A POS—or point-of-sale—system is an invaluable business tool that has replaced the traditional cash register with constantly evolving, tech-driven solutions. These platforms go beyond in-person transactions by offering business management features such as click and collect shopping, loyalty programs, and bill splitting. Below, we look at eight POS trends and how they impact small businesses everywhere.
1. Untethered POS Systems
In the traditional retail environment, transactions happen at one location: the checkout counter. But with modern POS systems, you’re no longer tethered to the counter. Instead, associates can meander about the store, interact with customers, and complete sales on the spot. What’s more, mobile and cloud-based POS transactions enable businesses to make sales from anywhere.
In fact, there are expected to be 85.6 million mobile POS users in the United States by 2025.
And, the average mobile transaction value in the US is expected to increase from just over $7,000 in 2020 to $11,755.20 in 2025, signaling the continued—and increasing—prevalence of untethered shopping.
In general, this more flexible checkout method is enabled by:
- Cloud-based POS technology: Today’s POS software is often cloud-based, meaning you can access your POS software and all of its data from any compatible device at any time. In fact, the cloud POS market size surpassed $1.5 billion in 2018 and is expected to grow to $6 billion by 2025.
- mPOS systems: Many cloud POS options also have a mobile component, or an mPOS, so associates can meet customers where they are and make sales on the floor. Using an mPOS also allows you to sell at events (like pop-ups, temporary markets, and trade shows) and facilitates tableside ordering and payments in restaurants.
Learn more: See the best mPOS solutions on the market
2. Seamless Omnichannel Experiences
Omnichannel isn’t a new trend by any means, but POS technologies continue to empower retailers to create a more seamless customer experience across all touchpoints.
Specifically, different types of POS systems can help retailers build:
- Non-linear paths to purchase: Today’s shoppers don’t use a linear path to purchase. For example, someone might initially learn about your products on Instagram, then browse your storefront, and finally make a purchase through your website. The buying journey is increasingly complex, even for traditional brick-and-mortar businesses.
- Ecommerce as an extension of brick and mortar stores: In the week ending Dec. 29, 2019 (during peak holiday shopping), ecommerce made up 14% of total omnichannel retail sales in the US—and online sales accounted for 63% of omnichannel growth during the same period.
- Click and collect strategies: Customers can shop online and come to the store to finish the transaction by paying in-person, taking advantage of buy online, pickup in-store (BOPIS), or curbside pickup. BOPIS is also on the rise and has grown from just over $23 billion in US sales in 2018 to $58.52 billion in 2020; BOPIS sales are expected to further expand to $74.24 billion in 2022.
Now, in the wake of COVID-19, 46% of retail executives plan to invest more in omnichannel retailing as compared to their pre-pandemic sales strategy.
Luckily, POS technology makes it possible for small businesses to accommodate these complex buying behaviors, letting them compete with larger companies with bigger budgets. Square POS and Shopify POS, for example, allow shoppers to start a basket online and complete their order in-store—and vice versa.
Learn more: How to implement click and collect in your store
3. Alternative Payment Methods
We continue to move away from being a cash-based society with credit cards accounting for 38% of point-of-sale payments and debit cards making up 29%. In fact, cash now accounts for just 12% of POS transactions.
While credit and debit cards remain popular, usage is expected to decrease gradually as consumers access ever-expanding payment options:
- Mobile/contactless payments: Digital/mobile wallets are becoming increasingly popular. While they accounted for only 6% of POS transactions in 2019, that number is expected to climb to 15.5% by 2024. These payment options include Google Wallet, Apple Pay, PayPal, Venmo, CashApp, and other apps and services.
- BOPIS: As of 2019, 83% of US shoppers had purchased items online for in-store pickup, and this model has only grown in popularity in response to the COVID-19 pandemic.
- Installment payments: If a customer doesn’t want to pay for an entire purchase at once, you can use a POS that has installment payment options. This is particularly ideal for consumers who don’t have traditional credit options, so offering these payment plans can improve conversions, average order size, and retention rate.
- Saved payments: For returning customers, you can use your POS to securely store their payment information for a more seamless checkout experience—encouraging repeat purchases and increasing customer satisfaction.
- Bill splitting: Especially handy in the restaurant environment, bill splitting gives customers the option to pay for a single ticket with multiple payment methods.
- Gift cards: Shopify POS, for example, has an omnichannel gift card experience—cards purchased online can be used for in-store purchases and vice versa.
- Loyalty and rewards programs: Customer loyalty programs encourage repeat purchases and increase customer lifetime value by offering incentives for customer retention.
