This article is part of a larger series on POS Systems.
A point-of-sale (POS) system is a must-have tool for brick-and-mortar businesses today. Globally, the POS market is growing at a healthy rate—it is anticipated to reach $26.61 billion by 2028 from just under $10 billion in 2021. More and more businesses are shifting from using a basic cash register to using a POS system as it provides benefits such as greater operational efficiency, increased sales, and happier customers.
Let’s take a deeper look at 11 key POS benefits below.
1. Saves Managerial Time
POS systems are not only tools to process payments—increasingly, they are becoming a hub that connects all of your small business software tools, from scheduling and payroll to accounting and inventory management.
Modern, cloud-based POS systems either include all these tools in an all-in-one system or give you the option to connect to other software applications to build your complete software solution, referred to as “integration” or using “integrated apps.”
Choosing a cloud-based POS that integrates with your other business software shaves off hours of managerial work. For example, you can purchase and receive inventory in your POS and sync your sales data directly with your accounting software.
In addition to connecting with traditional accounting software, many POS systems like Square offer payroll services to handle the financial element of your business in just a few clicks. You can also build staff schedules in your POS and manage your employee hours. Employees can clock in and out through the register (or mobile app), and the information can be transferred directly to your payroll processor.
2. Improved Customer Experience
As a retailer, it’s essential to consider the customer experience—not just your logistical and backend needs. Nearly 60% of consumers in a Talkdesk survey said their customer service expectations were higher now than before the COVID-19 pandemic. Furthermore, more than half of Americans are willing to pay more for excellent customer service. With an advanced POS, you can improve your customer process in multiple ways:
- Accommodate various payment methods: Eliminate that embarrassing moment when your customers dig through their wallets to find the right card. Offering e-wallet, contactless, and PayPal payment methods can help reduce the time it takes customers to complete transactions.
- Saved payment types: Returning customers don’t even need to take their wallets out when you save their preferred payment method in your POS. This method is an excellent strategy for boutique and service businesses that have close client relationships.
- Saved customer information: As important as saved payments are saved customer information, which can include loyalty program points, contact information (for service industries that take appointments), or even something as simple as calling a customer by name.
- Self-checkout: Not everyone likes self-checkouts or ordering kiosks, but those that do appreciate the convenience and speed of DIY. Self-checkouts can also help you save on labor costs.
- Checkout on the sales floor or at the table: Reach customers where they’re at, without needing to wait in line. Mobile and tablet POS systems allow associates to ring transactions on the sales floor as soon as shoppers make a buying decision.
- Easy item lookup: Customers appreciate getting fast answers regarding the price, location, or availability of the item they need. POS systems let your salespeople and cashiers access this information with a few clicks or a quick barcode scan.
Many customer conveniences necessitate saving customer information. Be sure your POS system is well secured. Read our article on protecting POS data for more information and tips.
Strictly Bicycles grew from a $1.4 million business to a $4 million business in less than 18 months. Owner Nelson Gutierrez said that Lightspeed enabled them to optimize opening hours, streamline services, and unshackle management from operating in-store. This meant they could scale quickly without sacrificing customer service.
3. Engage Customers on a More Personal Level
Along with improved customer service is engaging customers directly. With all your POS data, you can build targeted campaigns to reach potential customers with personalized messaging and promotions. In 2021, 60% of shoppers surveyed said they were more likely to become repeat customers after a personalized experience. A POS makes these personalization efforts more manageable and effective.
Many POS systems have built-in marketing tools or the ability to add marketing apps and features. These might include email, social media, SMS, and other channels. Personalization can go beyond adding their name to an email; the best POS systems can take the customer’s shopping history into account when offering sales, discounts, or other marketing communication.
Your loyalty program is a powerful customer retention tool that encourages repeat purchases, higher spending, and more word-of-mouth marketing. In fact, according to a frequently reported stat, customers in loyalty programs generally spend 20% more than others.
A successful loyalty program needs to be easy to sign up for and use. POS systems make it easy to add customers to your loyalty program and redeem rewards when they check out with a user-friendly interface.
Located in Wayne, Pennsylvania, Out There Outfitters was facing a challenge: Most of its merchandise was easily purchased directly from the name-brand retailers online, such as Yeti and The North Face. It added Lightspeed Subscriptions to its POS system, which let the company reach out to customers with deals and loyalty programs. It has seen an increase in repeat business to its in-person store as well as increased sales overall.
Trackable (and Actionable) Customer Feedback
Savvy retailers not only collect but also listen to—and proactively address—customer feedback. A POS system allows you to do more than simply monitor your Yelp page. You can use a POS to prompt customers for direct feedback via in-store surveys or targeted emails after purchase.
Shoppers can use the POS themselves and share their thoughts. This is important as 71% of customers said they will leave a review if the company makes it easy to do so.
