The COVID-19 pandemic has created a new reality for retailers and consumers alike. Now more than ever, consumers are spending their time searching online and browsing the internet. As a result, it has become increasingly important for retailers to move their physical stores online.
But going digital doesn’t have to be complicated. In fact, it’s very possible to grow your business using the internet without actually selling anything online.
While we always encourage merchants to take orders online, and an e-commerce site can be an effective way to build an online presence, it is not the only way of doing things. Whether or not you have an online store, it will be extremely helpful for you to drive more foot traffic, more sales, and brand awareness using the internet.
So even if you aren’t ready to start selling online tomorrow, you can approach the process step-by-step. The entire 5-step process will be covered in this blog and video series.
Step 1: Be Found Online
Oftentimes, the first place that a customer learns about your business is the internet. Whether they’re searching on Google or discover you through an Instagram ad, your store’s digital storefront allows customers to interact with your business (calls, visits, or purchases etc.) even before they’re in your store.
What is a Digital Storefront?
A digital storefront is everything that a customer can find about your business online, including the following components:
Your Google My Business listing(s) in search results (and if your listings are complete and optimized)
Online customer reviews
Social media profiles
Your website (with or without an e-commerce component)
If your website is optimized for mobile devices (also called mobile responsiveness)
Visual elements of your business including photos and videos
How Your Digital Storefront Impacts your Retail Business
Online and in-store shopping were once seen as separate channels, competing for traffic and sales. But this is no longer the case. In fact, the future of retail relies on the two working together to deliver a seamless and complete customer experience, otherwise known as omnichannel retail.
Even though moving towards omnichannel requires change and investment across a retailer’s business operations (technology, processes, staff etc.), it can be done in a step-by-step process. Below, we’ve outlined the necessary steps that are involved in becoming an omnichannel retailer.
The following are some tools you can use to help your business be found online:
Google My Business
Google My Business (GMB) is a free online listing tool that helps retailers manage how their business appears on both Google Search and Maps. By verifying and optimizing your business listing, you can help local shoppers find you. Retailers can start by adding basic information such as address, phone number, store hours, and website URL. Then add details such as store and product photos, store description, and services etc. It’s also a good idea to get added to other local directory listings such as Yelp, Bing Local, Yahoo, Foursquare etc.
To learn more about Google My Business and the steps you can take to optimize your listing, download our ebook here.
When shoppers search for businesses on the web, online reviews from sites such as Yelp often appear. These customer reviews (if they are positive) can help drive more people to visit your store. On the other hand, negative reviews are likely to drive them away – which is why it’s important to monitor them carefully to maintain a good image.
It’s crucial for retailers to respond to all of their customer reviews – both negative and positive. In fact, even if you receive a negative review, a quick response helps to highlight good customer service to potential customers. To learn more about how to manage online customer reviews, click here.
If you want your retail business to sell more, it’s good to collect more customer reviews. Find out how to get more customer reviews here.
Social media can be a very effective platform for increasing brand awareness and attracting new customers. However, you need to know where your customers are digitally (e.g. which social platforms they hang around) before you can begin using social media to try and attract customers.
For example, if your target audience is an older demographic (50+), you have a better chance at success if you’re using Facebook rather than Instagram.
Retailers are advised to do research and figure out the top social platform(s) that their target demographic spends time on. From there, you can figure out the best practices for marketing on that platform. Remember – it may be tempting to be on every single platform, but by focusing on one, you have a better chance of learning it thoroughly and having success.
Your website has a major impact on how shoppers feel about your retail business. From the design, site speed, and product showcase, your store’s website is often the first impression customers have of your business. Remember – an e-commerce component is not a requirement for having a website. Sure, your customers may want it or expect it (especially in the aftermath of the COVID-19 lockdowns) but the purpose of any website is to drive traffic, sales, and awareness. Merchants should not let the fear of e-commerce prevent them from setting up at least an informational website.
