A feature-rich point-of-sale (POS) system is one of the most valuable tools for a retail business. This software can fill many needs, such as tracking inventory, processing credit card payments and providing unique insight into how your business operates. The ability to accomplish all of these tasks with one system can help streamline your business operations and save you money.
A good retail POS system can integrate multiple business areas into one interface, but which other components are vital to retail businesses? Before you buy a POS system for your business, learn what features to look for.
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Top POS features for retail POS systems
There are many types of POS systems, and they're not all created equal. Still, the good ones should have certain features. Here are some of the top features you should look for in a retail POS system:
1. Shortcut keys
To speed up checkout lines, a good retail POS system will display buttons for the most frequently purchased items or categories. This way, the cashier can touch a single button to ring up those items. If a customer wants to buy other items, there should be a quick and intuitive way to look up products.
2. Wide choice of payment options
The easier it is for a customer to pay you, the more they tend to buy and return to your store. Select a POS system and payment processor that lets you accept all major credit and debit cards, as well as Apple Pay, Google Pay and Samsung Pay.
As a bonus, consider accepting PayPal and Venmo, depending on whether your customer base includes many young people. You may also want the ability to generate and accept gift cards and store credits.
Most POS systems accept several payment methods, but some take it to the next level by letting users pay with gift cards and split the payment among different payment methods. The more flexibility you offer your customers, the better.
3. Omnichannel integration and management
Having both an in-store and online presence is vital for businesses to maximize sales and profits. Customers often want to buy online and pick up in the store, as well as check retailer websites to see if something is in stock before they head out to a location.
Your POS system should offer an omnichannel experience and online sales management to increase your online presence and grow your business. These two features work hand in hand, as online sales management provides the option to effectively regulate e-commerce, while an omnichannel platform supports the sales of products everywhere your customers are – in your stores, at off-site locations, on desktop computers, on mobile devices and on social media.
4. Customer management tools
Your POS system should give you the ability to look up customers by name or other criteria and append their purchase history to their profile. Personalized marketing is a huge trend, and for good reason – consumers respond. Over three-quarters of consumers surveyed said they choose, recommend or pay more for brands that provide personalized service.
When your POS system has good customer management tools, it's much easier to provide a high level of personalized attention based on purchase history. For example, if you see that a customer recently bought a barbeque grill, you can offer a promotion on a grill cover or barbeque tools. Or for consumable, old or obsolete items, sending a timely reminder that it's time to repurchase can effortlessly boost sales.
POS systems take the effort out of this level of personalization, making it easy to boost customer loyalty.
5. Mobility
Mobile POS systems are becoming common in retail, and many customers are beginning to expect this option. Consumers hate waiting in line, and a mobile POS reduces this problem. For example, sales associates at the Apple Store use mobile POS systems to check out customers anywhere on the sales floor, giving customers a more personalized experience and letting them skip the line.
Another option is for stores with traditional countertop checkout stations to add a mobile tablet to the system to use when the line gets too long. In some instances, mobile POS systems can be set up as self-service checkouts. Businesses that sell goods at farmers' markets and trunk shows also greatly benefit from mobile POS systems.
In response to the COVID-19 pandemic, a growing trend is self-serve kiosks that allow customers to scan and purchase items unassisted. These unattended transactions are made possible thanks to POS software with kiosk and mobile features, enabling merchants to transform tablets and smartphones into self-ordering and self-payment stations.
6. Inventory management
POS inventory management is one of the best features of POS systems, allowing you to track inventory in real time. By integrating business orders with online and in-store purchases, business owners can track their supply levels quickly and efficiently.
By tracking inventory in real time, businesses can save money and avoid making mistakes when ordering from their suppliers. The sooner you have products uploaded to your POS system, the quicker you can sell online and offline.
7. Employee management
In addition to managing and monitoring a business's supplies and finances, some POS systems can manage worker productivity.
