According to recent reports, 41% of consumers expect in-store sales associates to know about their previous purchases. As a retailer, you may be wondering how you can collect that kind of data and use it to make your in-store experience that much better. The answer lies with a sophisticated point of sale system (POS). A POS system makes it easy to track sales as they happen and can store information about customers to unlock your potential to provide a personalized experience.
Of course, this isn’t the only benefit a POS system provides. Modern hardware creates a seamless buying experience with a touchscreen interface and multiple payment options. And advanced software offers rich data collection to help you project sales numbers and track your inventory. So, how does a POS system work, and how can you choose the right one for your business?
How to Choose the Right POS System and the Importance of This Key Decision
First things first — what is a retail POS system? “POS” stands for point of sale. It is a combination of software and hardware used at retail locations to check out customers. A POS system is an innovative upgrade from a low-tech cash register. They often allow you to accept credit cards and touchless payment options. They also act as a critical data collection point. Your POS system can connect with other programs to help you track revenue, manage inventory and forecast sales. If you’re used to having crucial data from your online transactions, being able to collect it from face-to-face retail will fill in the gaps in your insights.
Why do you need a POS system? While the increased convenience to customers through more payment options and an intuitive interface is a game-changer, it’s real value is in the insights it offers. A point of sale system collects data on everything from sales and inventory to customer personalization insights. Because a POS enhances data collection and real-time inventory tracking, choosing the right one for your business needs is crucial. Many offer different reporting capabilities, and not all will work with your existing tech.
How a POS system works will depend on the particular hardware setup you choose. Some hardware can work better for the ways you do business. For example, curbside pickup services can benefit from a mobile POS device. An e-commerce store with occasional popup shops or event selling might only need a card swipe and chip reader connected to a tablet. A full retail business might consider a high-tech cash register with a barcode scanner and receipt printer.
With all the options and vendors available, how do you know what to look for in a POS system?
Analyze Your Tools in Existing Use and Integration Capabilities
How you choose a POS system will depend on the hardware and software tools you already have. If you have an online business venturing into a popup market or permanent storefront, you probably already have a lot of e-commerce tools. If you’re a brick-and-mortar retailer looking to improve processes, you need technology to enhance your existing hardware and software. Maybe you even have plans to venture into e-commerce. In that case, you’ll need to keep in mind the software you’ll need once you go digital.
Consider how your POS system can integrate with your current tools, and those you might need as you grow.
- Contact Management Software (CMS): POS systems often offer customers digital receipts. It can help your business go paperless while also gathering contact information on your customers. Receipt emails have a high open-rate, so they offer a valuable opportunity for cross-promotion. You can even send unique discounts to encourage customers to come back. Integrating brick-and-mortar sales with a CMS also allows you to integrate with e-commerce. You can gain insights into a customer’s online and offline purchases for more advanced personalization. With CMS integration, you’ll create better product suggestions and improve the shopping experience.
- Marketing software: Customer loyalty programs can be more effective when integrated with a POS system. Your POS software can track previous purchases and offer rewards without a punch card. It also allows you to take advantage of customer loyalty data. The right integrations can also enable your POS to display a customer’s purchase history to personalize their shopping experience.
- Accounting software: Since your POS system handles sales, it houses a wealth of financial data. While you can find data on sales, revenue and margins, you won’t have the features your finance team needs to track your assets and handle taxes. Most small and medium businesses handle accounting through software like QuickBooks. A retail POS system that can push your sales data to your accounting program will simplify the process.
- Inventory management software: A POS system can help you with inventory management. Whether you’re a single retail location or a complex business with digital and physical sales channels, an advanced understanding of your inventory is vital. With every product checked out, inventory management software will update your in-store availability. For retailers with an offsite warehouse, logistics managers can instantly see this information to anticipate restocks. Your inventory management software can provide low stock alerts and advanced features to streamline inventory tracking. With this technology, you’ll reduce the need for physical stock counts. Integration with a POS system is the last puzzle piece to provide real-time inventory tracking throughout the supply chain.
- Employee management software: Whether you own a small shop or 50 locations, sales directly impact your staffing needs. Sales data from your POS system broken down by week, time of day and location will help optimize scheduling. Your POS data linked to employee management data can also tell you who on your sales team has the best performance. See how each associate excels in different product categories, and who earns the most revenue.
