Retail marketing is when you promote your store and products to make a sale. You’ve likely already engaged in tactics to get customers interested in your store and then your products. To make retail marketing more effective, it’s important to take a data-driven approach. And, as a small business, a lot of data resides in your POS system. A retailer’s POS is rich with customer insights that businesses can use to create and optimize marketing campaigns.
We share eight ways you can use your retail POS to improve the effectiveness of your marketing.
1. Decrease Customer Acquisition Costs (CAC)
Entrepreneur reports the retail industry standard Customer Acquisition Costs (CAC) to be an estimated $10. And ProfitWell found that CAC is up almost 50% over the past five years. Your (CAC) tells you how much money you need to invest to earn the first sale from a new customer. It’s more expensive to acquire new customers than to retain existing ones, so it’s always wise to optimize your CAC.
Many modern POS systems track CAC over time—and knowing your current costs is where you need to start before you can work to decrease them. Once you pull that information from your POS, you can use it to reduce CAC further. Here are a few ideas:
- Build lookalike audiences using your POS’s customer database
- Run surveys and solicit customer feedback to understand why they buy from you, and then create customer acquisition strategies around those insights
- Track total new customers by unique credit card transactions
2. Increase Conversions
POS software can also help businesses increase conversions. This goes beyond simply learning about and appealing to your customers. POS technology makes it easier, and therefore more appealing, for customers to make a purchase. It eliminates friction from the process in several ways.
For example, you could use your POS data to analyze foot traffic and see where shoppers drop off, or where they spend a lot of time so that you can place high-priority merchandise in high-traffic areas.
POS technology also empowers businesses of all sizes to execute a true omnichannel experience. You can integrate POS software with other tools to get a holistic view of the path to purchase and optimize touchpoints along the way. Sync it with your email marketing software, for example, and see who views email receipts and what they do with them. Or connect it with your ecommerce site to see if and how in-store sales were influenced online.
An advanced POS with mobile and payment processing features allows associates to reach customers where they are. American consumers will leave a checkout line after waiting for six minutes. Instead of requiring all shoppers to queue up in line, an associate with a mobile POS can make a sale on the floor.
You can also accommodate your customers’ payment method of choice. Cash is no longer the currency of choice. According to Pew Research, 29% of Americans say they don’t pay for anything with cash in a typical week. And Toast reports 90% of restaurant diners prefer to pay with a card.
Today’s POS systems can accommodate more than just debit and credit cards—including online pay, payment installments, bill splitting, contactless, mobile pay, and more, giving customers more ways to pay.
3. Build Customer Loyalty
While customer acquisition is important, customer retention is a far more cost-effective way to increase revenue. And a POS system has the features you need to build customer loyalty over time.
Depending on the system you use, you can create customer profiles with purchase history and saved payment information, along with other pertinent details and shopper preferences. Using this information to get to know your customers better builds loyalty over time because you can offer personalized service with minimal effort.
Some POS systems even have built-in customer loyalty programs to incentivize repeat purchases and referral marketing. If there’s no integrated loyalty program, many POS will connect with a third-party option. Plus, a POS makes it easy to sign up. Customers can easily opt-in at checkout; no lengthy signup needed. Fast sign-up is especially necessary to younger consumers. A MobileMarketer study found that 28% of Gen Z consumers won’t sign up for a loyalty program if it takes too long.
Why loyalty programs are essential for your bottom line:
- Growing loyal customers by 5% can grow your sales by up to 75%.
- 84% of consumers say a loyalty program makes them more likely to stick with a brand.
- 66% of shoppers admit to changing spending behavior because of a loyalty program.
- Loyalty members spend about 37% more than non-members.
4. Run Targeted Promotions
Targeted, personalized promotions are more effective than generic offers made to appeal to the masses. According to a Salesforce report, only 37% of shoppers feel like retailers know them.
Your POS makes it easy to create, update, and organize customer profiles so you can segment your audience and run targeted promotions only to those who would be interested.