Ann Motovidlak is a front-end supervisor for Gerrity's, a grocery store based in northeastern Pennsylvania. Gerrity's has nine locations in the area, and Motovidlak said managers use the RORCv6 POS system to track employees' work.
"Cashier productivity is a feature we like to use," she said. "We monitor our cashiers' sales, scans and items per minute, and voids. It also assists us in loss prevention."
Productivity tracking can be a valuable function in maintaining a secure and financially sound work environment. For many small businesses, managing employees and closely monitoring sales creates a more reliable and efficient workplace.
Several systems also feature built-in time clocks, employee sales information and security management geared directly toward employees.
Some systems even allow business owners to set permissions for different employees based on role, store or individual. By managing a worker's access to different business areas, owners can ensure their operations run smoothly and safely while avoiding micromanagement.
8. Reporting tools
Reporting tools are important for retail POS systems because retailers need to see not only their sales, but also which products are their best sellers (top margins) and worst sellers (low margins). Seeing hourly transactions and product movement will let you adjust your purchase orders accordingly.
Reporting tools also allow you to see the effectiveness of your promotions, your top salespeople and customers, and customer buying trends. You can identify what days, times and seasons are busy and slow, thus helping you optimize staffing levels. Many reporting tools let you apply different filters, such as a time frame, so you can pinpoint exactly what you are looking for.
9. Credit card processing
Credit card processing is another essential feature to consider when choosing a POS system. You have the option of a POS system compatible with a processor or a POS system that offers in-house processing services.
The best POS systems are compatible with multiple credit card processors or at least give you the option to compare rates and switch processors if needed. This is especially important if you have problems with a processor.
While some POS companies offer convenient, in-house processing services, these can be more expensive than POS systems that offer processor compatibility. This option can also be more challenging since you have to replace both the POS system and the processor if you switch services.
Both types of POS systems are more convenient and accurate than having your credit card processing as a separate system, where you ring up the customer's purchases on the POS system and then manually enter the total on the credit card terminal. By ensuring that your retail POS system has credit card processing ability or compatibility, you can successfully accept customer payments.
10. Third-party software integrations
A POS system that integrates with other programs can add a customer management aspect to your business without requiring you to introduce a new production process to accommodate an additional program.
Integrating with third-party software lets you adopt new functions, such as recording customer information, maintaining loyalty programs and offering targeted promotions. Some POS systems have built-in customer relationship management features, and some offer a series of readily integrated software applications.
Ben Adler, owner of Rebicycle in Montreal, said his business uses the Lightspeed POS system with third-party scheduling software Booxi to create custom bikes. (Read our review of Lightspeed for more information.) Lightspeed and Booxi integrate seamlessly, so Adler can record customer booking information without inputting it multiple times.
"When somebody makes an appointment on Booxi, and they actually come in the store, I already have all their customer information, including their phone number, their email address and what service they're coming in for," Adler said. "I can automatically create a work order in Lightspeed with that customer information already populated, and so it's very easy for us to make a quote on the spot."
Another valuable integration involves loyalty programs. Customer loyalty is important because repeat customers tend to be the most profitable ones. To keep them coming back, you have to offer more than sales and discounts.
That's where loyalty programs come in; for example, giving customers cash back every time they spend money at your business. Most POS systems offer a loyalty-program feature or integrate with a third-party solution, enabling you to create a rewards program.
11. Multiple user accounts and permissions
Many POS systems offer support for multiple user accounts. Unless you're a sole proprietor, you should choose a POS system with this functionality. Depending on the level of service you receive, some POS vendors offer unlimited accounts.
When each employee who rings up sales has a unique login, you can track their productivity, pinpoint problems and reward outstanding performers. This feature also lets you track sales for commissions and bonuses if your company offers these compensation types. The other benefit of this multi-login system is discovering and stopping any theft or errors.
12. Bulk-product imports
The most time-consuming part of setting up a POS system is entering product information. Some POS systems allow you to import all of your product information at once, which are known as bulk-product imports.
