POS Systems: A Smart Solution for Every Retail Business

For almost every consumer industry and niche, retail businesses are a crucial aspect of the supply chain, serving general customers directly. They bridge the gap between wholesalers or manufacturers and consumers, purchasing commodities from suppliers and selling them to people. Retail markets have existed since time immemorial and have evolved to become more technologically advanced over time. Point of sale (POS) systems are a crucial part of any retail business that identifies and tracks inventory, processes payments and completes sales transactions.

Reportedly, the total global retail sales in 2022 are expected to reach “$29 trillion, a 4.7% annual increase. This follows a 12.1% surge from 2020 to 2021 when total retail sales increased from $24.7 trillion to $27.7 trillion.”

With the availability of huge competition in the retail market, particularly with the growth in popularity of online shopping, retailers need to provide the best possible service to the customers to stay ahead of the competition and form and retain their position in the market. Owning an all-inclusive point of sale (POS) system is an easy and effective means to offer customers excellent service while optimising operating efficiencies.

This blog sketches the reasons that make point of sale (POS) systems a beneficial component of every retail business.

Let us begin by discussing

What is a Point of Sale (POS) System?

Ideally, the place in a store where transactions take place, completing the selling and purchasing process, is known as the point of sale. Earlier, merchants or employees at a store used to process payments manually at the store’s checkout point, which in the late1800s evolved to cash registers and then to the modern-day point of sale (POS) systems.

A point of sale (POS) system is the combination of hardware and software that help complete customer transactions. The requirement of hardware components in a point of sale (POS) system depends upon the niche. However, some of the basic equipment include POS terminals, POS monitors, barcode scanners, cash drawers, payment processors, and receipt printers. Even though cash registers are still preferred by some small-scale businesses, their popularity is fading due to the availability of superior point of sale (POS) software.

The point of sale (POS) software is an integral aspect of the overall business setup as it integrates all the hardware components and hence, supports multipurpose benefits. The point of sale (POS) system not only identifies products but also calculates billing, accepts payments, generates receipts, and tracks sales. Other than these, some of the other features of a point of sale (POS) system include managing inventory, employees, and customers, reporting and analytics, and more.

Components of a Point of Sale (POS) System

There are two key elements of a point of sale (POS) system, POS Software and POS hardware and it is essential to identify every component individually to help determine the perfect business setup.

1. Point of Sale (POS) Software: 

The point of sale (POS) software is the operating system that integrates and manages all the different hardware components. There are several point of sale (POS) software options including Vend, Shopify, Square, and TouchBistro. At the same time, there are several industry-specific point of sale (POS) systems like retail or restaurants. At the same time, there is open-source point of sale (POS) software that can be customised as per your requirements. Picking the right software will help you determine the number of features your point of sale (POS) system can support.Although there are several free point of sale (POS) software options available, they come with a lot of hidden costs and offer limited functionalities. It is always recommended to purchase a paid point of sale (POS) software within your pre-defined budget as they offer several quality features and optimum service. Ensure that the software you choose is reliable and facilitates the checkout process hassle-free. Factor in your business size, the features you require, expected sales volume, and compatibility with other point of sale (POS) hardware components that you own. Enterprise businesses usually require a complex point of sale (POS) software compared to small businesses.

There are two types of point of sale (POS) software depending on server location:

On-premise point of sale (POS) software:

On-premise point of sale (POS) software is also known as a local, traditional, or legacy point of sale (POS) system that is installed and stored directly on a server in your store. This cannot be accessed by outside devices as this point of sale (POS) system runs on a closed internal network, making it reliable. It can be used offline too. Usually, this type of software comes with a high upfront cost for the initial installation and requires a good-sized server; however, there are no monthly recurring fees involved. But, there are certain maintenance and software updating charges which will require technical assistance. Since the hosting is local, you can only access data directly from the store but not remotely. You would also need to take data backup from time to time.