The point is, building a website is an incredibly important step in establishing your store’s digital storefront. There are millions of local searches that take place everyday on Google and your business will show up higher in search results if you have a website which will drive more foot traffic to your store. In fact, 88% of people who conduct a local search on their smartphone visit a related store within a week. So, do your part by setting up your website and give potential customers a better chance to find you online before your competitors.
A website can also serve as a starting point for you to add new retail tech into your operations. For example, while customers may not be able to purchase directly from your website (if you don’t have e-commerce yet), they can still use it to browse through your merchandise. Or, you can use live chat software to answer customer questions and offer customer service in real-time.
If you would like to learn more about how to easily set up a website for your retail business, click here.
To learn more about the next steps to getting your physical store online, keep an eye out for the rest of our blog and video series.
Depending on your region or city, governments everywhere have been revising restrictions to help retailers re-open safely. Regardless of the local by-laws, it is important for retailers to be prepared to have and to manage mask policies for physical stores.
Over the past several weeks, cities and mainstream retailers have started implementing new universal mask policies. In this article, we’ll go over how retail owners should consider mask by-laws in-store, how to implement a mask policy even if it is not mandatory in your region, as well as some best practices on how to manage defiant shoppers.
Managing Mask By-Laws In-Store
If your store is located in an area where mask by-laws are in place, you’ll want to ensure that you take the necessary steps to implement new procedures pertaining to the by-law:
Print out a copy of the by-law from your municipality’s website and consider having a printed copy of the latest by-law available in the store to show to customers as required. Make sure you have read it carefully and are familiar with the requirements.
Develop a store mask policy in accordance with the by-law. Make sure to include necessary exemptions as stated by the government (individuals who are exempt such as those with health conditions or younger children, when masks can be temporarily removed etc.)
Be sure to train employees, particularly those who will be greeting and possibly confronting non-cooperative shoppers.
Display all necessary by-law signs (posters, signage on store-front etc.) outside and inside of every entrance to your store.
When Masks are Not Mandatory
Retailers have an obligation to provide a safe environment for both their staff and shoppers. In the absence of government orders, it is up to retailers to then determine how to provide a safe environment.
While masks are not known to protect the wearer from catching the virus, studies have shown that:
They do provide effective protection in minimizing the spread of the virus if the wearer is unknowingly sick (asymptomatic). Countries that have adopted universal masking policies (e.g. South Korea) have also had the best results in minimizing the spread of the virus.
More importantly, they have a positive psychological impact on shoppers that are scared. While some people do not believe in the effectiveness of masks, there is no doubt that mask policies make worried shoppers more confident to shop in-store.
Similarly, having a mask policy will make it easier for retailers to both hire and retain employees many of whom are worried about being exposed to many shoppers throughout the day.
As the virus continues to spread, many retailers have themselves announced mandates requiring all customers to wear masks in their stores. While some shoppers may find mask policies to be unfavourable, given the legal and ethical obligations of the situation, it would be in every retailer’s best interest to make masks mandatory. This will increasingly be easier to do as the largest retailers including Wal-mart, Best Buy, and Costco have all recently implemented universal mask policies.
Let’s take a look at some of the steps that retailers can take when implementing mandatory masking policies both in the absence of government orders and when government by-laws are in place.
1. Clearly communicate store mask policy
Given the number of different rules and regulations surrounding COVID-19 safety, it’s important to communicate your policy in a clear and respectable way to shoppers. This means having proper signage at all store entrances as well as inside the store and communicating the new policy via social media and digital channels (e.g. email and store website). It is important to announce your new policy in advance to make sure that shoppers are aware of the change and will be expecting to bring and wear a mask when they come to your store.
Signage should state your policy in an easy to understand manner such as “For the safety of our employees and shoppers, all customers entering store premises are required to wear a mask or face cover inside”. You may want to consider adding a list of exemptions to your signage as well (for ex: those with health conditions, hearing impairments etc.) Proper signage and marketing will make potential and returning customers more comfortable to shop at your store.
