Are you a retail business who is overlooking the importance of technology for managing your retail business?
You might face the same fate as Kodak, which failed to change with the evolution of technology.
A retail business that overlooks a point-of-sale system is likely to be left behind in the era of printed receipts and late-night inventory checks.
But, what is a POS system?
POS combines hardware and software that a business uses to centralize its operations. In simple words, it refers to the point where sales happen. Some experts call POS a high-powered and high-end version of a cash register.
Whether you run a small retail store or own a lavish chain of retail stores, an investment in a POS system could be your best bet for your business.
Let’s explore why retail stores can no longer ignore the worth of a POS system.
8 Reasons why a POS is essential for a retail store
Here are eight reasons why a POS is essential and how it affect the day-to-day operations of a retail store:
1. Ensures better inventory management
Traditionally, when managing a retail store’s inventory, there were three things to consider:
- Knowing the quantity of each product
- Knowing how much you sold or moved
- Knowing how much you require
While these three aspects seem simple, they required a lot of counting and were prone to numerous errors. That’s where a POS system comes in and removes the guesswork from inventory management.
The system allows you to manage and keep track of your inventory and understand the quantity of products you currently have in your retail store. With a POS system, all a business does is scan the barcode, enter the quantity of products and specify their price. It’s a one-time affair, and the POS system keeps track of all units you sell.
Interestingly, it enables you to create purchase orders and keep a count of the inventory in hand.
With a POS, it doesn’t matter whether you have one SKU or thousands because it takes care of everything.
Pro-tip:Â A POS software even warns you when your stock is running out so that your store is never short of products.
2. Simplifies the invoicing process
Apart from inventory management, point of sale allows you to record and group your invoices. As a retail store manages different types of invoices, POS software simplifies the invoicing process.
You can find a sale, purchase, rental consignment, and repair invoices in a POS. This helps in efficient management of accounting operations.
If you have a product that is a hit before it touches the shelf, you can allow customers to pre-order it and pay later using the invoicing feature available on most POS systems.
Also, invoices are proof that you sold a particular product. It contains information such as the number of purchases, transaction value, and description of the products purchased.
Performing these tasks manually would be a nightmare and lower customer satisfaction and experience.
Interesting statistics: Companies that excel at customer experience grow their revenue by 4-8% of the market.
3. Increases customer loyalty
Loyal customers are much easier to upsell and cross-sell than new customers.
But, how can a retail store identify its loyal customers?
That’s where a POS system’s customer relationship management (CRM) feature comes in.
Such a tool helps you identify your loyal and most importantly your valuable customers.
From the information you receive, you can hold special promotions and sales to notify your customers about an upcoming sale through email or phone because these customers have a higher probability of making a purchase.
Interestingly, you can use this data to motivate and reward customers through customer loyalty programs so that they keep coming back.
Pro-tip: A POS is a must-have tool in your tech-stack because loyal customers equate to higher sales potential. It helps you close more sales and accelerates your retail store’s growth.
4. Ensures better employee engagement
When running a retail store, you might wear ten different hats to ensure a profitable business and maintain a higher customer satisfaction rate.
But, what about your employees?
With an employee management feature of a POS, you can efficiently manage employee information, track their working hours, and track the sales they generate in a day.
As most POS has a feature that asks employees to clock in and clock out using a PIN, you can track their work hours and make payments based upon it.
It also helps you understand employees who outperform and slack in their work.
To further manage your employees and store, a POS helps you assign different back-office roles such as cashier so that some employees have access to certain features of the POS system.
Pro-tip: Using a POS, a retail store can identify the store’s busiest time to manage their staff’s schedule efficiently.
5. Provides reports and real-time updates
Time and again, you’ve heard data is king, and it still holds!
You can’t do a retail business on guesswork, intuitions, or suggestions. A retail store requires numbers and data to create effective business strategies and make smart business decisions.
Now, imagine a situation where you buy 50 kilograms of sugar without having data reports because your intuition told you. But during the next two days, you managed to sell just 25 kilograms, resulting in monetary losses.
On the other hand, a POS system tells you that you need to order precisely 25 kilograms of sugar for this week. You can purchase exactly what you need without wasting money.
With real-time updates, you can determine which products need restocking and marketing. This can increase sales based on the analytics that your system provides.
Retail stores that focus on analytics and real-time updates can better manage their store.
Interesting statistics: According to a survey, 50% of small businesses believe that reports and data they generate in a POS are essential for running a successful small business.
6. Ensures excellent customer experience
Apart from managing inventory, POS software provides an excellent customer experience in your store. When you create a better experience, it leads to customer satisfaction.
As a fast POS allows you to complete transactions, the customer no longer has to wait for billing.
Interestingly, you can use POS for providing cross-selling features. Using this, you can market items related to the item a customer is purchasing. For instance, if a customer is buying a laptop, the sales executive can offer a mouse or a keyboard protector.
As it shares customer information across your store, you get access to their purchase history, trends, and interests. This way, your customers can avail offers across all your stores, even at
different locations. It ensures that customers are more satisfied with their purchases.
Apart from displaying complete inventory information, a POS makes it possible to generate deals and offer coupons. It allows you to view your efforts on the entire sales.
Interesting statistics: Businesses that deliver excellent customer experience obtain a revenue between 4% and 8% above their market.
7. Provides new sales and payment channels
A powerful and modern POS system gives you new payment and sales channels like e-wallet and ecommerce options.
A robust POS system ensures cashless payment adoption as technology gets better, cheaper, and faster.
Now is the right time to adopt a POS system and reap numerous benefits.
The more payment channels you provide, the more are your chances of winning a customer and retaining them for a long time.
Interesting statistics: The global POS market is likely to reach $26.61 billion by 2028.
8. Better purchasing and supplier order management
Purchasing products or equipment for your business is essential, and a POS system can help you manage your purchases from your suppliers. This keeps track of all the orders that you place.
Many POS software has an open API that helps you connect directly to your supplier. When you place orders from a POS, you can effectively view all your invoices using your POS.
This feature gives you control over what you purchase from the suppliers and provides an invoice.
Interestingly, a POS system allows you to plan your future purchases and identifies the minimum number of products you require for the adequate functioning of your store.
This helps plan and manage your store and ensures you have the optimal amount of inventory to minimize your losses.
Pro-tip:Â A POS software offers features that can manage your retail store single-handedly.
Summing up
With the retail landscape changing drastically, you wouldn’t want to be called the late adopter of technology.
Retail technology is not scary. It’s adaptable and can take your business to the next level.
So, a business must use a POS system to make managing and running a retail store much easier.
Contrary to popular belief, a POS system is cost-efficient and easy to use.
Having a good POS in place can be the difference between a retail store’s success and failure.
Author’s bio
Priya Jain is a professional copywriter with 8 years of experience. She has an MBA and engineering degree. When she is not writing, you will find her teaching math, spending her day running behind her toddler, and trying new recipes. You can follow her on LinkedIn.