Bulk-product imports are particularly important if you sell a wide variety of products or your offerings change frequently. This way, you won't have to upload products manually, which is an inefficient process if you sell more than a few items.
13. Granular product specifications and bundles
If you have multiple versions of a product, such as different options, colors or sizes, your POS system should be able to distinguish between them. That way, you'll have better data when it comes to reordering, because you know on a granular level what's selling.
The ability to bundle products that are frequently bought together speeds checkout, increases sales revenue and gives you the ability to offer customers discounts on bulk purchases.
14. Promotions and discounts
If a product isn't selling well or you're switching to other seasonal merchandise or you're looking to generate additional foot traffic, promotions can be an excellent sales tool. If your POS system can easily accept promotions and discounts, you'll have greater flexibility to try to measure marketing ideas.
15. Scalability
If you're opening a small retail business for the first time, you might not initially need all the extra widgets and features available. However, as your retail business expands, it's essential to have a POS system that can grow with you. This can be the difference between seamlessly upgrading your POS system to fit your new needs and having to move your information to an entirely new platform.
Jean Iennaco, director of operations for Over the Top Cake Supplies in San Antonio, said her company now has multiple corporate stores and franchise locations. While she initially didn't need a POS system that supported multiple locations, that feature became critical as her company grew. Iennaco said her Revel POS system has been great for managing the expansion. (Read our Revel Systems review for more information.)
"We initially had another POS system, which wasn't compatible for multiple-location use, so we switched to Revel, which is compatible," Iennaco said. "We have four locations. I can be anywhere and help them out if there are issues. For example, I can check on locations by going into reporting and offering advice on ways to increase sales for the month. It's user-friendly and convenient for having multiple locations."
If Iennaco had used scalable software like Revel initially, she wouldn't have had to go through the trouble of switching systems. This is just one example of how a system can be scalable.
Benefits of POS systems for retail
Whether you're operating an online shop from your living room or have several physical stores, there are many benefits of using a POS system to run your retail business. From speedier checkout to inventory management, here's a look at the top advantages of retail POS software.
- Ease of use: A modern, cloud-based POS system is extremely easy to use. The software resides in the cloud, and the hardware is usually plug and play. Beyond setup, using the devices is also a breeze. Touchscreens and intuitive interfaces make it easy for employees to learn as well.
- Fast checkout: Whether you're selling online or in a store, speedy checkout is critical. Long lines lead to frustrated customers, and cumbersome online checkouts result in shopping cart abandonment. A POS system can help prevent those scenarios because POS terminals tend to be faster than cash registers at processing payments and can accept several payment methods. If your business uses a mobile POS system, employees can ring up customers on the fly, and sales clerks can check stock and place orders for customers in seconds.
- Easy order management and inventory tracking: Cash flow is everything for a retailer. It dictates how much inventory you can order and how many promotions you can run. A POS system automates much of the inventory management processes across multiple stores. It can automatically alert you when inventory is being depleted. More advanced tools do the ordering for you and pinpoint sales trends. A POS system reduces excess inventory as well, tracking what sells and what doesn't.
- Expanded payment acceptance: To optimize sales, you should support your customers' preferred payment methods. For some, that's credit cards; for others, it's debit cards. Moreover, many customers now prefer contactless payments and digital wallets. Choose a POS system that supports as many of these payment methods as possible.
- Better sales insights: POS systems collect a lot of important data for you. They can tell you what items are selling out, which ones are doing poorly, and what times of the day or week business is the best. POS systems can spot trends, reorder inventory and help you forecast, and they give you data in real time, enabling you to react quickly.
- Enhanced data security: It's incumbent on you to protect your customers' payment data. One breach can easily spell your business's demise. When using a cloud-based POS system, you don't have to worry if your server is secure, because your data is stored securely in the cloud. All you have to do is set strong passwords and use two-factor authentication when available.
Donna Fuscaldo and Skye Schooley contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.