If you live in a region where universal masking policies are in place, you’ll want to ensure that all signage and marketing complies with rules of the by-law.
It is worth noting that some retailers have even taken denying access to all maskless shoppers, regardless of the by-law exemptions. In this example of a Fabricland store in Ottawa, the company policy goes beyond the requirements of local regulations and instead asks that anyone unable to wear a face covering to use their curbside pickup option. While stores are privately run businesses on private property and therefore may set their own store policies, it is important to consider both the potential legal and PR implications depending on how universal your mask policy is.
2. Station employees at store entrances
Create the role of “mask ambassador” and assign certain staff members to take on this role. Each “mask ambassador” should be stationed near an entrance of the store to remind customers of the new masking policies.
You may want to require these employees to wear specific clothing (e.g. a black t-shirt) to make it easier for shoppers to spot them. It’s important that these employees wear highly visible masks themselves and also receive special training to help make the process smoother for customers. Store owners may also want to consider hiring security staff to enforce mask usage.
3. Train store employees
Unfortunately there have been cases of angry shoppers using physical threats or even spitting on retail employees because of mask policies. This is why it is so important for staff to be trained on how to deal with different customer interactions including:
Those arriving without a mask
Exemptions pertaining to mask policies or by-laws (people with disabilities, hearing impairments, younger children etc.)
Customers wanting more information about the store policy or by-law
Aggressive, angry, or irritable customers
Fines related to by-laws
Shoppers asking for hand sanitizer or masks
In the past few weeks, social media has been full of videos capturing clashes between store employees and customers who refuse to wear masks. However, it’s not a retail employee’s job to manage any escalation with customers by themselves. Businesses have a legal and ethical responsibility to provide a safe working and shopping environment. If customers are abusive in their speech or actions, retailers have a right to refuse them. Click here for more examples of how to deal with customers who refuse to wear masks.
4. Consider giving masks away for free
If it is possible, offer to give or sell an affordable mask to unprepared shoppers to avoid turning away potential customers. Doing so is a great way to make it easy for customers to comply with store policy and/or government by-laws. It also helps showcase your support for your customers, employees, and community.
5. Provide alternative ways to shop
If customers have concerns about wearing a mask while shopping, providing them with alternative ways to shop online for delivery or contactless curbside pickup is a great way to continue to provide safety and convenience. Modern retail software platforms such as TAKU retail POS help retailers meet the new expectations of shoppers by allowing them to move their physical store online and sell from anywhere in the store, all in one flexible solution.
GDPR famously came into effect in 2018 but since then, CCPA in California and PIPEDA in Canada have both changed the privacy landscape further in North America. Now more than ever, retail owners have to be prepared to deal with customers who have questions about privacy. More specifically, questions regarding the collection of their personal information , what retailers intend to do with it, and how they will protect it from misuse/data breaches.
The best thing you can do right now is start on the process so that you protect your reputation with customers and be prepared when the US or Canadian government changes local privacy regulations again. After all, regulators and customers everywhere would rather see that you have a plan and that you’re working on improving rather than giving up or saying “it doesn’t apply to me.”
Rome wasn’t built in a day
For many small businesses, even knowing where the data of their customers and other people is stored is already hard. This is especially true nowadays with so much data being used and so many integrated systems. For most of us in North America, we’re just starting to consider how best to handle privacy in our day-to-day operations.
To make it easier, we’ve listed 8 basic steps for you below to help you get started on your privacy regulation journey within the context of PIPEDA, GDPR, and CCPA (download our GDPR checklists). These 8 steps are not necessarily enough for compliance with the different privacy regulations but they are a step in the right direction. Only you can decide the data risks you are willing to take with your business but hopefully this will help you clarify what those risks are.
