POS software with IoT allows for instant inventory checks and sales without having to go to the register. IoT is making it easy to manage and monitor transactions from even the largest of retailers from a central location. And, it is far more secure.
2019 saw a huge jump in buy online, pickup in-store (BOPIS) sales. According to data from Adobe Analytics, BOPIS revenue for the holiday season grew 35% year over year. Overall eCommerce has grown by double-digit growth rates for the 10th consecutive year with 45% of those eCommerce sales attributed to mobile commerce.
In 2020 we have seen this trend intensify out of not only convenience but a necessity. According to Adobe Analytics, U.S. eCommerce daily average sales increased 49% from March 12 to April 11, 2020 and BOPIS sales increased 208% from April 1-20 compared with this same period in 2019.
Today, this exploding trend shows no sign of slowing down. Recent data suggests up to 67% of U.S. shoppers have used BOPIS within the past 6 months.
BOPIS has moved from a nice-to-have to a need-to-have. With an increasing demand for online and mobile shopping, modern retailers must accommodate shifting consumer behavior.
The “S” word; it's a loaded term interpreted differently by some, but incredibly important to all.
Newer POS systems offer security technology such as point-to-point encryption which makes in-store and eCommerce sales and returns completely secure.
When Zitomer Pharmacy had concerns about data breaches, they looked for a system that would address security for both back-end operations and front-end POS. They wanted to implement proper security at POS to limit price overrides and decrease return fraud as well as secure credit card transactions and personal information.
Zitomer deployed the Eagle POS system with point-to-point encryption including EMV (Europay, MasterCard, and Visa) security. “When we feel secure as a business, that trickles down to our customers,” said Frank Vella, Vice President of Zitomer Pharmacy. Zitomer's new POS system streamlined security so that the company can focus on growth initiatives.
With the massive amounts of data businesses need to manage, security is critical. Cloud-based solutions can reduce worry when it comes to viruses, malware, and security breaches. End-to-end encryption built into cloud-based systems is fail-safe, reliable, and prevents data loss from a power outage or POS hardware malfunction. With cloud POS systems, businesses can rest easy knowing their information will always be secure.
Let’s review how modern POS systems with smart software are improving businesses’ bottom line:
When looking for a POS system there are a few things you'll want to consider to ensure you're set up for success.
First, benchmark your business. Compare your own organization's operations, processes, and performance against others in your industry to better understand the strategies and tools required to improve processes.
Once you've established specific growth initiatives and strategies, research the software tools and capabilities necessary to accomplish those goals.
Then, seek out an experienced POS system provider that not only offers those tools but is well-versed in how it will interact with your current system. Look for on-premises and cloud solutions, and systems that can move from on-premises to the cloud.
Next, commit to investing in smart solutions that are scalable and adaptable to future tech advancements. Look to solutions that incorporate AI and IoT with easy-to-use software on all mobile devices and POS providers that offer hardware, software, payment processing, and all associated professional services. When you’re committed to meeting customer expectations to achieve growth, the decision to adopt a smart POS system should come easily.