Cloud-based point of sale (POS) software :

Ever since the introduction of the cloud, its application has reached different areas including point of sale (POS) software. This type of software is a form of Software-as-a-Service (SaaS) where you can host all the point of sale (POS) data in a remote server on the cloud. Not only it can be setup remotely but can also be installed and accessed from any location online. You can save immense time and effort with regularly scheduled updates and data backups. The installation cost for cloud-based point of sale (POS) software is low with monthly or annual subscription fees. Even though the update costs are involved within the subscription fee, you would have to upgrade your subscription plan with your business’ growth. To operate this type of software, you would not require any specialised equipment or architecture because the hosting is done on a remote server. Hence, all you require is a robust point of sale (POS) terminal and a stable internet connection. This point of sale (POS) software is flexible and supports integrations. The only limitation of cloud-based point of sale (POS) software is its dependency on the internet. In case there is a disruption in internet connectivity, the overall performance of the point of sale (POS) system will be affected.

2. Point of Sale (POS) Hardware:

To complete every stage of the transaction process, be it, identifying the chosen product and price, to billing and accepting payments. Ideally, a POS terminal, Monitor, barcode scanner, cash drawer, payment processor, and receipt printer comprise the basic hardware components. But, you can add some additional components depending on your business requirements, such as extra monitors, weighing scales, or self-service kiosks. Just ensure that the hardware components you pick are compatible with your point of sale (POS) software to ensure optimal performance.

Know that the hardware components are available in different price ranges to suit different budgets. Hence, you would have to invest hugely in the hardware components while setting up a new point of sale (POS) system. Advanced point of sale (POS) systems are flexible and more hardware components can be incorporated depending on requirements. Therefore, purchasing quality point of sale (POS) hardware components is essential for the smooth functioning of a point of sale (POS) system.

We have enlisted the basic hardware components of a point of sale (POS) system:

• POS Terminal:
  
  The register, often referred to as the point of sale (POS) terminal, is one of the most important components of a point of sale (POS) system as the point of sale (POS) software is installed here. Through this interface, the point of sale (POS) software is operated and connects with the other point of sale (POS) hardware components. Tablets, iPads, smartphones, laptops, desktops, and dedicated point of sale (POS) devices are popularly used as point of sale (POS) terminals. Retailers these days prefer portable, touch POS terminals because of their mobility and convenient usage.
• POS Monitor:
  
  The point of sale (POS) monitor is used to display transaction-related data that helps avoid errors whole enhance speed. Monitors can be either a touch screen integrated point of sale (POS) terminal that comes with an in-built monitor or you can purchase a monitor separately in case you have a terminal without a monitor. The point of sale (POS) monitor helps maintain the transparency that in turn builds a better customer relationship.
  
  
• Barcode Scanner:
  
  If you have a barcode system, a barcode scanner is a must-have device. They help expedite checkout processes, especially multiple items as they can identify product-related information. Barcode scanners (for example, a cordless barcode scanner ), as the name suggests, are used to scan, read, and decode product-related information and display them on the monitor. Barcoding your inventory will help you track and manage your sales, identify the products that sell the most, and notify you about the products your need to restock.
  
  
• Cash Drawer:
  
  Cash drawers (for example, a serialUSB Cash drawer) are another essential hardware component of a point of sale (POS) system. Even though cashless payments are trending these days, there still are customers who prefer paying in cash. Hence, cash transactions are quite unlikely to go out of trend any sooner. To store these cash payments securely, you would require a sturdy device; hence, a cash drawer is required. These devices come with multiple compartments and slots that not only help store cash but also other bills and receipts safely and in an organised manner. You can also provide appropriate changes to customers that would help expedite the checkout process. Cash drawers are available in different sizes and come with different numbers of slots and compartments. These devices are usually connected to the point of sale (POS) terminal and the receipt printer, and open and close on receiving a command from the operating system, which then signals the receipt printer to print the payment slip.
  