1) Do a Privacy Audit for Personal Data
Download our checklists to make a detailed spreadsheet or summary of where you keep and collect personal data in your business.
2) Check if you currently handle Personal DataOutside of the Country
If you do already handle sensitive Canadian, American, or European personal data, we would recommend that you get further legal assistance as the different policies (PIPEDA, GDPR, and CCPA) already require that you comply. Here is a good comparative guide you can reference to understand the differences between each act.
3) What reason(s) do you have for collecting Personal Data?
Determine what lawful basis you have to collect personal data. Consent? Contract? Legal Obligation? Legitimate Interests?
4) Review existing data and delete any unwanted data
This is probably the most painful part of this exercise. If you have been patiently collecting customer or lead data for years, you will need to make the difficult decision to determine as to whether it is necessary for you to keep all of your existing data. In some instances, you may find that you have been collecting data for years that you never use. In others, it may be that you have some concerns about the source of a list of leads you received in the past. Whether you decide to keep the data or not, it is important that you are aware of what you have so that you know the risks.
5) Update company policies and agreements
6) Revise company processes and suppliers
Moving forward you should only gather personal data you need and make sure you have lawful grounds to process it.
Add and document consent wherever possible in your business processes. Consent has to be freely given, specific, informed and unambiguous (pre-ticked boxes aren’t allowed) on all of your forms (digital or paper). For email marketing, use reputable services such as MailChimp that are legally compliant so that subscribers are able to unsubscribe at any time.
7) Review all 3rd party processors and sign Data Processing Agreements (DPAs)
It’s also important to consider the privacy practices of your suppliers if you share any data with them that contains personal information. Be understanding that many North American businesses and most small businesses aren’t ready for updated privacy regulations but just make sure that your key partners are making efforts to improve how they handle privacy in their operations. If you’re sharing data with large processors such as Google Analytics, Facebook or MailChimp, you should sign the Data Processing Agreements (DPAs) or review the privacy settings they have for customers that share personal data with them. We’ve listed a few key processor DPAs below:
You cannot have privacy without security. While there’s no such thing as 100% security, every business should review who has access to company data and whether current security settings and back-ups are sufficient.
What we’re doing at TAKU Retail
Let’s face it, no-one likes long line-ups. In fact, a slow checkout process is almost guaranteed to result in frustrated shoppers, poor customer satisfaction, and a whole lot of lost sales in the process.
So, while the brick-and-mortar checkout experience has long since evolved from the standard cash register, shopper expectations have also risen along with it. Used to the convenience that e-commerce provides, today’s retail shoppers expect a similarly fast and easy checkout experience.
That’s why we’ve put together the following tips to help you speed up your in-store checkout. Keep reading to find out how you can provide a frictionless experience that will keep your shoppers smiling while you ring in more sales!
1) Accept different payment methods
Nowadays, shoppers pay with a lot more than just cash or card. That’s why accommodating different payment methods can go a long way in reducing lineups and speeding up the checkout process. In fact, the more payment options you accommodate, the easier it is for shoppers to check out efficiently.
To speed up your checkout process, consider enabling the payment types below.
Contactless Payments: Contactless payments are a faster alternative to chip and pin transactions. In fact, tap-and-pay technology has been adopted by many major credit card companies – becoming a popular payment option for in-store shoppers.
Expert Tip! Check your processing contract to see if you are liable for any chargebacks on contactless payments. While the increase in speed may still be worth the risk of possible chargebacks, you will want to minimize your exposure by encouraging the use of digital wallets (Apple Pay, Google Pay, etc.) which have secondary authentication. You can also consider having CCTV coverage in your checkout area to deter would-be fraudulent shoppers.
2) Offer a buy online pickup in-store (BOPIS) option
And what better way to provide immediate shopper convenience than a BOPIS option? After all, a great deal of retail continues to happen in nearby physical stores as shoppers are looking for something for immediate usage and they can’t wait for delivery. BOPIS solves several problems that have increasingly discouraged today’s customers from shopping in-store by:
Optimizing the customer experience by ensuring that shoppers are never disappointed (e.g. products are out of stock) when they get to the store.
