Retail POS Systems

Retail Point of Sale (POS) Software Overview

Retail POS software includes tools necessary for completing transactions and streamlining operational processes. Features include inventory management and sales reporting and analytics. This software also helps retailers nurture relationships with customers by providing customer relationship management (CRM) tools.

Benefits of Retail POS Software

Retail POS software brings many benefits to retailers aside from simply completing transactions. These include:

• Sales reporting and analytics: Provides retailers with insight into their sales, helping users make informed decisions that strengthen the business.

• Inventory management: Automates stock control and helps retailers determine optimal product counts and when and how to reorder top selling products.

• Customer management capabilities: Help retailers automatically record and track valuable customer information, enabling stronger relationships and encouraging repeat business.

Competitive Advantages of Using Retail POS Software

Surprisingly, many retailers we work with at Software Advice have survived without software. In fact, 64 percent of single-store retailers we work with are operating without a POS in place.

But Excel spreadsheets can only go so far supporting the operational processes retailers need to accomplish every day. As retailers grow, software can:

• Scale the business: Key insights provided by retail POS analytics can help retailers identify the strong points of their business. This information can be used to pinpoint top-selling products and the most valuable customers to focus on in order to scale.

• Operate more efficiently: The operational efficiencies and automations provided by retail POS systems enable shop owners, operators and managers to spend more time training employees and interacting with customers.

Business Sizes Using Retail POS Software

The retail POS market easily accommodates retailer demographics ranging from small single-store operations to large enterprise retailers.

• Small: If you operate a single store, or even just do pop-up events, you're likely best suited for a basic POS system with limited hardware and advanced features.

• Medium: If you operate a growing, high-volume single store or up to five stores, you're best suited for a POS solution that enables multiple location management and features advanced reporting and analytics.

• Large, enterprise: If you operate a chain of five or more retail stores, you're best suited for an enterprise POS system with enterprise resource planning support, including warehousing, shipping logistics and advanced analytics.

Software Related to Retail POS

Many POS systems on the market today offer retailers with all the critical capabilities packaged into one solution. However, if a core capability that retailers need is missing from their POS system, they'll want to look to specialized software to fill the void. Popular specialized software includes:

• Inventory management for maintaining desired product counts.

• Sales reporting and analytics for pinpointing key performance indicators.

• Retail customer relationship management (CRM) for generating customer loyalty.

• Retail accounting for managing payroll, taxes and other accounting.

• E-commerce for setting up an online store.

Aside from software for specialized functionalities, retailers might want to consider software designed specifically for the unique needs of their business. For example:

• Restaurant and foodservice business owners often require restaurant software to process orders, print tickets, analyze ingredient availability and determine how much to charge for meals.

• Jewelers might need jewelry POS software to manage repairs and quotes, in addition to processing sales and inventory tracking.

• Consignment, pawn shop and resale store owners need specialized software since they don't own their inventories. These retailers need software with functionality tailored to their store types.

Features Guide

A List of Common Retail POS Features

Here are four core features that most all POS systems offer:

For greater features detail, check out our "What Is A Point of Sale System?" article.

Feature Details and Examples

Here are examples of what these critical tools look like with some top POS vendors:

Reporting and analytics: Highlights key data. Enables insight into sales data. Supports data filtering options for pinpoint analysis.

Reporting and analysis by Lightspeed Retail

Customer management: Helps retain valuable customers. Create and manage customer profiles. Track valuable contact information and purchase histories. Send personalized marketing and deals.

Customer management by Shopify

Inventory management: Automates the management of supply levels. Deducts inventory as sales are completed and provides alerts when inventory levels reach pre-defined thresholds. Also provides reports on inventory movement trends.

Inventory management by Vend

Employee management: Optimizes scheduling and tracks commissions (when applicable). Provides employee logins to enable clocking in/out for shifts.

Employee management by ShopKeep

• E-commerce: Many of the top POS players on the market today offer some form of e-commerce integration, either within their system or through a specialized e-commerce platform.

• Retail accounting: Manages the process of generating customer invoices and receiving payments as well as tracking all payments made to partners and vendors.

• Purchase orders: Tracks items and amounts ordered, including date of order, shipping information and progress.

• Rewards points program: Manages and tracks customer rewards programs awarded for purchase frequency or other incentive goals.

• Targeted marketing: Allows retailers to segment customers and create mailing lists based on custom criteria such as items purchased, total amount spent etc.

• Loss prevention: Monitors inventory levels and purchase orders and reports discrepancies or missing quantities.

• Variable pricing: Allows managers to automate the process by which varied prices are assigned to products, typically based on walk-in/phone orders, time of day or season.