- Existing POS hardware: What if you already have a receipt printer and a barcode reader at the register? Can your POS system integrate with your existing tools, or will you need to make a more significant investment? While there can be an advantage to upgrading all your POS hardware when you buy software, you may be able to use your existing equipment.
Whether a POS system is the last item you need to complete your system, or the first step towards modernizing, integrations with your existing and planned tools is vital. Look for quality services that can integrate with your tech rather than one system that does everything.
Consider Your Need for Customizability
Between your integrations with other software and all the things that make your business unique, an off-the-shelf POS system might not be enough. You may want a POS that allows your sales clerks to input serial numbers or asks customers for their phone number when they check out. Whatever the workflows you need for your business to run smoothly, your POS should offer it. And, they should fit right in with your existing software and hardware. If you have custom data points to collect at the POS, you want it to get automatically pushed into your connected software so you can draw insights from the information.
Keep in mind that how your business runs now may not be how it runs in the future. You might be around the corner from needing an e-commerce selling channel, adding new product categories or opening up a second location. Whatever your goals for growth, make sure your POS system can support them. Will you be able to add more employees or use the same software on several tablets simultaneously? Can you pull more advanced sales reports as you set new data-backed goals?
Your POS should be able to grow with you and tailor its offerings to your needs. The best businesses are always improving their workflows and processes. Your tech should make it easier to implement those improvements, not work against them. Your POS should also offer the ability to add on hardware as needed and provide a robust selection of POS devices so you can select the ones that fit your needs.
Another customization you might want is the ability to change pricing based around set circumstances. For example, you might offer discounts for a bundle of products or when purchased in a certain quantity. You might want to scan in coupons or offer discounts as part of a loyalty program. You might have lowered pricing across categories for a store-wide sale. Maybe a product is mislabeled, and your sales clerks need to be able to adjust the price during checkout quickly. Whatever the case, the ability to customize pricing around set circumstances is a crucial feature.
Outline Your Reporting Needs for Inventory Tracking
Automated inventory tracking will track sales and deliveries across all selling channels and send you low stock alerts. For many growing businesses, physical retail is just one cross-section of their inventory. Companies with an e-commerce arm need to see how brick-and-mortar sales impact inventory across the supply chain. If you’re primarily a storefront, you may soon expand to online markets or open more locations. In any case, as your business grows more complex, so do your inventory tracking needs. Continuing to track inventory manually is time-consuming and inaccurate. Many POS systems offer some of the functionality of an inventory management system. Even the best ones will have limited reporting capabilities unless they link to a full-featured inventory management software, like Finale Inventory. While a POS is great for tracking sales, it might not update as new deliveries arrive and cannot keep track of inventory as it moves from back-room storage to shelves. Still, it is probably the best way to update inventory counts as soon as items get sold. Since every company tracks inventory differently, the reporting tools you need from your POS will be unique. When considering how to integrate your POS with your inventory tracking workflow, decide what reports you need. Some of the inventory reports you might require include:
- Inventory reorders: Most merchandising inventory managers would appreciate a summary of what to order and how much. A POS system can provide those reports to your email or even right on the POS screen. They can update directly in your inventory management software, too.
- Inventory value: Many factors can influence the value of your unsold inventory, from storage costs to retail pricing and sales margins. Most POS can tell you the current value of your stock on hand, based on financial information alongside the length of time merchandise has been in the store.
- Real-time tracking: Most POS systems can show you what your stock counts are for any product in real time. Since it factors in each sale as it happens, it can be a vast improvement over monthly or weekly stock takes. A live stock count is a massive boon to customer service when a patron asks if a particular product is in stock. Even if a specific size or color is not on the sales floor, any employee can check if there’s one in the back room using the POS system.
- Returns: Some returns are in perfectly good condition, and can be placed on shelves. Others are broken and must be discounted from your available inventory. A smart POS system can allow employees to mark returns as an item going back on the shelf or not. It can give you an idea of your defect-related shrinkage while also updating your stock levels to reflect returned merchandise.