- Cryptocurrency: E-currencies like Bitcoin, Tether, and Ethereum can be a viable form of payment if you’re willing to accept them. The currency is so prevalent, in fact, that there was an average of about 244,000 daily Bitcoin transactions in March 2021.
When you accommodate additional payment methods with a flexible, tech-forward POS, you can accommodate more customers—and encourage more sales in turn.
Learn more: How to offer customer financing
4. Personalized In-Store Shopping Experiences
According to a survey conducted by Epsilon, 80% of consumers are more likely to purchase from a company that offers a personalized experience; 90% find the idea of personalization appealing when making purchasing decisions. Still, personalization is a top priority for only 41% of retailers. POS industry trends are addressing these challenges head-on, as they make personalization easier and more accessible to small businesses at scale.
Having a POS that provides personalized shopping experiences is important because:
- Shoppers expect it: Consumers not only benefit from—but have come to expect—personalized experiences. They know the technology is out there, and they know their data is as well. Now shoppers are demanding they benefit from this information-sharing.
- Customers are willing to share data: To get the personalized recommendations they want, many customers are willing to share their data in exchange for a number of benefits. Of those surveyed, 39% find monetary compensation most valuable, and 20% would share their personal data for promotion incentives and discounts based on their interests. Perceived value is slightly lower for convenience and speed (16%), more responsive customer service and support (14%), and new services and products (11%).
- Buyers will shop elsewhere: Personalized service from retail associates is an important factor in choosing which store to shop at for 79% of consumers, according to another survey.
- You can increase your prices: Better experiences mean you can charge higher prices, which ultimately increases profit margins. In fact, 47% of consumers are willing to pay more for an improved shopping experience.
POS software captures valuable information with every transaction, so you can build customer profiles that help you learn more about your clientele. Over time, you can personalize automated campaigns through your POS, enabling your associates to access customer profiles at checkout or on an mPOS.
Learn more: Different kinds of shopper profiles and how to market to them.
5. Rise of POS Data Analytics
Half of consumers are willing to save purchase history, preferences, and personal details if it means the checkout experience is easier and they get relevant offers. But POS data is valuable for more than just getting to know your customers and their communication preferences. The metrics from your POS can also reveal information about your business’ staff, products, store layout, foot traffic, and returns rate—among other metrics.
You can also use your POS system to track which inventory is selling and which items are less popular with your customers. Likewise, POS data provides insight into seasonal trends and makes it possible to increase margins based on pricing data. This makes it easier for businesses to optimize retail data analytics and drive sales.
Learn more: How to drive sales using retail analytics
6. Upgraded POS Hardware
POS industry trends are also seeing developments in business-friendly hardware, like tablets and smartphones, barcode scanners, receipt printers, and cash drawers. Retailers are moving away from the traditional cash register and toward more mobile, flexible, and advanced registers. In fact, hardware upgrades are the top POS priority for 30% of businesses.
In addition to more mobile and wireless hardware, modern POS industry trends incorporate Bluetooth technology. This allows businesses to connect mobile card readers and other peripherals without hogging Wi-Fi bandwidth and increasing internet expenses. Still, the industry faces some challenges with respect to upgrading POS hardware. Newer, more powerful tools may increase network demand, be stolen, or require additional training for sales associates and other employees.
Learn more: Complete guide to POS hardware
7. Savings-Oriented Subscription Offers
Product subscription programs let customers enroll in recurring shipments—often at a savings. Common subscription services include razors, meal kits, clothing, cleaning supplies, and other commonly used household products. Because of these benefits, 20% of consumers are currently subscribed to health and hygiene products—or were at some time. The number is the same for beauty and cosmetics but is slightly lower for groceries and meal kits (18%) and household goods (15%).
Choosing a POS system that lets your customers subscribe to products or services makes it easy for them to keep their favorite products in stock while effortlessly maintaining brand loyalty.
Learn more: How to set up recurring payments for subscriptions
8. Integrated Customer Loyalty Programs
Loyalty programs are an important way to attract and retain customers through incentives and personalized products and experiences. And it turns out customers love these perks for a variety of reasons—55% of customers report joining a loyalty program to accrue points to spend, 39% sign up for cash rewards, and 38% join to receive personalized or special offers.
Conveniently, many of the best loyalty program software options integrate with POS systems and make it easy for customers to sign up for rewards.
Point-of-sale systems have come a long way since they were first introduced a few decades ago. Now, they’re more than just a way to take payments and make sales—modern POS trends have added features and capabilities that turn each system into a virtual command center for your entire business. With increased mobility, data analysis, and security, POS technologies are becoming an integral part of every retail business.
If your business could benefit from the increased flexibility and insight current POS technology provides, read our guide on the best POS systems for small businesses to find a solution to match your business needs.