  
• Payment Processor:
  
  A convenient payment process is a key factor to enhance customer satisfaction. Offering customers the convenience to make payments as per their preferences can help enhance sales in a retail business, thereby bringing in repeat customers. Other than cash payments, customers prefer credit/debit card payments and contactless payments via apps or digital wallets. Hence, you will require EFTPOS or Electronic Fund Transfer integrated with your point of sale (POS) software that can read and swipe cards. Most Australians however prefer credit/debit card payments; but, depending on your niche, location, and target customers, you can provide them with additional payment methods.
  
  
• Receipt Printer:
  
  Like barcode scanners, receipt printers are an essential component of a point of sale (POS) system as these devices help print purchase-related payment slips that act as proof of transaction. These receipts include purchase-related information like product name, date and time of purchase, price, and more. Even though customers prefer digital payments and e-invoices, there still are customers who prefer physical receipts, particularly in retail businesses. These receipts also help customers return/exchange their purchased products. Primarily, there are two types of receipt printers, thermal receipt printers and dot-matrix/impact receipt printers that function on different technology and are available at different prices. Dot matrix printers are suitable for warm environments and can print multiple copies of a single receipt. But, they are noisy and provide poor-quality prints. However, kitchen printers are usually dot matrix printers. Thermal receipt printers on the other hand offer better printing quality and are fast and quiet, making them perfect for retail environments.

Now that we have enumerated the different components of a point of sale (POS) system, let us discuss how point of sale (POS) systems benefit retail businesses.

Advantages of Point of Sale (POS) System in Retail

1.Inventory Tracking across Multiple Outlets: Using an integrated point of sale (POS) system allows retailers to track their inventory across several stores in different locations. Hence, you can check stock availability in every store. As a merchant, you can find out the availability of any product your customers are looking for, check when certain products are running out of stock, and find out which products are selling better and which items need to be re-stocked.

2.Enhance Customer Experience: Point of sale (POS) systems allow business owners to provide an enhanced customer experience. This solution allows business owners and employees to find products the customers wish to purchase quickly. At the same time, there are self-service kiosks that allow customers to purchase the product of their choice on their own, without any assistance from store employees. This enhances the shopping experience for the customers.

3.You Can Take Businesses Anywhere: The introduction of a cloud-based point of sale (POS) system will help you access your sales from any location, at any time, through any mobile device. Hence, you can track your ongoing transactions, and inventory, or monitor sales data.

4.Ensure Customer Data Security: You need to handle customer’s credit card information securely. Cloud-based point of sale (POS) systems ensure the entire customer’s information is stored securely. Since the data is stored in the cloud, the risk of data loss due to any anti-virus or damaged systems should be eliminated.

5.Provide Complete and Precise Sales Reports: Point of sale (POS) systems help generate accurate and complete sales reports. These reports include the total number of products sold, profit made, etc. Using a point of sale (POS) system helps minimise human errors, ensuring all the data you have is accurate and precise.

6.Facilitate the Return Process: A comprehensive point of sale (POS) system will help facilitate the product return process. In an offline purchase, customers can return/exchange their purchased product with the help of their receipt. On the other hand, during an online purchase, when a customer cancels any purchase, your point of sale (POS) system will process it easily in just a few clicks and the stock that was reduced will increase automatically after the purchase is cancelled successfully.

Wrapping Up,

The availability of immense competition in the market makes running a retail business difficult. The introduction of industry-specific point of sale (POS) systems can help retail businesses provide efficient checkout processes, customer relationships, inventory management, inventory management, employee management, and more.

If you are looking for premium point of sale (POS) hardware components, POS Sales Australia is your one-stop destination for leading point of sale (POS) hardware, consumables, and accessories, all available at competitive prices. If you are confused about choosing the right brand to suit your business and budget, get in touch with our experts who will provide personalised assistance with your shopping experience.

For more personalised assistance with your shopping,  get in touch with our experts who will help you make an informed decision.