A point of sale system is demonstrably the most important tool you can have when running a retail business.
In fact, retail stores that invest in a strong POS system are quick to see a huge return on investment.
A retail POS can help you save time and money by streamlining repetitive tasks, maintaining business records, and reducing human error. Even better, it can even help grow your retail business with useful data and marketing integrations.
Keep reading to find out more about how your retail business can benefit from a POS system.
What is a Retail POS?
Traditionally POS stands for “point of sale” – which refers to the place where a customer transaction occurs. Or in simpler terms, the point at which a customer hands over money in exchange for a product that they’ve purchased.
For many retailers, this usually means the area surrounding the checkout line. For retailers who adopt cloud POS or mobile POS solutions, their whole store essentially becomes a point of sale.
What is a Retail POS System?
To better manage in-store checkout, retail POS systems were created. The original POS systems were a combination of hardware and software that retailers used to manage their sales operations. Because POS systems are the only source of all detailed store sales, they eventually expanded to include everything from tracking customer history and taxes reports to advanced marketing and inventory management.
Retail POS Software
Today, there are 2 main types of retail POS systems in the market: on-premise software and cloud-based subscriptions.
On-premise POS software: This type of software is installed on specific devices and usually does not rely on the Internet because the data is stored on the same devices. Because the database is stored “locally” in a specific server computer in your store, you can only access the data when you are in the store.
Cloud-based POS software: Cloud software stores data in an off-site cloud server (often hosted by a major cloud hosting service such as Google Cloud or Microsoft Azure) and is accessed via the Internet. You can compare it to writing a report on Google Docs. As long as you have an Internet connection, you can access your report from anywhere. While there may be some limitations without Internet access with cloud systems, there are major gains in remote accessibility, cost-savings and real-time data accuracy. Click here for more information on the benefits of cloud-based retail POS software
There is also a 3rd type of “hybrid” retail POS system which combines a hardwired local connection with access to data in the cloud. While this type of solution reduces the reliance on Internet, it is often a more complex system to maintain and more commonly used by larger operations. At the same time, because it is designed to allow for longer offline use, there is greater potential for issues with data quality during “synchronization” of online and offline data.
Expert Tip! It’s also important to note that offline usage and “data integrity” actually work against each other. While it is key for operations to have usable salesscreen functions (or alternative ways of processing sales) when the internet or network is down, the quality of the pooled data is lower and less accurate the more often the stations in a POS are “offline.” So if getting accurate, accessible business data from anywhere is a major priority, it’s important to consider a system which prioritizes real-time data accuracy with fast and reliable data sharing and considers offline usage for emergency scenarios only. Systems that prioritize offline capabilities over the data sharing functionality will be designed for infrequent synchronization. While this may not be a concern for certain types of businesses, the reality is that omnichannel retailers that need real-time stock quantity and even restaurants that take online orders need accurate POS data to make better operational decisions. After all, customers now expect real-time information when they intend to shop or order something. It’s another reason why smart POS is now able to automatically help merchants update correct store information or product stock levels in real-time.
Retail POS Hardware
POS hardware includes all of the physical components of your POS system. It is usually comprised of the following items:
1. POS terminal: This is the hardware or device (computer, laptop, desktop etc.) that the POS software runs on.
Traditional, on-premise systems have limitations when it comes to hardware. This is because most on-premise solutions can only operate on certain devices and operating systems (such as Windows or Mac).
To use on-premise POS software, a license must be installed on each device that a merchant wishes to operate on. At the same time, licenses are often tied to the hardware they are installed on and can be difficult or costly to transfer to other devices.
For newer, cloud-based POS software, merchants can use any device with Internet connectivity to access their data – laptops, tablets, desktops and even mobile phones. Cloud POS software does not require merchants to pay per device, rather merchants often pay per active station (or users logged in at the same time). Transferable access offers multi-channel merchants a lot more flexibility when managing store operations.
2. Cash Drawer: A cash drawer is an important yet simple part of a retail POS system. This piece of hardware provides both security and organization to retailers. It is where cash, coins, checks and credit card receipts are stored.