4. Offers Ecommerce Capabilities
Ecommerce is a vital part of restaurant and retail sales in this post-COVID world. In fact, 23% of consumers say they shop online at least daily! Whether you are accepting food orders through your website or selling items via an online store, the best POS systems have tools for connecting your online and in-person sales capability.
Even stores that are community-focused can benefit from an ecommerce channel. Gym+Coffee was already using Shopify for an online store and in-person POS when the pandemic hit; by the end of March 2020, its online orders were stressing its supply chain. It started making use of buy online, pick up in-store (BOPIS) tools. While other businesses were closing, Gym+Coffee actually opened two new retail locations during the pandemic.
Here are a few things you can do with an ecommerce-integrated POS system:
- Free online store: Some POS systems, like Square, offer a free online store. These are relatively simple but are tracked in your POS system. Others provide tools for selling on your page or social media. A few, like Shopify, offer a complete ecommerce system.
- Inventory tracking: Most POS systems, like Shopify, track both online and in-person sales of inventory items so you know exactly how many items you have and when you need to order.
- BOPIS (Buy Online, Pick Up In-store): Buying online to pick up in-store has skyrocketed as a feature. It grew 106% in 2020 (and another 10% in 2021) because of COVID; over half of shoppers said they will continue to use it for convenience. Most POS systems are providing this capability.
- Food orders: Most restaurant POS systems allow you to integrate with delivery systems like DoorDash. The best systems can also feed online orders directly to your POS or kitchen display system according to the priority you set.
5. Grows as Business Trends Change
Cloud-based POS systems are constantly updating their software to support emerging consumer trends. This means that a solid POS will keep your business up-to-date as customer preferences change. It is easy to accept increasingly popular payment types like mobile wallet payments (like Apple Pay and Google Wallet), online payments, and contactless, near-field communication (NFC) payments with a POS.
A study by GlobalPayments found that over half of all merchants are planning to expand payment methods in 2022. These include adding digital wallets (60%), taking QR code payments (60%), and accepting digital invoicing (51%). In fact, by 2023, digital wallets are expected to account for 30% of POS payments. Most POS systems are already on top of these trends.
A growing trend is using chatbots or live chat for customer service. StartupBonsai says chatbots are the fastest-growing brand communication channel. If you want to add software like live chat on your website, you can easily do it with a POS integration. Customer satisfaction ratings for live chat are usually higher than other support channels, and it’s the preferred support channel for millennials and Gen Z.
Some POS systems—like Lightspeed Retail—integrate with live chat software. These tools can provide customers with answers to simple questions (like hours of operation and parking information), process simple orders and appointment bookings, or alert customers to the shipping status.
Consumer demand is on the brink of another major shift that will impact independent retailers and restaurants: voice ordering. Since Apple introduced Siri in 2011, consumer reliance on voice assistants has increased every year. A Statista study predicts that ecommerce purchases made via voice channels will account for $19.4 billion in 2023.
6. Boosts Revenue
We’ve already mentioned several ways that a POS system boosts your revenue by improving customer experience and moving at the speed of developing technology. But, even without those cutting-edge features, a POS boosts your sales by increasing the number of revenue streams—or sales channels—your small business can handle.
Beyond simple in-person sales or appointments, you can add additional ways for customers to interact with your business through online sales, mobile events, pop-up shops, catering, or subscription services. Here are a few examples:
- A salon specializing in cut and color services might add an online store to sell its recommended line of hair care products.
- A popular burger joint might want to expand into catering.
- A vintage clothing store could easily take its shop on the road to meet customers at community events or outdoor markets.
Another way to increase revenue is to cut profits. A POS helps you categorize your sales so you can also track your costs accurately. You’ll know in real time if your new pop-up shop plan is worth your effort or if you need to hire more cooks to support your catering operation.
Buy Now, Pay Later (BNPL)
Another growing way to increase sales is by offering BNPL, which allows a customer to purchase an item and pay it off over time, usually in four installments. Once only for large purchases, it’s now possible and desirable to apply them to purchases of any size. In fact, by offering BNPL, stores can increase conversion and ticket sales by as much as 30% and 50%, respectively. BNPL payments are expected to rise to 24% of all purchases by 2026. POS systems like Lightspeed are incorporating BNPL systems like Afterpay.
Discover the best buy now, pay later apps for online and in-store. Ask your POS provider which they support.
7. Provides Accurate, Real-time Data
While you can track key performance indicators (KPIs) manually by using spreadsheets and shared drives, it can quickly become cumbersome and tedious, taking you away from more critical business matters. With a POS, most of that tracking is automatically done for you, so you can focus on more impactful tasks like helping customers, merchandising your sales floor, or designing new menu items.
In addition to daily sales, you can easily track the following:
Best of all, you can pull reports at any moment and get a clear, real-time picture of your active costs versus sales, so you can make decisions when they can still impact your bottom line. For example, if your sales are lower than expected for a day, you can send a sales push on your social media, text, or email marketing platforms. If it’s a busy day and you’re close to selling out of your most popular jeans, you can place a rush order in time for your supplier to restock.