Saving shoppers time when they are in the store – everything is already ready for pick-up. Retailers can streamline the process even further by dedicating certain checkout lines and POS stations to BOPIS shoppers. Don’t forget to merchandise around these areas with high-margin “snackable” products to capture any last minute impulse purchases!
At the same time, BOPIS also boosts sales and profitability for merchants by improving cashflow with prepaid orders, encouraging more impulse buys in-store, reducing overall delivery costs and minimizing returns compared to e-commerce.
It’s important to remember that BOPIS is most effective when used with a retail POS that can handle “unified commerce” as real-time stock levels are key to product availability. Unified commerce is just another way of saying a total retail management platform that offers a single view of inventory, sales, and customer data across an entire business in real time. As expected, the need for real-time data grows as sales volume and transaction complexity increases.
3) Upgrade to a line-busting POS
Perhaps the most important decision you can make to speed up your checkout process is to choose the right POS system. With so many different options out there on the market, it’s best to choose a POS that is designed for checkout speed. Particularly, look out for the following features in your POS software:
Cross-platform capabilities that let you turn any device into a station. You’ll want to ensure that your POS is mobile-friendly and that it can be run from any device. This will allow you to ring in sales from anywhere in your store when lineups get too long. Which means you can speed up the checkout process for your shoppers based on real-time demand.
Easy to navigate salescreen. Look for a POS software that is user friendly and designed for minimum clicks. Ideally, cashiers shouldn’t have to leave the salescreen in order to complete a transaction.
Fast barcode scanning. To ensure a fast checkout process, it’s necessary to choose a POS system that is designed for fast scanning speed. It’s also important that your POS software can handle multiple barcodes per SKU.
Advanced inventory search. In addition to the features mentioned above, your retail POS needs to have smart search functions and the ability to quickly recall your last search. This will give you and your employees the ability to search products by keyword, description, or tag in case labels fall off or barcodes are not scannable.
4) Train your staff effectively
Having the right POS technology and hardware in place is not enough. Retailers need to consider the people who are actually operating the technology a.k.a their sales associates!
Staff are a crucial part of checkout optimization. Which is why store owners must devote the time and resources to adequately train them. To make things easier, think about adopting a POS system with built-in training tools. This will boost employee productivity and encourage self-service while significantly reducing training costs and time.
5) Email Receipts
While digital receipts are environmentally friendly, they’re also useful in cutting checkout lines. For one, shoppers won’t have to wait for their receipt to print out. And your employees won’t have to waste time refilling the receipt printer – risking the chance of aggravating customers who are already waiting in line.
In addition to streamlining the checkout process, digital receipts also come with significant business benefits, including:
Giving retailers an easier way to build email lists and gather customer data
Helping reduce fraudulent returns
Decreasing overhead costs by eliminating printed receipts
Driving future interaction when you include links to the store website and social media
Allowing retailers to include personalized marketing message on receipts boosting customer satisfaction and loyalty
Expert Tip! Privacy is an increasingly important customer expectation. If you are collecting email lists, make sure that your POS system gives you the ability to legally collect consent for marketing directly from your customers.
We hope you found this article helpful!
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Every store owner knows that cash is king in retail. For obvious reasons, good cash flow management allows retailers to survive and thrive. It gives them the ability to purchase stock at the right time, negotiate better payment terms, deal with an emergency, hire more engaged employees, improve store merchandising, and generally reinvest back into the business.
But due to the complexities associated with running a retail store (inventory, seasonality, competitive promotions, etc.) unexpected costs can arise – and when this happens, many retailers find themselves in a cash crunch. A cash crunch can be defined as a situation in which a business does not have enough money to operate efficiently.
If you find yourself in this position, don’t panic. Below are some steps you can take to get back on track and free up cash in your retail business!
