Each aspect of your business is equally important, but if there’s one that stands more crucial than others, that would be the point-of-sale (POS). It’s the moment when a potential client finally transitions into a paying customer.
Most businesses already have an established point-of-sale system.
For brick-and-mortar stores, that would be the cash register or checkout counter. For online shops, it’s the order confirmation and checkout page.
There are various types of POS systems, as well as different reasons to get them. In this article, we are going to talk about what a POS system is, how it works, and how you can use it to your advantage.
What Is a Point-of-Sale System?
In a nutshell, a POS system is the platform that manages the purchase transaction. It can vary according to your type of business and industry.
Most POS systems these days have gone digital already, though. This modernization has made them more accessible not just for business owners but for their customers as well.
How Do POS Systems Work?
POS systems are very straightforward. The first step that POS systems perform is to collect all the orders.
Analog systems do this by scanning the barcode of the product and computing the total cost.
Digital systems are faster since they collect their data during the main shopping process.
They will then record and collect them in the customer’s digital shopping cart. This provides more transparency and convenience, just in case a customer changes his mind. It will also free up your personnel since there won’t be a need for a cashier to process everything anymore.
Once the shopping is done and the customer is ready for payment, the POS system will then calculate the total and get the system ready to receive payment.
At the end of the process, the customer then pays for the products (or services), the system accepts the payment and creates a receipt. Analog POS systems will usually print out the receipt. On the other hand, digital systems can send a receipt through SMS or email.
Don’t think that digital systems would only apply to online shops, though. There are a lot of brick-and-mortar stores that are trading their cash register for a POS application. After all, the digital POS system simply offers more benefits.
The Benefits of Using a POS System
Here are just some of them:
- It collects more data and provides invaluable information. Tracking your bestsellers will be more challenging with just a cash register. Digital platforms allow you to collect more data about the purchase habits of your loyal customers.You won’t even need to compute important metrics like your average customer spend and purchase frequency.
- It is more convenient. Have you ever experienced getting your order canceled as a customer? It usually takes the service personnel a few minutes to locate the product that you want to void and cross it out from your receipt.This hassle is significantly prevented when you use a digital system since most of them allow you to remove items in a couple of clicks (or taps).
- It sets up room for expansion. It is very easy to integrate new payment methods with a digital POS system. They can also allow you to add other features like adding a POS financing software.
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How to Attract More Customers with a POS System
The biggest benefit, though, is how it attracts more customers, and that’s because of the following reasons:
- Quick Payments. A POS system makes payments faster. It automatically calculates the total as the products are entered. It also allows customers to switch between payment methods easily.
- More Personalized Customer Experience. A POS system can collect and record your customers’ information within their platform. From personal information like their name, address, and contact information. It can make your marketing efforts more targeted and personalized. The analytic reports can also help you make smarter business decisions moving forward.
- Automation and Inventory Management. One of the features that make a POS system more ideal for us is the automation features that it provides, especially when it comes to inventory management. How many times have a customer ordered something that you no longer have in stock?
This would have been easily prevented with a POS system that automatically records each purchase and tags inventory items that need to be replenished. Some platforms even allow customers to file for a pre-order of out-of-stock or upcoming goods.
- Better Security. Most POS systems have built-in cybersecurity features that will protect financial information from unknown intrusion. Double-user authentication, for instance, can prevent fraud and access of malicious users into your system. While we have said that a POS system is more accessible to your customers and employees, it will still depend on how you’re going to manage it. After all, you can always grant, limit, or block access to whoever you see fit.
- Encourages Customer Loyalty. Due to the numerous conveniences, we have mentioned above, a POS system can do wonders to increase customer loyalty. In fact, recent statistics point out that 80% of customers are more likely to purchase from a business again if they offer a convenient and personalised shopping experience. This will help you with customer relationship management.
How to Choose a POS System
Are you ready to transition to a digital POS system? Then here are the factors that you should definitely look into before you choose your platform.
There are a lot of fully digital platforms that can grant you access after signing up for their services. However, brick-and-mortar stores would require to pay certain hardware costs to get it going. This hardware can include a specific barcode scanner, a display unit, a card reader, a receipt printer, and a terminal.
You can purchase these pieces of equipment separately. A portable digital device like your smartphone or tablet can double as a display unit. However, you will still need to get a terminal if you want to offer card-based payment methods.
Most POS providers offer interest-free financing and installment payment plans. A lot of them also offer multiple packages that allow newer (or smaller) businesses to start with a more affordable plan that they can simply upgrade later on.
Ease of Use
POS systems should be straightforward to use. We highly recommend working with a provider that offers free training, or at the very least, instructional videos.
Reporting and Analytics
You might have noticed already, but we take these features very seriously. For us, a POS system isn’t complete if it doesn’t record data, provide automated reporting, and offers a variety of exporting features. There are even platforms that come with accounting and inventory management tools.
Integration and Scalability
Finally, an ideal POS system can grow with your company and integrate with future technological developments such as machine learning and artificial intelligence. It would also be nice if it could fit in seamlessly with the other digital platforms you might already use, like accounting and payroll tools.
While there is no perfect platform due to the varying needs and preferences of business owners, there are platforms out there that are willing to partner up with other companies to provide you with a more holistic and streamlined experience.
A POS system might revolutionize how you’re conducting the payment processing of your business. Not only can it make your payment processing faster and more streamlined, but it can also increase the productivity and efficiency of your staff, as well as provide more flexibility and convenience for your customers, as well as improve your customer management in the processes.
If you are looking for an easy to use software for managing inventory, please check ProfitBooks.
It offers simple tools to track inventory lifecycle from purchases to sales. Get it free.