- “Dead” inventory: Without data, it can be hard to say with confidence which items aren’t selling. A POS system can notify you when merchandise isn’t moving. You can then put it on clearance or take other measures to try to move dead inventory.
All these reports can be enhanced when they integrate with your inventory management software. While a POS can track inventory levels in a particular location, an inventory tracking software can combine these with e-commerce sales and look at how inventory moves throughout the supply chain. If you’re a store merchandising manager, inventory management software can tell you how much is in stock at your nearest warehouse to assist your reordering decisions.
Find and Vet Your Options
After you define your needs, how can you choose a retail POS system that will work best for you? If you’re wondering where to start, look at the POS integrations your current system offers. Those integrations usually represent the most popular systems that will work best when paired with your existing technology. Then, it’s time to narrow down your options to find out which is the best POS system for your needs.
Once you select a few options that meet your requirements, look at software reviews from other businesses. As you parse through reviews, pay attention to retailers similar to yours. Those with comparable industries, sizes or growth trajectories to your company can offer unique insights. Many software review sites will also provide a quick overview of each platform for the sake of comparison. Read over the summary and get a feel for the strengths and weaknesses of each POS provider. Give weight to the ones that exhibit more of your “nice to have” features beyond your basic requirements. For example, ease of use can be a significant time-saver when it comes to implementation and staff training.
When you’ve thoroughly vetted each candidate, schedule a demo with each one you’re considering. While your demo is first a chance to see all the features and how they work in action for yourself, it’s also a chance to “interview” the company. Your POS provider should act as your partner. Be sure to ask about their customer support. Will you have an account representative you can come to with issues? What is their usual response time for calls and emails? Does the quality of customer support described seem consistent with what you read about in reviews?
Also, ask about the level of customization. If you have specific features in mind that you want a custom solution for, ask if it is within the software capability. Is it something you can program into your system yourself, or will you need to work with a developer to tailor the services to your needs? Find out how the company handles feature requests and suggestions from their customers.
Finally, remember that you’re always growing and improving your business. The features you need today might change from what you need a few years from now. Those technologies may not be on the market yet. The next innovation in payment or POS tech may be right around the corner. Hopefully, your provider will be able to offer it. Ask about the features they plan to roll out, and how often they update their software. It’s crucial that as your business scales, your POS partner scales, too.
Moving Forward With Your POS System and How Finale Inventory Can Help
At Finale Inventory, we understand how important it is to get an omnichannel view of your inventory. Having a POS system to round out the data from your e-commerce sales channels and warehouses is crucial. When our clients expand into retail or upgrade their existing POS, we know how critical making the right choice is. That’s why we offer integrations with many of the most popular POS providers, including:
For most of our POS vendors, integration with Finale Inventory is as simple as linking your accounts by providing your login credentials. Once you’re connected, it’s easy to collect the data you need. We can support multiple POS readers to help you track inventory separately across numerous stores. Our dynamic technology also offers product kitting, so when a bundled deal gets scanned into your POS, Finale Inventory will subtract inventory from each of the products composing the kit.
We understand how crucial it is to have the right technology for all your needs. So, we also offer custom integrations with many POS systems. If you’re still unsure what the right choice for you is, feel free to contact us with your questions. As inventory management experts, we can give you recommendations on which systems can provide you with the most useful inventory tracking data and help you select a system personalized to your business needs. We’re also happy to teach you how to integrate with your POS system.
Contact Us for a Free Trial or Real-Time Demo
If you’re in the market for a POS system, congratulations! Whether your retail business is just taking off or getting an upgrade, investing in a POS system is a sign of growth. Whether your business was born online or in a brick-and-mortar store, adding sales channels can call for better technology. Once you start adding store locations or growing into online selling, your inventory tracking needs get more complicated.
While your in-store POS system can help you track inventory on an individual level, many small to medium businesses operate warehouses that deliver to both e-commerce customers and retail locations. Finale Inventory can help you track your inventory from when it is delivered to your warehouse to when it arrives on shelves. When your inventory tracking system integrates with both POS systems and e-commerce selling channels, your stock levels across locations will update whenever and wherever you make a sale. Our integrated inventory control technology can help you prevent overselling and underselling and significantly reduce your need for safety stock.