What is cash flow?
Cash flow refers to the money going in and out of a business. For a retail store, cash inflows (incoming money) include product sales while cash outflows (or expenses) consist of payroll, marketing, inventory, rent, operating expenses, etc.
If you have more money coming in than out, then your business has a positive cash flow. If the opposite is true and you have more money going out than coming in, that means you have a negative cash flow.
It’s important to remember that a business’ cash flow should not be confused with profit – cash flow represents the amount of liquidity that is available to a business at any given time. Profitability is an accounting concept which, if you are using accrual accounting methods, may not be in sync with your cash flow. For example, it is possible for you to be profitable (and therefore owe taxes according to the way you incur sales) but still be cash flow negative. As you can imagine, negative cash flow will quickly cause problems for a business if there are no financing options available for you to pay ongoing overhead costs such as rent or payroll.
4 ways to improve cash flow
1) Stay on top of customer invoices
Getting your customers to pay you on time is key to increasing your cash flow. While it is easier said than done, here are some practical invoicing tips:
Give out incentives to pay earlier: Many business owners offer their customers discounts for paying before a certain date. This helps incentivize customers to pay faster which means better cash flow for you. Along the same lines, you can also charge a late payment penalty for those who do not pay on time.
Make it easy to accept immediate payment: More and more businesses accept credit cards for even high value or B2B sales now. While there can be fairly high processing fees to accept electronic payment, cash in hand is often still worth the fees as it reduces the risk of non-payment or late payments. Similarly, you can utilize payment services such as After-Pay, Klarna, Sezzle, Affirm, etc. These so called “lay-buy” services allow shoppers to buy now and pay in several interest-free installments. The benefit for the merchant is that the service will pay you upfront vs. a traditional “layaway” where the customer picks up the item at the end of the term once the entire purchase is paid off. As expected, deferred payment for the shopper generally increases overall sales, particularly with those that don’t have credit cards, and it will allow you to book the sale much earlier, but remember that as the merchant, you are paying a significant fee for this service (usually slightly higher than credit card processing) so make sure to shop around as different companies offer different rates and terms.
Send invoices right away: If you don’t send invoices, you can’t get paid. So make sure you stay on top of on-account sales and any unpaid invoices. Remember – the faster you send invoices out, the faster the cash comes in.
Send customers invoice reminders: It’s good practice to send friendly email reminders to your customers a week before the invoice is due, the day it’s due, and a few days after. If they still haven’t paid, it may be time to give them a call. But always make sure to include a copy of the invoice and the payment options in your email to make it easier for customers to pay.
2) Review payment processing fees
While electronic payment is important to increase convenience for shoppers, retailers should regularly examine their credit card service fees. Payment processors operate in a very competitive marketplace. It’s a good idea to do your due diligence, understand your contract terms and get estimates and quotes for your processing rates. This way, you can ensure that you are not paying more than you need to. If you process a decent volume of card transactions monthly (e.g. over $100,000 worth), make sure that you negotiate for better rates before signing any contracts.
Expert Tip: Make sure you check and understand the chargeback policies for your processor. Chargebacks (reversals on charges by the processor based on claims by the shopper) can quickly add up if you are not protecting yourself (e.g. have CCTV at your checkout till as evidence to dispute a chargeback) or using methods of payment that minimize your risk (e.g. only EMV-compliant chip & PIN terminals protect you from chargebacks).
3) Take a look at your operating expenses
Cash flow management isn’t just about getting more cash to come into your business. A big part of good cash flow management is reducing the amount of cash that is going out of your business.
For retailers, the largest monthly expenses tend to be payroll, rent, insurance, and inventory. A failure to properly manage any of these cash outflows can pose a serious threat to a retail business. Below are some tips for reducing these operating expenses:
Payroll: You don’t ever want to pay your staff to sit and watch people pass your front door. If you have a few years of sales history, make sure to keep an eye on your peak and slow periods. Make sure to create your employees and assign tasks (marketing, outbound sales calls, cleaning, repair etc.) based on the expected needs of your business, not simply ease of scheduling.