Retail POS Buyers' Top Requested Features

Our retail advisors at Software Advice have helped thousands of SMB retailers find the best POS system for their unique business needs. We're able to analyze these consultations to determine trends in POS needs.

According to this analysis, these are the top requested POS software features by your SMB retail peers:

The Retail POS Software Features You Really Need

Depending on the number of stores your business is operating, certain retail management software capabilities take priority over others. Here are some must-have retail POS features for retailers at different stages of business:

Pricing Guide

For an accurate snapshot of what retail POS software costs, download our Retail Pricing Guide.

FAQs

What Are the Key Functions of Retail POS Software?

As discussed in the "Benefits of POS Software" section above, retail POS systems provide several key functions for your business, including:

What Questions Should I Ask Vendors When Evaluating Retail POS Products?

Here are some key questions you need each vendor to answer when evaluating their POS offerings:

Does the functionality of the system suit your specific business needs?

Create a list of must-have functionality that you need your new POS system to do. Walk through each of these with each vendor and record how many each system offers.

How much does the software really cost?

You don't want to be sold on a system based on inaccurate pricing. Figure out how much each system will cost over the next three months, six months and year.

Is your only option to sign a contract?

You don't want to be stuck paying for an inadequate system, so see if there's a monthly subscription you can agree to rather than committing to paying for a system for a year or more.

Are there any hidden fees?

Many POS system costs include payment processing fees. Some even include fees for upgrading or for tech support. Figure out all the potential costs before committing to a system.

Is any hardware proprietary?

Hardware is often just as important for a retailer as the software it supports. Determine if you're required to purchase hardware through POS vendors (which is often marked up).

Do I have options for my merchant service provider?

Merchant service providers (MSP) are a critical partner for SMB retailers. Some POS systems allow you to work with whichever MSP you prefer, while others require you to work with their partner MSPs.

What Hardware Do I Need For My Retail POS System?

These are the critical hardware tools you need to get the most out of your POS system:

Register screen: Displays transaction information and product database. Visual hub of a POS system. iPads and other tablets are replacing bulky, traditional monitors.

Barcode scanner: Automatically pulls product details, and adds price to transaction total. Adjusts inventory level once transaction is complete.

Credit card reader: Processes credit, debit and gift cards. Most new readers accept EMV readers as well as enable mobile payments (Apple Pay, Android Pay).

Receipt printer: Paper receipts provide customers with data on their purchase. Phasing out in exchange for email and text receipts.

Cash drawer: A secure place to house cash from payments.

Tips & Tools

Build a Business Case for Retail POS Software

If you're having trouble justifying the purchase of a new POS system for your business, take a look at this narrative to see how beneficial such a system can be.

Relevant Articles

Here are some recent articles about retail POS software you should check out:

• "What Is a Merchant Service Provider—And Why Do They Matter?"

• "Why Your Business Should Start Offering Gift Cards Now"

• "Improve Customer Experience in Retail Stores With New Technologies"

Popular Retail POS System Comparisons

There are many POS systems on the market that might work for your business, so we've included the following pages for you to see detailed comparisons of a few top systems:

• "Top Square Alternatives"

• "Revel POS vs Square"

• "Shopkeep POS vs. Revel POS"

Recent Events in the Retail POS Market

• Lightspeed POS launched an e-commerce solution. The new offering is called Lightspeed eCom and integrates brick-and-mortar retail with an e-commerce presence and syncs the disparate inventories as well. Lightspeed eCom has been integrated with Lightspeed Retail, its cloud-based POS solution. It also integrates and synchronizes online and retail store inventory, sales figures and customer sales data while enabling the retailer to shift stock quickly between channels.

• Samsung and payment processing provider Total Merchant Services released the Groovv POS Flex. Groovv is designed for SMBs and features a Samsung Galaxy Tab and an EMV-compliant, NFC-enabled payment processing device that is pre-programmed with software for inventory management, reporting and integrated marketing. The technology brings Samsung into the mobile POS space, as store associates can detach the tablet to roam a store with the consumer. The system connects wirelessly to peripherals, including a cash drawer receipt printer, barcode scanner and kitchen printer, so that retailers can customize their setup to match their environment and needs.

• Fujitsu launched a software solution for wearable devices. It creates a two-way, secure and collaborative digital communication platform between Fujitsu U-Scan Self-Checkout (SCO) or Fujitsu Fresco Point-of-Sale (POS) touch-screen systems and Samsung wearable devices. The software allows employees to handle their core duties, while also having hands-free access to important alerts and messages that ensure the entire store is operating smoothly. It promotes increased staff responsiveness and overall store efficiency in grocery, convenience and retail environments.