Launching a new retail business is as exciting as it is exhausting. After you’ve created your business plan, defined your brand, and designed the perfect logo, it’s time to look at the management and logistics side of things.
If you’re starting a retail business online that also involves a brick and mortar location (or selling in person at trade shows, fairs, markets, etc.), then you’ll need a way to track all product sales (physical and digital) accurately. This is where the value of a rock-solid POS platform comes into play.
A POS system (standing for “point of sale”) is the hub of a modern retail or food service operation. It helps you do you everything you need to in less time, making your life as a retailer easier. Here are five key ways a POS system can support your business:
1) Inventory control and organization
Whatever you’re selling, the importance of having control of your stock can’t be stressed enough. Last year in the U.S., the National Retail Federation reported that loss of inventory reduced the bottom line by $46.8 billion across the industry. Your items are the money you spend, the money you earn, and what attracts customers to your store. In other words, your stock is your business.
Bad inventory management and tracking hamper a retailer’s success due to a lack of organization and a lack of visibility. When it comes to being organized, you have two options: you can spend hours sorting out the back office and marking down the number of items you have in a giant register or spreadsheet, or you can let a POS system do it.
Point of sale systems sort out your stock with categories, tags, serial numbers, and SKU IDs — and since you’re ordering from the system too, there’s no manual work involved. When a customer wants that last orange top in a size small, you can use the search function in your POS system to see if it’s in the back, preparing you for any inventory situation in real time.
2) Business data and forecasting
Let’s get it out of the way: data is not only for big chain stores. POS systems give you an opportunity to gain insights into how well your store is doing. Knowing how much money you made last week is great, but to build long-term success, you have to know more than that. How much did you spend last month? Why was last week particularly more successful than the previous? What items are moving quickly? What’s not selling?
Answering data-driven questions like these is a full-time job, and very few retail owners have a background in business data analysis. A POS system monitors your business, and it usually comes with performance reports that let you see the big picture in a clear and digestible format.
3) Customer insights
People have more options of where to shop than ever before. Almost everything we look at is an invitation to buy something. Your challenge is to make sure they pick your product, not Amazon’s (unless, of course, you sell on Amazon).
Branding plays a huge factor in influencing customers’ buying decisions, and getting that right will have long-term benefits for your business. Keep in mind that a brand is more than a logo — it’s the overall perception of your business.
If you asked a retail owner if they’re satisfied with their own customer service, a majority would likely say yes. But Bob Phibbs (a.k.a The Retail Doctor) has some bad news: only 13% of customers agree. Shoppers want to feel taken care of, but it can be difficult to take care of someone you don’t know. And you can’t know every customer — but a POS can.
With centralized customer insights like purchase history, favorite items, and individual profiles, you can collect and display transactional history and information to serve each customer better.
4) Staff empowerment
Another obstacle to building long-term relationships with customers is staff turnover — a common problem in the retail and restaurant spaces.
As much as brand loyalty plays a part in repeat business, the one-to-one relationship between your staff and customers often makes a more significant impact. Luckily, there are ways to reduce its impact, yet it’s still a reality you don’t have total control over.
The best POS systems are mobile friendly with a dedicated app or responsive design, enabling your staff to help customers on the sales floor with a device like a tablet in hand. This gives them easy access to all the answers customers may want, boosting confidence for new employees and an improved user experience for shoppers.
5) Integrated ecommerce
Now that 9 out of 10 purchases start with an online search, having an online presence is essential to a store’s success. Not only does the rise of ecommerce mean new sales opportunities, but it also means more work for retailers, who’ve previously had to manage the two as different businesses channels (often within different platforms).
An omnichannel POS system can take your physical stock and push it to your ecommerce platform. The result is inventory which is synched in-store and on the web.
Remember: shoppers don’t shop in-store or online — they just shop. Having a POS system that’s ecommerce-ready will ensure your numbers are up-to-date and consistent, regardless of where the transaction took place.
That’s it! Though it may seem intimidating to make the transition to a new POS system as a retailer, chances are it will help you run your business more efficiently, make smarter decisions, and adapt to change more effectively.
This blog was contributed by Malik Kane from Lightspeed.