Insurance: Insurance can represent a big chunk of your expenses in a given month. Due to the competitive nature of the industry, it would be wise to seek out comparative quotes and consider larger deductibles (whatever you can reasonably afford in an emergency) to reduce your ongoing premiums.
Inventory: As the largest asset for a retail business, many retailers have their cash flow tied up in inventory. Even if you are a guideshop or an online business, unless you’re only dropshipping, you will have to draw from your store inventory or warehouse stock. That’s why careful inventory tracking and management is key to good cash flow management for every retailer or wholesaler. For a good overview of inventory management essentials for retail click here. While it’s possible to use back office software just to manage inventory, it’s always ideal to use a retail POS system with built-in inventory management features that can help you ensure that the inventory you are buying is actually selling and therefore make smarter buying decisions moving forward.
4) Have a cash reserve
There comes a time where every business experiences a cash flow shortfall. It may be due to a delayed payment of a large invoice, an unexpected personal emergency, or it could just be bad weather affecting your sales. Whatever the case may be, it’s imperative to have financial resources in place in case your business experiences a cash crunch.
While some say it’s good practice to have two months of expenses saved up as a cash reserve, the fact is, you don’t want to have funds sitting in a regular bank account, not earning you any return. If you are able to set aside some cash, it’s always best to look at higher-interest savings accounts or short-term investments that will still allow you to withdraw funds if they are needed suddenly. Make sure to check with your tax accountant to make sure it is worthwhile though – various countries, states and provinces tax business investment or interest income differently.
If it’s not possible or you don’t want to put aside such a large cash reserve, you can also consider financing options such as line of credits (LOCs) or small business loans. While the idea of owing money may make some retail owners nervous, it’s important to remember that you may not be able to qualify for a loan when you actually need it. Most LOCs or SMB loans don’t charge interest until you actually draw on the funds so as long as you only keep these options for emergencies, these can be good tools to smooth out cash flow fluctuations. Similarly, always check with your local business association to see if there are any government programs available to help with small business financing. Generally speaking, low risk financing programs to support small businesses are available at all levels of government.
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So…you’re on the hunt for a new point of sale (POS) system for your retail business.
Maybe you’re unhappy with your current POS and looking to upgrade to more innovative technology. Or, perhaps you’re still using pen and paper to manage your retail operations.
Whatever the case maybe, we’ve got you covered!
In this post, we’ll explain how much a typical POS system costs and the different factors that make up that cost. We’ll cover everything from software, hardware, and payment processing fees, before we dive into how you can find the best and most cost-effective solution for your store.
Let’s get started with the two main types of POS software for retail on the market today.
How Much Does a POS System Cost?
Legacy vs. Cloud software: The price of your POS system will depend heavily on the type of software you choose. Traditional, on-premise systems usually require an upfront investment of $4,000-$7,000. While you own continued access to use purchased licenses with this upfront payment, remember that you usually only have access to the version that you purchased. This means that you will need to pay some type of fee to get access to software upgrades or support services. While upgrades are not as important in the beginning, they will eventually be required to match the security upgrades of the operating system (e.g. Windows, etc.) or integrated tools.
In comparison, modern cloud-based (SaaS) software requires little upfront investment – instead you pay a monthly subscription fee. While this fee is ongoing, it’s important to remember that the monthly cost of cloud software is often less than on-premise software once you include the reduced cost of technical support (e.g. technicians on-site, support plans, upgrade fees) and you don’t need to worry about lost data as your information is always backed up to the cloud. The monthly cost of cloud POS software varies but to really figure out how much you can expect to pay, you’ll need to consider several factors such as the number of users, stores, features, the size of your business, etc. On average, it ranges from $80-$200 per station per month.