The receipt printer will send signals to the cash drawer, prompting it to open when necessary.
3. Barcode Scanner: Barcode scanners are an important part of most retail stores. Compared to restaurants, retailers carry a lot more inventory and need to use barcode scanners to make checkout an easier and faster process for both store employees and shoppers. Scanners use lasers to read barcode numbers unique to each SKU and enter these numbers immediately in the POS software.
While most retail POS systems should be designed specifically for barcode scanners, it is important for there to be other search methods should barcode tags get damaged or lost. Without scanners, cashiers should be able to quickly search by product codes or keyword for each item in the store.
Expert Tip! Unless a retail store has a very low number of inventory items (e.g. coffee shop), the default salesscreen mode should be designed for barcode scanners. The picture gallery touchscreen mode commonly found in tablet-based POS was traditionally designed for restaurants where the number of inventory items is very low and is generally not efficient in retail stores with more than 500 unique SKUs. While some POS providers will serve both restaurants and retailers, if the default salesscreen is designed for touchscreen picture gallery, most likely the company that developed the original software started with a restaurant POS and later retrofit it for retail.
4. Receipt Printer: Once a customer pays for the items that they have purchased, cashiers will usually hand them a receipt to confirm payment. While email receipts are increasingly popular, the majority of receipts are still printed based on the data received from the POS software.
There are three ways that credit card terminals can accept credit or debit payments:
1) Using chip & PIN cards: Where shoppers insert chip & PIN cards to make a purchase. This type of payment is EMV-compliant and the most secure of the 3 types.
2) Swiping card magstripes: Where shoppers swipe their cards in order to make a payment. This type of payment is not EMV compliant and opens the merchant up to chargebacks on all payments processed.
3) Near-field-communication (NFC): Where shoppers use their devices (Apple or Google Pay) or simply tap their cards to pay. This type of payment is the fastest of the 3. While tap is not as risky as magstripes (it is generally only allowed for individual payments of up to $100), in a busy store, this can be costly as the merchant is still fully liable for any chargebacks.
3 Reasons Why Your Retail Store Needs a POS System
Adopting a POS software that is designed for checkout speed will help speed up store operations and improve shopper satisfaction. This is especially important for busy multi-lane stores as they often deal with long line-ups.
Faster checkout is also key to increasing revenue during high season or rush periods. The longer your customers wait in line, the slower your turnover and lower your sales.
Here are some checkout features to look out for when choosing a retail POS software designed for fast checkout:
Easy navigation: Look for a software that is designed for checkout speed and minimum clicks. You shouldn’t have to leave your salescreen in order to complete a transaction.
Fast scanning speed: Retail POS software should be designed for quick barcode scanning with easy recall of your last search. Make sure that the system you’re looking at is able to handle multiple barcodes per SKU as every retail product commonly has an internal code, a shortcode, a vendor code, a manufacturer code and possibly several carton codes.
Advanced inventory search: Besides barcode scanning speed, a retail POS software designed to handle high volume inventory or a large number of transactions quickly needs to be able to have smart search functions including keyword search by description, barcode or tag should labels not be scannable, etc.
If you want more information about adopting a line busting retail POS software that is designed for checkout speed, click here.
2) Increased Mobility
Retail POS systems – cloud POS software in particular, provide retailers with more flexibility and mobility. As data is stored in the cloud, store owners can access their business information around the clock from anywhere – even if they are not physically in the store. They can view inventory levels, tax reports and sales data right from the comfort of home or even on vacation. Well-designed cloud POS software can also function on any device – from tablets, laptops to smartphones.
3) The Ability to Use the POS Data for Retail Marketing
POS data is critical to the success of any business. This is because data provides retailers with the tools to effectively manage inventory, sales, and finances.
Besides standard sales and inventory reports, modern cloud-based retail POS systems help store owners sell more using their own POS data. Because cloud POS are particularly good at integrating with other cloud solutions, real-time store data can be shared other solutions such as e-commerce platforms, shipping services or listings such as Google My Business, which help improve SEO and drive more local foot traffic to stores.
