JUMP TO SECTION:
- General Retail Industry Overview
- Trends in Retail Store Traffic
- Retail Technology to Invest In
- How a Retail POS System Streamlines Operations
- Retail Business POS Software
- POS Terminal for Retail
- How to Choose a Retail POS System: Checklist
- Omnichannel’s Impact
- Improving the Customer Experience
- Make More Sales
- How to Increase Sales With Contactless Solutions in Retail
- Crucial Retail Technology for Future Success
- Retail Theft: Why Invest in Updated Retail Technology
- Running a Successful Retail Business
Running a competitive, profitable retail operation requires a basic understanding of retail technology. Without the know-how, you risk not being able to really utilize your solution to its full potential. When you understand all the features, functions, and options for your point of sale (POS) system, you will be empowered to select the solutions that help your business grow, and leverage them for better profits.
Here is an in-depth guide to retail POS systems.
General Retail Industry Overview
The retail industry is always evolving, and retail technology evolves right alongside it. With the fast-paced nature of this ever-changing industry, retailers need to put technology solutions in place that can help their business keep up.
A retail POS system is one of the best tools in a retailer’s tool box to help them stay competitive. Much more than a simple cash register, a retail POS system serves as the backbone of your technology infrastructure. Your POS can be used to streamline operations, automate processes, and provide real-time visibility into your business, allowing you to make more data-informed decisions.
TRENDS IN RETAIL STORE TRAFFIC
Online shopping was already on the rise pre-pandemic, causing a decrease in brick-and-mortar store traffic. Amid the pandemic, this trend has persisted if not accelerated. However, physical store locations will never go away as long as business owners adapt to consumer needs. As long as they understand what their consumer’s needs are, they can stay relevant and successful, despite the popularity of online shopping.
Overall in-store traffic decreased, but rising again
Due to the pandemic, many customers have made the choice to shop online to avoid contact with others. This shift has led to a decrease in in-store traffic; however, since some restrictions have been lifted, in-store traffic is slowly returning to normal—though it’s nowhere near what it used to be. This has caused retailers to adjust their inventory and labor needs to match the new traffic levels; ordering too much inventory or overstaffing will cost you major dollars in the long run. Retailers can now use data from their POS to help them better forecast their inventory and labor needs early as the virus continues to affect retail operations.
Shifts in consumer preferences
Retailers must remember that the virus has affected consumers lives along with their shopping preferences. Many customers have been laid off and aren’t as willing to spend money. When they do, they’re more careful than ever about how they spend it. It is critical that you offer value for the price you charge if you want customers to shop in your store. Use this time to track your sales carefully so that you can identify which products are top sellers and what areas of inventory you can cut to reduce your overhead costs.
Transparency is crucial
The virus has transformed shopping from a leisurely activity to a necessity. Now, many customers only venture out to stores when absolutely necessary and buy more items per trip than ever before. It is critical for you to ensure that your inventory counts are accurate and remain transparent; no customer wants to travel all the way to your store under the belief that an item they need is in stock, only to find it missing from the shelves once they arrive. Every store owner should invest in inventory software that delivers real-time inventory information and can automatically update what is in stock.
Safety is top priority
Customers concerned about their safety will only shop at stores that have implemented protocols that will help keep them safe. You can find a number of ways to increase safety within your store, such as directional signage and foot traffic patterns for traffic flow. These methods can also help you promote strategically placed products when you optimize your in-store layout. Other ways to increase safety include turning to shop-by-appointment, limiting in-store capacity, and even implementing new technology such as self-service kiosks or tablet POS systems to limit interactions between customers and staff.
RETAIL TECHNOLOGY TO INVEST IN
Retail POS is a multi-faceted solution that combines many different forms of helpful technology. As the industry advances, some functions and integrated solutions are becoming necessary in order to stay profitable.
Mobile point of sale
Also known as mPOS, this is becoming increasingly useful for retailers looking to boost engagement, productivity, and service. This solution allows you to offer a better customer experience that rivals that of online retailers. Your employees will be able to instantly look up information on pricing, inventory, and customer purchase history. They can also ring a customer up from the sales floor, allowing them to skip the line.
Real-time management software
This allows you to closely monitor sales data and performance, providing valuable data on customer preferences, purchasing patterns, demographics, and more. You can see which items are fast-moving and which are slower, so you can run better promotions and keep the right inventory on hand. It also helps with staff scheduling, by letting you know who your top performers are and when your busiest hours are.
Recruitment and onboarding solutions
Back office technology is just as important as the tech you use on the sales floor. In an industry with such a high turnover rate like retail, recruiting, hiring, and filing paperwork for employees is time-consuming and prone to errors. This technology assists with recruitment and on-boarding, while also automating payroll, benefits, and tax management processes.
How a Retail POS System Streamlines Operations
Advanced retail POS technology has allowed business owners to automate many processes and streamline many others. Rather than manual processes which slow you down, you can leverage retail software in a number of ways:
Taxes are complex, especially if you do business across several states, since the tax in individual items can vary from state to state. Retail POS tracks tax and does all the math for you, applying the correct figures for taxes, shipping, and handling.
With mPOS software, you can ring up transactions anywhere inside or outside your store. This is helpful for speeding up transactions on the sales floor, implementing pop-up stores, or even expanding the number of locations you operate.
Enhanced inventory and order control
POS software provides a database that allows merchants to keep tabs on every item within their inventory. As items are purchased, the inventory count is adjusted in real time, eliminating the need to conduct manual counts or pour through long lists.
Your POS solution can be used to provide deeper visibility into many different areas. Beyond that, it can help you manage the data you collect, and understand how to use it to increase your revenue and cut costs.
