What is the Benefit of a Point of Sale System?
Operating an independent hardware store that stocks roughly 20,000 items without the benefit of a point of sale system (POS) is like trying to bail out the Titanic with hand pump. Merchants will sink before they succeed. That’s why business experts say adopting the technology available in a point of sale system is so important for retailers today.
The average big-box store carries between 32,000 and 38,000 SKUs and stocks over 1 million items. Those stores and the companies that run them spend millions developing their own point of sale systems, rewards and credit programs and more.
Independent merchants can do business just as efficiently and effectively as the big chain stores, but on a more personal level, by enlisting the tools available in a comprehensive point of sale system and business management solution. The key benefit of a point of sale system is being able to keep track of products in real time rather than relying on a cash register and employees who like to count. Sophisticated point of sale systems manage both in-store and online sales transactions, customer relations through rewards programs and digital marketing, and they protect valuable data and records from fraudsters and hackers.
“While cash registers are pretty much large calculators, POS systems provide real-time inventory management, built-in loyalty options for customers, and can easily grow with a business.”Ramon Ray
Just as handwritten receipts and manual accounting practices gave way to mechanical and then electronic calculators, cash registers have given way to high-tech point of sale systems and digital business management solutions. The beauty of modern POS systems is that they make doing business easier by automating routine tasks such as recording daily sales receipts and tracking inventory prior to ordering more stock.
Applying the technological benefits of a point of sale system and business management solution saves time and merchants make more money, giving them more freedom to focus on their customers. Consolidating the collection and analysis of data from sales transactions through a POS allows businesses to increase efficiency. It also helps them achieve greater accuracy through detailed receipts, which makes inventory management a much easier task.
Intuitive point of sale systems should be easy to learn and simple to use. User-friendly POS systems allow sales associates and cashiers to master the platform in minutes, making transition, training and operations a breeze. Their interfaces are easy to read and understand for everyone, even those with little to no computer experience.
Technology Built for Your Business
The core function of a point of sale system is to streamline business operations. To do that, they utilize algorithms that analyze sales data and automate processes like supply chain, inventory control, customer management such as loyalty programs and marketing outreach, linking in-store and online sales, and back office operations.
One of the key features of a POS system is how it orders products from suppliers through electronic data interchange (EDI). This feature eliminates hours of item counting and price shopping and lowers a merchant’s inventory investment. Comprehensive systems offer multiple EDI connections which is a huge benefit to independent stores that use more than one supplier. Automating these routine and repetitive chores frees merchants up to spend more time with their customers.
Many POS systems offer software integrations that help merchants control profit margins, provide eCommerce platforms that link online and in-store sales, and simplify inventory management and marketing.
Software Advice, an online software recommendation service, points out that POS systems feature some emerging technologies that can help keep independent businesses competitive in the rapidly changing retail environment: mobile capabilities and customer loyalty management programs.
Mobile capabilities in a POS system helps retailers and their employees track sales, schedule deliveries and conduct transactions from remote locations. This technology also allows merchants to keep a real-time handle on their inventory levels.
Dan Nesmith, founder and president of Paladin Data Corporation which provides point of sale and digital business solutions, says increasing the bottom line is simple logic and mathematics. Retailers can either find ways to increase their margins or boost the number of their customers. Margins can only be raised so much before customers start looking for somewhere else to shop. So, increasing the numbers of loyal customers makes more sense and strong customer loyalty programs are key components of that effort.
All the big-box retailers and most of the major brands offer loyalty programs. For merchants without access to these programs, companies that provide point of sale systems and business management services offer solutions that give retailers the same customer loyalty program features as the chain stores.
Improve Customer Service
Customer service is always an overriding consideration when any business owner makes changes and a dynamic point of sale system can improve the shopping experience in many ways.
Shoppers today are banking on the ability to pay for in-store purchases in a variety of ways: cash, payment cards with magnetic information strips, microchipped EMV cards, and even with their smartphones through what are now called mobile wallets – apps that store their banking information.
According to a new study from U.K.-based Juniper Research, nearly 2.1 billion consumers worldwide will use a mobile wallet to make a payment in 2019. Just wave your phone at a point of sale terminal and head for the door. It doesn’t get much easier than that, which should appeal to customer-friendly merchants. PayPal, ApplePay and Google Pay are a few examples of these services, and it’s the latest step in the evolution of both money and how it is used in retail.
“It’s crucial for small retailers to keep their payment technology up to date both to ensure security and to let customers pay the way they want to pay,” explains Greg Burch, vice president of strategic initiatives U.S. with Ingenico Group, which makes payment terminal hardware for point of sale systems.
Business Insider calls the evolution of payment technology, which includes mobile wallets and touchless systems, the biggest single transformation in payment processing in retail history. The benefit of a point of sale system is that it can handle all that heavy lifting.
It’s Not as Hard as it Seems
If technology is intimidating, and it is for many people, merchants should consider that it’s a much safer move to get on the ship before it’s sailed. Technology is changing the way life is being lived, not just the way goods are being sold, and it’s not going to make a U-turn anytime soon.
There are business technology companies that make it easy for merchants to enjoy the benefits of a point of sale system. They work with a retailer’s suppliers to make sure inventory data is properly integrated into the system. They send knowledgeable representatives to train users on how the POS system works. And they provide ongoing round-the-clock support to make sure the new system works properly.
“POS systems can rejuvenate a business by eliminating and/or automating previously tedious tasks. This frees up users to spend more time training employees or interacting with customers and building relationships,” says Justin Guinn, of Software Advice.
Point of sale systems and their business management solutions aren’t cheap but upgrading to them will result in a relatively fast return on investment. They also save merchants both time, by eliminating repetitive processes, and money, by better managing inventory, employees and customers.