We will be posting more POS tips in the upcoming weeks.
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Which means that being online is now essential for retail businesses (both small and large) that are looking to grow sales and foot traffic.
In fact, the majority of shoppers are now conducting product research online before making purchases in store. Specifically, shoppers are using Google to search for products, read online reviews, and find local businesses.
This is where SEO comes in. Good SEO helps shoppers find your retail store – both online and offline
What is SEO?
SEO stands for search engine optimization. It is the process and a set of best practices you follow to rank as high as possible in search results.
Search engines like Google need to be able to pull the most relevant content to display to users. In order to do so, these search engines use mathematical formulas (also called algorithms) to figure out which websites should be displayed first.
Google’s algorithm determines how valuable content or websites are based on a number of factors. These factors include mobile responsiveness, site speed, keyword usage, link-building, content quality etc.
The goal of SEO is to send signals to Google’s algorithm that show your content is both relevant and valuable. Or in other words, that it is worth ranking high in search results. Obviously, the higher your content ranks, the more likely you are to generate traffic to your website and physical store.
Organic (unpaid) search results also appear more credible to shoppers. Think about it this way – the main goal of Google and other search engines is to provide users with high quality and credible content. Because of this, search engine users now associate higher rankings with more valuable content.
So by implementing SEO in your marketing strategy, your site will rank higher. Having a higher ranking website will then build credibility and authority amongst your target shoppers. Ultimately, this will generate more sales for your retail store.
2) Attract Local Shoppers
There are billions of local searches made each month. According to Google, 80% of people now use a search engine to find local information.
This is why a local SEO strategy is more important than ever for brick and mortar businesses. A strong local SEO strategy comes with many benefits including:
Greater local visibility
More relevant traffic
Increased visibility on Google Maps
A good local reputation
As you can see, ranking in local search results is a big deal! Retail stores with a strong local online presence are more likely to see an increase in foot traffic and sales.
3) Low Marketing Costs
Traditional marketing methods (billboards, TV advertisements.) make it difficult for small brick and mortar businesses to compete with larger retailers. Although an SEO strategy may take time and effort, it allows smaller retailers to compete with these bigger names for a much lower cost.
Organic search has also proven to be more effective than paid search advertising. Not only does it generate more sales for your business – but it does so at a lower cost than PPC or traditional marketing campaigns. Put simply, an SEO strategy will generate a higher return on investment – making it worth the time and effort.
Another advantage is that SEO tactics attract shoppers that are actively searching for your products or business. This is why it results in more relevant and qualified shoppers – or in other words, better business.
SEO Boosts Store Traffic and Sales
By now, you should understand why an SEO strategy is well worth the time and effort. Appearing in top search results will get your retail business in front of a relevant local audience, ultimately leading to more traffic and sales.
We hope you found this article helpful!
We will be posting more SEO tips in the upcoming weeks. Subscribe to our blog to stay updated on the latest retail news, trends, and tips!
Retail merchandise includes all of the products and items that are available for purchase at your store (shoes, pet food, jewellery etc.). It is also commonly referred to as inventory or stock.
What is Retail Merchandising?
Put simply, merchandising is how your products or inventory are displayed in your store.
But there is more to merchandising than just attractive displays.
It involves everything you do to sell your merchandise once a shopper steps foot inside your retail store – from selecting the right products to pricing and promoting them in ways that will attract shoppers
Why is it Important?
When shoppers step foot inside your store, the goal is to get them to make a purchase – obviously. And merchandising is a tool that gets shoppers closer to that purchasing decision.
Strong merchandising practices can be the difference between a highly profitable store and a struggling one.
The benefits of an effective merchandising strategy include:
Maximized Retail Space
Satisfied and Loyal Shoppers
Increased Employee Productivity
There are many ways to attract shopper attention and encourage purchases in store. Some popular strategies include:
Product samples and demonstrations
Cross-merchandising (placing similar items together)
Store signage (shelf signage, promotional signage)
Effective store design (the layout of the sales floor)
Promotional merchandising (pricing, discounts, special offers etc.)