To learn more about on-premise vs cloud POS software, click here.
Hardware: Next, you’ll need to consider your hardware costs. Remember – POS software and hardware are not universally compatible. So once you’ve decided on a software, you’ll need to have the right hardware in place to support your POS system.
With that being said, the amount you spend on your POS equipment depends on your industry needs and how you operate. Are you planning on ringing in sales with tablet devices? Are you issuing digital or printed receipts? Does your inventory volume require you to scan items at a fast pace?
A small store owner may only require one or two tablets to operate while a mid-sized retailer may need several monitors, receipt printers, and barcode scanners.
Payment Processing fees: Arguably the most overlooked costto a merchant are payment processing fees which can end up costing a lot in the long run as they are also an ongoing cost of business. This is why you should take your time to research your options.
For those who are not familiar with payment processing, every time a customer uses a credit or debit card, you will need to pay a fee to process that transaction. Payment processors such as Bambora or Global are the third-party service providers who process credit card transactions in exchange for a fee.
Some POS vendors act as their own card processors (Square, etc.) while others offer integrated payments. Depending on the size of your business, you can expect to pay at least 2.6% + a small transaction fee per transaction. Similar to your hardware, it’s best to go with a payment provider that integrates well with your POS system. Many POS companies offer special pricing if you opt to go for one of their preferred payment processors.
What to Consider Before Purchasing a POS System
Finding the right POS system for your retail business depends on your unique business needs. A POS software that works extremely well for one retail business (e.g a clothing store) may not work well for another (e.g. a high-traffic grocery store).
So, we’ve put together a checklist to help you find the right POS for your store. Here are some additional cost factors to consider when hunting for a new POS system:
1. Size of your retail operations: Most POS vendors will charge per location or store. Meaning the larger you get, the larger the cost to your business. Which is why it’s important to think about scalability when you make a decision about your POS.
Merchants that wish to scale their retail operations should opt for a POS system that is built for multi-location and high growth stores. This can help you save a significant amount of time and money down the road. Look out for the following features:
Unlimited stores, selling zones, and stock allocations
Multi-currency and multi-language features
The ability to handle high transaction and inventory volume
2. The quality and complexity of features:It makes sense that a more complete and useful system would cost a store owner more. While smaller retailers may not need to pay for robust features, mid-sized and larger merchants may have to.
Most POS systems come with tiered pricing plans. If you are looking for basic features (salesscreen, basic inventory etc.) then you can go for a lower-tiered plan. But if you require more advanced features (pricebooks, accounting integration, advanced inventory etc.) then you’ll have to go with a higher-tiered plan.
3. Open API access: If you are a growing business or already use other tools that you need to integrate with your POS, you will want to make sure that the POS system you’re looking at has an open API. Essentially, this is what allows merchants (with their own developers or marketing agency) to access backend data to integrate to or even enhance other applications they are already using. This is particularly important for a merchant looking to create or add innovative tools that improve their ability to compete. Examples of this include retailers looking to integrate their own custom e-commerce site, existing ERP system or even integrate to RFID devices to manage shrinkage.
4. Device Compatibility: As noted above,you need to consider compatibility with your existing devices when purchasing a POS. You don’t want to invest even more money and time in new hardware devices. This is more than simply whether your POS can run on certain devices, it includes whether the system you’re looking at can work with your existing credit card terminals, barcode scanners, etc.
5. Training and onboarding costs: Another important yet overlooked cost is the price of onboarding new POS technology. A POS solution that is inexpensive but difficult to use can cause your business a lot in the long run – this is especially true for high-traffic retailers that deal with long line-ups and peak periods. It is also important to consider if you are a retailer with a high turnover rate or seasonal peaks. If you are constantly training new staff members, it would be best to select a POS system with built-in training tools.
Remember – the proper POS software will not only help speed-up store operations, it will help you increase sales and can result in happier, more productive staff members.
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