To learn more about retail and restaurant KPIs and how to use them, check out our guide How to Use Retail Data Analytics to Drive Sales.
8. Automates Tasks
Automation is a great way to run your business more efficiently and accurately. If you choose the right POS, you can automate tasks like employee scheduling and inventory management. You can customize your system to alert you to low stock or employees that are about to hit overtime. This takes some of the busy work out of monitoring stock levels and mitigates costly issues like stockouts or excessive dead stock or unnecessary overtime.
Most POS systems like 7shifts and Homebase come with built-in employee schedulers or integrate with top-of-the-line tools. These scheduling tools can auto-populate your employee schedules based on sales and staff availability and set your POS to reject early clock-ins or overtime hours.
If your store relies on a management team, you’ll also save some managerial time; studies have shown that up to 20% of managers’ time is spent writing schedules.
You can further control costs by automating your inventory—setting low-stock alerts, generating automatic purchase orders—and online ordering channels. Some POS systems will also offer advanced features, like predictive analytics and vendor management too.
9. Centralizes Operations & Analytics
If you own more than one store or a franchise of stores, you may want to be able to track information for each one and for all of them together. In addition, you may want to be able to communicate between stores, such as for transferring products or even bringing in staff from one store to help another in a pinch. With POS software, you have many of these capabilities.
A POS system routes information from several different data streams to present all your business information in one place. In the US, consumers purchase from retail locations, online stores, Amazon, eBay, Instagram, Snapchat, and Facebook, to name a few. Even traditional brick-and-mortars are adopting these avenues. The days of single-channel commerce are long gone.
Emerging sales channels are an exciting way to grow your retail business, but expansion also introduces new logistical challenges. A POS can help address these. The best POS systems are command centers for your retail or restaurant operation, connecting your sales data to any number of other software tools.
These tools may include built-in POS modules like sales, employee clock punches, and incoming vendor orders, or they might be expanded tools from integrated third-party apps. This centralization is so refined that many top-performing POS systems can send it all to a mobile reporting app that you access on any smartphone.
10. Ensures Secured Information
With all this talk of revenue-boosting, sales-increasing, and expanded operational capacity, you’ll want to ensure that your (and your customer’s) data are secure. As technology and data management continue to advance, so do cyber-attacks. Reputable POS brands ensure that their payment data and order streams are encrypted, protecting your customers from fraud, and protecting your business from liability or data breaches.
According to one PwC survey, after pandemic and health crises, cyber threats were CEOs’ biggest concern in 2021. Always check that your POS system is updated regularly. Most data breaches are from online sources. However, you should set user accounts with different permission levels to mitigate employee access to unauthorized information on your in-person POS systems.
Most POS systems offer bank-level security. Expect to see the following:
- PCI-DSS compliance
- SOC I and II level payment processing security
- SSL/TLS data encryption
- Physical and electronic security for cloud servers
- Two-factor authentication for administrative access
Learn more about POS Security in our guide to point-of-sale security.
11. Provides Support When You Need It
Your new POS system can do a lot more than ring up sales, and to get the best return on your investment, you should learn to use all the features. All top-of-the-line POS brands include customer support resources to ensure you get the most out of your system.
Many also have searchable online knowledge bases or blogs that you can access anytime to learn new features that can expand your business operations. This blog post from Lightspeed, for example, explains how to add customer Wi-Fi to your shop and use this amenity to collect data that supports marketing campaigns. Others provide how-to videos.
Retailers and restaurant owners are ready to put the COVID-19 pandemic in their rearview. Still, it’s important to remember how POS partners showed up to support their clients with discounts and business advice during the era of social distancing. These are just a few examples of how POS companies supported their small clients through the pandemic:
- Shopify offered 90-day free trials to new customers, and for existing customers, it waived fees for gift cards, curbside pickup, or local delivery software.
- Toast waived all software fees, offered free online ordering and gift card software, supported lobbying efforts to pass the RESTAURANTS Act, and set aside $35 million in a Restaurant Recovery fund.
- Square flooded its online knowledge base with helpful information about applying for PPP loans and complying with local labor laws, offered free email marketing tools, and expanded its POS’s ability to use QR codes for touchless transactions.
Owning and operating a small business has always had challenges. Charting a course through a retail landscape that is shifting faster than ever will absolutely be easier with a strong POS partner supporting you.
Some POS providers offer business tools that go beyond their POS systems. Square, for example, offers small business banking that includes accounts and loans. Shopify University offers business classes for free. Toast has free templates for business plans, schedules, menus, and more.
At the end of the day, POS systems enable small, independent retailers and restaurants to operate with the same efficiency as much larger brands—and they have never been more affordable, In fact, many well-established POS brands like Square and Toast offer systems with $0 software fees. If you have been wrestling with the register-versus-POS decision, look for a brand that offers free trials or short-term contracts and operates on the hardware you likely already own (like an iPad). Read our guide to the best POS systems for small businesses to find one that fits your needs.