Stocked shelves (having the right products at the right time)
Tips for Creating Effective Displays
Merchandising is an art and a science – meaning that it has both visual and strategic aspects to it.
The visual aspect has to do with how well your displays grab the attention of shoppers. It’s about making sure product displays appeal to the human eye.
While the strategic aspect has to with product and display arrangement. In other words, what products should be placed in each display and where.
Here are some tips for creating effective displays:
1) Display merchandise vertically rather than horizontally
It is more effective to display items vertically rather than horizontally. This means displaying similar products up and down your shelves rather than extending them across displays. By doing so, shoppers can find what they need by standing in one spot
2) Keep merchandise at eye-level
As the saying goes, “eye level is buy level”. This is one of the most popular concepts when it comes to retail merchandising. Eye-level is the best-selling height on every display – as it is the easiest height for shoppers to browse.
3) Use signage
There are many different types of signage when it comes to retail merchandising – outdoor signage, informational signage, directional (location) signage, and promotional signage.
Effective signage plays an important role in operating a successful retail business. It helps drive foot traffic while making it easier for shoppers to navigate your store. Without it, a poor shopping experience is probable.
4) Display as much merchandise as possible
Fill your shelves with as much merchandise as possible. This will avoid backroom stock while giving shoppers the impression that you can meet product needs.
5) Make sure all merchandise is priced
Displays are ineffective if you do not have clear and easy to locate price tags on your merchandise. So ensure all items are priced and that prices are consistent throughout your store. Shoppers are likely to get frustrated without proper product and pricing information
6) Cleanliness is key
Make sure your retail space is clean and organized. This will ensure that you are creating an appealing shopping experience for your customers.
A clean retail space will also attract shoppers and result in repeat visits. Cleanliness in your retail space includes a clean storefront (window displays, front doors etc.), fresh floors and shelves, and neatly stacked product displays.
7) Use loss leader pricing
This is when you sell products at below cost (or minimum profit margin) to entice shoppers to make a purchase. It’s important that you place your loss leaders at the back of the store.
This way, shoppers are encouraged to walk past other product displays in order to reach the “loss leader”. The intention behind this tactic is to drive sales of higher margin products in your store.
Loss leader pricing often leads to impulse purchases and is commonly used by popular grocery chains. For example, most grocery stores use milk or eggs as a loss leader. As shoppers have to walk to the very back of grocery store to purchase these items, it is highly unlikely that it will be their only purchase.
We will be posting more merchandising tips in the upcoming weeks! Subscribe to our blog to stay updated on merchandising trends, strategies, and industry best practices.
If you are looking to increase your ranking in search results, Google My Business is an easy place to start. I’ll explain why below.
What is Google My Business and How Does it Work?
Google My Business (GMB) is a verified online listing service offered by Google. Any business owner can use it and it’s completely free.
In order to use GMB, you create an online business profile that displays important information such as store hours, location, website, and contact information. When shoppers search in Google for your business or similar businesses, your business profile will appear directly in the search results.
Now that you know what GMB is, you need to know how it can help you sell more.
With many large retailers offering loyalty programs, it’s easy to think that there isn’t value for small retailers to develop their own programs. But there are a number of reasons as to why this isn’t true:
Lower Cost of Acquisition. Even if you take into account the cost of offering loyalty benefits, with a carefully-designed program, repeat program customers will pay out over time as the cost of their business is much lower to acquire vs. new customers. While it’s expected for direct cost of goods to be carefully tracked, it’s still easy to forget how expensive the indirect costs of business development are — marketing, free shipping, etc.
Make Customers Sticky. By rewarding repeat customers for their business, you are making it harder for your competitors to make inroads as there is a cost for your customers to stop buying from you.
