POP vs POS: What's the Difference?

POP and POS are two important transactional elements of every retail store. While the point-of-purchase is the point at which a shopper decides to buy an item, the point-of-sale is where they actually pay for that item. POP displays promote products and build awareness, while the POS system serves a virtual command center that can process transactions and help you run other parts of the business.

Defining What Is POP and POS in the Store

Point-of-purchase (POP): The POP is the location where the customer makes their decision to purchase a product. Despite the term “point-of-purchase,” this can be anywhere in the store—not just where the transaction takes place. You’ll typically hear POP used when talking about in-store displays and marketing strategies.

Point-of-purchase (POP) display: A POP display is the actual signage or material that captures a shopper’s attention. You commonly see POP displays at cash registers or where customers queue up to make a purchase. POP displays can also be endcaps, shelves, cardboard signs, and other in-store signage and visual merchandising.

Point-of-sale (POS): The POS refers to the moment, including time and place, when a customer actually makes a purchase. Essentially, the POS is where the transaction actually happens. As retail technology continues to advance, the POS is no longer limited to the register and checkout counter. Now, mPOS, ecommerce, and omnichannel have extended the POS’s footprint—so the sale can take place on the showroom floor, at the curbside, a sidewalk sale, or even online.

Point-of-sale (POS) system: A POS system is used in in-person selling environments. It refers to the hardware and software that actually administers and processes the transaction. Hardware might include a card reader, bar code scanner, receipt printer, computer or mobile device, and cash drawer. The software handles payment processing, inventory management, warehousing, and accounting. The POS system is also sometimes called the POS terminal or just the POS.

Square Register is a popular POS system that includes Square Point-of-Sale, a touchscreen monitor, receipt printer, bar code scanner, and customer-facing display with a credit card reader. (Source: Square)

Point-Of-Purchase’s Role in Retail Sales

In retail, the POP plays a few roles. It’s meant to pique shoppers’ interest, educate them about your product or offerings, and encourage them to take the next step toward making a purchase. POP displays also contribute to the overall look and feel of your store, and they contribute to the customer experience.

POP displays allow you to draw extra attention to products and promotions you want customers to notice. They also give you an opportunity to test new ideas—you can roll out a POP display in a single retail location to ensure it’s effective before investing in rolling it out in all your retail locations.

POP displays are unique because they’re not your traditional product display or window display. Instead, they’re strategically placed and typically promote “nice-to-have” items—impulse buys, as we call them. For example, if you ever walk into a Marshalls or TJMaxx, you’ll see the POP displays by the registers full of small, low-priced items that are easy to pick up and add to your cart. No one visits these stores seeking out the POP display items, but many walk out having purchased one. POP displays are an easy way to increase average order value (AOV) or move aging stock.

Target promotes impulse buys by creating POP displays with snacks, soda, and new movie releases. (Source: Meaghan Brophy)

Tips for Creating Displays That POP

You want to create POP displays that stand out and inspire shoppers to buy. POP displays need to do more educating than POS displays. Here are some tips to keep in mind when building your POP displays:

Choose highly trafficked areas of your store: Use a foot traffic analysis tool to understand how shoppers move throughout your space, including where they spend the most time. Target areas with high dwell time to increase POP engagement and sales.
Promote small, low-priced, or seasonal items: Remember, POP display merchandise typically isn’t what shoppers come to your store seeking out. Instead, these are impulse buys, so you’ll want to appeal to that consumer mindset. Another good tip is to place items often forgotten near the checkout counter.
Try new tools and technologies: In-store POPs are evolving far beyond cardboard cut-outs and signs. Now, retailers can get detailed insights into how shoppers move within their store and target in-store customers on mobile devices using Bluetooth technology. You can even create your own mobile app—one report found that 21% of shoppers make unplanned purchases because of them.
Analyze and optimize your POP displays: Using the data from your POS system, you can see how well your POP displays perform. Make adjustments based on these insights to improve performance.

Optimizing the Point-Of-Sale

Let’s start with the traditional take on the POS: the checkout counter. Here, shoppers wait in line. While POP displays focus on product education, the POS area should focus on appealing to impulse buys.

Vocal Upsell

In addition to physical displays, associates can vocally upsell or cross-promote merchandise displayed around the POS—and elsewhere in the store—based on shoppers’ current and past purchases.

Stress Free Transactions

Beyond product promotion, the POS should be a quick, easy, and stress-free experience. With an advanced POS and well-trained staff, you can speed up the checkout process. Plus, mPOS options give associates the chance to meet customers where they’re at, on the floor. This means no waiting in line and fewer reasons to reconsider the purchase.

Personalized Shopper Recommendations

Even more technologically driven, you can use the POS to get to know your customers and offer personalized recommendations based on their information and behavior. POS technology allows for customer relationship management (CRM), loyalty programs, gift cards, discount codes, and other promotional options to drive more in-store sales.

Self-Checkout

In some scenarios, POS technology also allows shoppers to self-checkout—commonly seen in grocery stores or quick-service restaurants. In the latter, this may also include order customizations and bill-splitting.

How POS Systems Connect the Point-Of-Purchase and Point-Of-Sale

If you’re wondering how to use a POS system to analyze and optimize both your POP and POS, there are a few key features and capabilities to look for:

Inventory Management

Inventory features are a major benefit for most POS systems. You can create and manage SKU numbers, bar codes, product categories, supplier profiles, shipping labels, and other important product information.

Many POS systems will also track stock levels across all your commerce channels. This brings together your POS and POP displays by syncing inventory levels and alerting you when there’s an issue, like if an item is going out of stock or not selling fast enough. In case of the former, you’ll either want to reorder quickly (some POS software can do this automatically) or add some sort of messaging that the items are selling out soon. In case of the latter, you might consider adding those items to the POS and POP displays or encouraging employees to promote said items.

Customer Relationship Management (CRM)

With your POS system, you can collect customer information with every interaction. Your associates might get their name, phone number, ZIP code, or email address and add that to the POS system. Your POS system will also track their purchase history, including how much they spend, what they buy, which payment methods they’ve used, which location they’ve shopped, and if and when items were returned, among other customer behavior.

You can use these insights to create your POS and POP strategies. Segment your customers based on similar behavior and create displays based on your most valuable segments. Remember, POS and POP happens online too. So you can also launch insight-driven, targeted digital marketing initiatives.

Reporting

POS systems break down sales data down to the last detail—noting exactly when items are purchased and who made the sale, among other information. Advanced POS systems also drill down into where the purchase decision was made, or the POS as we’ve defined it above.

Reporting data from your POS system can tell you many things, including:

Which items are popular from POP displays
Which POP displays are most effective
When and where customers make the purchase decision, the actual POP
Sales upticks or drops in relation to POP displays
Which employees are responsible for the most sales
How quickly products sell when in a POP display vs not in a POP display
Which displays shoppers interact with most

Bottom Line

The POP and POS are two key drivers in every retail store and can improve the optimization and sales for your business when used effectively. Learn more about how to get more from your POS by reading our articles below.

POP vs POS: What’s the Difference?

Defining What Is POP and POS in the Store