You can use those profiles for personalization in a number of ways: Associates can make informed product recommendations or you can run retargeted social ads based on purchase history, to name a couple. Instead of wasting ad spend targeting an audience that isn’t relevant to your offer, you can invest more in targeting an engaged audience.
5. Optimize Product Pricing
As a retailer, it’s important to optimize product prices both for conversions and for profit margins, which can be tough because they’re conflicting goals. With a POS, you can get the insights you need to price products accurately. You can quickly gauge the cost of goods sold (COGS) so you know how much you need to breakeven or turn a profit. Lightspeed, for example, shows COGS, margin, and profit so you can ensure you’re in an upward trajectory.
Consumers rely on price to determine product quality. One study found that retailers who sell relatively high-priced products might want to keep prices high. But if you look at the research around pricing strategies, there’s tons of conflicting data about what the right pricing strategy is.
One experiment published in Harvard Business Review showed graduate students were willing to pay more for a product they felt passionately about. According to a different survey, discounting is a top pricing method for 97% of retailers. And one study looking at the effect of product bundles found that Nintendo Game Boy sold the most products when the devices were bundled with a game rather than individual products alone.
There are many different motivations for purchase and several ways to price strategically against these motivations.
If you’re running promotions and trying to determine which pricing strategy is best, you can test discounts, promo codes, product bundles, and freebies with your POS so you can see what resonates most with your customers. Apply these strategies and then pull reports to see which generated the most conversions.
POS systems might also allow you to set individual prices for retail, wholesale, VIP customers, and more. To learn more about how to accurately price products with high profit margins, while motivating customers to buy, read our full guide on product pricing.
6. Use Predictive Analytics
One survey found 81% of retailers collect shopper insights, and 76% consider insights critical to performance. However, only 16% consider themselves data science experts. But retail data is becoming increasingly important.
Predictive analytics are projections based on historical data to help business owners make strategic decisions. With a retail POS, you can incorporate predictive analytics into your marketing strategies. Many POS systems, like Lightspeed, have built-in reporting functions that use AI technology to help you more accurately forecast. All you have to do is export the report.
Essentially, predictive analytics makes personalization a lot easier and more streamlined. It can analyze customer behavior and spot trends. When other shoppers exhibit similar patterns, you can fire off marketing campaigns informed by those insights.
7. Create Effective Email Campaigns
Your email list is extremely invaluable—while it might be housed in your email service provider (ESP), you own that list. Also, unlike your social media followers or Amazon customer list, your email subscribers are yours. That’s just one of many reasons email marketing should be an integral part of every business’s marketing strategy.
54% of customers use email customer service channels, making it the most commonly used digital customer service channel.
Using a capable POS makes it easier to execute effective campaigns. For starters, many POS systems will send email receipts to customers, which offers another touch point and opportunity to nurture that relationship.
Beyond that, you can use built-in email marketing features or a third-party integration with your POS to send campaigns based on customer behavior. You can also sync it with customer data to trigger automations, which takes some of the manual labor and time needed to launch campaigns.
Data syncing allows for personalization, too, which can improve your email performance. In fact, one experiment by Experian found that personalized emails are six times more effective.
8. Reach Customers Through Multiple Touch Points
Consumerism is constantly evolving. As time goes on, shoppers use more channels than ever before to make a purchase, research their options, interact with the brand, and carry out the actual transaction.
A retail POS system allows businesses to reach customers at more of these touchpoints than a traditional setup:
- With a mPOS, associates can interact with customers and make sales on the floor, at events, at pop-up shops, and more.
- Collect email addresses to send digital receipts, post-purchase promotions, and review solicitations.
- Launch a customer referral program to stimulate word-of-mouth marketing, where new customers learn about your brand through an indirect touch point.
Bottom Line: POS Systems Improve Retail Marketing
Regardless of your current marketing strategy, your retail POS has tons of information you can use to optimize your campaigns and increase ROI:
- Decrease customer acquisition cost
- Increase conversions
- Build customer loyalty
- Run targeted promotions
- Optimize product pricing
- Use predictive analytics
- Create effective email campaigns
- Reach customers through multiple touchpoints
Learn more about the benefits of using a POS system.