Store Data. Store Data. Store Data. Many retailers work on razor-thin profit margins. Inventory is the largest asset for retailers. It makes sense for you to have a clear idea of what products your most loyal customers want to buy. The data from loyalty programs often pays for itself if it is utilized to optimize supply and demand in your store. Minimizing stock-outs and overstock will reduce how much ongoing inventory you need to carry and ultimately, improve your cashflow.
Channel for Direct-Customer Engagement. Loyalty programs are an easy way for retailers to get permission to market to customers. Essentially you are offering program benefits in exchange for authorization to communicate with customers. Remember that customer engagement is often a two-way street nowadays. Customers appreciate businesses that also value their opinions.
Profiling for Personalization. Loyalty programs are a great way for retailers to collect quality product feedback or actionable service improvements that will improve your customer engagement and save you money in the long-term. Because customers volunteer their profile and demographics details to become a loyalty member, you are able to deliver higher personalization to create a more unique (and hopefully more profitable) engagement.
How do I Implement a Loyalty Program?
Have I convinced you to implement a loyalty reward program yet for your small business? If so, there are a few things you can do to run your program more cost-effectively and successfully:
Don’t focus exclusively on discounts. You want to rewards shoppers, not encourage your best customers to only buy on discount. While special offers are expected with most loyalty programs, it’s more effective in the long-term to offer a range of benefits such as:
Special Events: book signings, wine & cheese meet and greets, launch partie
Exclusive Access: limited edition new products, members only early access
Free Gifts: exclusives for volume purchase, samples from manufacturers
Free Services: alternations for purchases, wifi access (e.g. free wifi with data collection from companies such as Purple, etc.)
Don’t constantly hard sell. Shoppers are marketed to in nearly every medium today — from TV to social media. Studies show that consumers, especially Millennials, are jaded from relentless hard selling. Today’s buyers are increasingly looking for retailers that offer discounts or experiences. As the retail expert, Steven Dennis, quoted in one of his recent articles for Forbes magazine:
…engage in a discounting fueled race to the bottom or seek to do what is unique, intensely customer relevant and truly remarkable, where price is not the determining factor in the customer’s decision.
Be careful when setting up the terms of your loyalty reward program. This cannot be stressed enough as it can be costly (financially and in terms of goodwill) to change a loyalty reward program once it is in place. As companies such as Waitrose in the UK have learned, there is an art to even giving away free coffee or tea. It’s important for retailers to consider everything from affordability, running costs, how to minimize program abuse, whether the benefits match the values of your target market, whether to have caps or expiry on benefits, etc.
Offer a sign-up incentive. An easy way for you to increase engagement and sign-up for your loyalty reward program is by offering a free gift or a limited time offer with purchase. Offering low profit-margin stock or manufacturer samples is a common practice but remember that program members should feel that they are getting a gift of value, not simply a throw away product.
Promote your loyalty reward program in-store. Merchandising your retail store on a budget includes having displays in-store to encourage customers to sign-up for your loyalty program or to showcase your latest reward benefit. If you have the budget, digital signage will make it easier to make updates over time without having to re-print display materials as new benefits or offers are launched. Having in-store displays will also help your staff as it encourages shoppers to ask about joining during check-out.
Training of check-out staff. It doesn’t help a business to offer a loyalty reward program if the check-out staff give shoppers the impression that those who use them are a nuisance or thrifty. Make sure to train your check-out staff to ask if paying shoppers are members, and if they are not, whether they would like to join. Offering a loyalty reward program without bothering to train staff about program details or by discouraging its usage will only come across as insincere by savvy shoppers in today’s competitive retail environment. This is especially true if you plan to have tiers in your loyalty program. The backlash against Sephora’s famous Beauty Insider program is a prime example of how retailers can lose sight of the purpose of their programs and how to execute them.
Loyalty reward programs are a great way in which to build a following of repeat customers or even influencers over time. Consider the tips above to make sure you are offering a successful program that adds long-term value to your bottom line.
Good Luck and Happy Retailing.
I’m Karen Wong, contact me if you’d like to connect. Follow me on LinkedIn.