Customer relations management software (CRM) is a critical tool lately, as merchants are relying heavily on customer data to create more effective personalized promotions and boost customer engagement. This helps you build loyalty and increase sales.
Beyond inventory, labor is your biggest expense. Managing it effectively is necessary for a successful operation, so this software is especially useful. You can easily build and enforce schedules, forecast your labor needs, and optimize worker hours.
Retail Business POS Software
When it comes to selecting the right software for your business, you need to carefully evaluate your needs and see which challenges you want to address. There are a few questions you should ask yourself:
What are your must-have software features?
Do you need a solution that can maintain a database of customer preferences? Do you need automatic order-generating capabilities? List out areas where you are struggling, and look for software with the features to help you overcome these obstacles.
Which retail POS solutions are your competitors using?
Look to see what businesses with similar sizes and clientele are using to understand how POS software could work in your own store. See if you can find out how difficult the solution was to deploy, and what the reviews say as far as the value it provided.
Training and support for your options?
Don’t waste your time with vendors that don’t provide installation, data conversion for your existing POS, and remote and on-site support whenever you need it. These services will be indispensable, and will have a large impact on how well your system performs.
POS Terminal for Retail
The terminal component for retail POS refers to the actual hardware that houses the system. What you need will largely depend on how you plan to use it and the environment you will use it in. Here’s what you need to consider:
How many transactions do you expect the POS terminal to take daily?
The processor you choose should be powerful enough to keep up with transaction volumes. Without adequate processing power, each transaction will take longer, which can lead to longer lines and disgruntled customers. A CPU with 1.86GHz processing speed will do for light to moderate store traffic, but anything heavier will require closer to 2.0GHz.
What types of payments do you plan to process?
Your customers will likely have a variety of payment methods they prefer, such as cash, credit card, and mobile wallet. You want to ensure your hardware is equipped to handle each of these payment methods quickly and securely, especially when it comes to credit cards. Choose an EMV-compliant terminal to protect against fraudulent charges.
How tough is your environment?
High-traffic, harsher retail environments subject to harsh temperatures, dust, moisture, or other factors will need a much more rugged system capable of withstanding these elements. In general, a ruggedized system is recommended, which will last far longer than any consumer-grade option.
Are you expecting to grow within the next 5 years?
Even if you aren’t planning to expand, such growth may happen regardless. Select a scalable terminal that can grow with your business—one that can upgrade to include new components and capabilities as needs arise.
How to Choose a Retail POS System: Checklist
Once you have narrowed down your options for your retail POS system, it’s advisable to run through a final checklist to ensure all of your bases are covered. Some items you may want to include are:
Compatibility between software and hardware
Run through your list of options for both hardware and software and see which are compatible with each other. If they aren’t compatible, your system won’t function properly. Look for compatibility between your current choices and any solutions or peripherals you may want to add in the future, as well.
Peripherals and add-ons
What peripherals does your business currently need? Things like PIN pads, barcode scanners, cash drawers, and equipment for data backup are all important components of a retail operation. Specialty retailers may need additional peripherals beyond the basics, like scales for bulk food stores.
Look beyond the up-front cost and evaluate the total cost of ownership, and whether or not that fits within your budget. The average industry investment is 2%-3% of annual sales. Factor in things like ongoing hardware maintenance and software support.
Choose a reliable operating system that is both powerful and intuitive. For retailers, Windows OS is the most popular by far. This tried-and-true system is extremely secure, but also offers an easy-to-use interface that speeds up tasks.
Demo prior to purchase
Make sure you see your retail POS system in action before you purchase it. A trusted vendor will offer a demo, which is the most important step in the buying process. This gives you a “hands-on” way to view the functionality and ease-of-use to see if the solution is a good fit.
More and more often, retailers are finding that running an omnichannel operation is the best way to move forward successfully. Omnichannel means that each channel through which a retailer sells can operate as a single cohesive unit.
Omnichannel arose due to changing consumer preferences. Shoppers are looking for consistency, flexibility, and convenience above all. With retail being as competitive as it is, business owners can no longer afford to run channels as disparate entities.
How to practice omnichannel
To run a successful business that maintains seamless consistency across all channels, you’ll need a retail POS system that provides a singular view of SKU-level inventory for all locations and channels. This information should be accessible to shoppers as well.
Understand the shopper’s journey
Knowing what shoppers are really looking for will help you improve your customer experience through all of your channels. Understand your customers, and you can understand what they want. You need to know:
- Who is the shopper?
- How do they plan their purchases?
- How do they prefer to shop?
- What do they want at the point of purchase?
- How do they evaluate items after they’ve been purchased?
- What effect is mobile technology having on the shopper’s path to purchase?
Improving the Customer Experience
Preferences are always changing. Perfecting the customer experience is a never-ending journey, but that doesn’t mean you have to rely on guesswork to figure out what customers want. Here are some tips to help:
Experiment with new programs and services
Many successful retailers are implementing buy online/pick up in store (BOPIS) or “click-and-collect” models, much to the satisfaction of their customers. These help bring in additional foot traffic, while still offering shoppers the convenience of purchasing online. Other retailers are offering subscription boxes, which is an ongoing trend that shows no signs of dying down. Don’t be afraid to experiment with new services and see what your customers like.
Keep an eye on trends
There are many trends disrupting the retail industry. Some are being leveraged to provide experiential retail that is just as focused on the shopping experience as it is the actual products offered. Some current trends include:
- Mobile use
- Social video
Plan the right strategy
Determine which avenues you want to take to improve the customer experience, and equip associates with the right tools to get the job done. If you want to improve the in-store experience, tablets are great retail POS devices that can give your sales staff more mobility. They can leverage these to provide information to customers or ring up sales on the sales floor.
Self-service touchpoints are also a great way to upgrade your experience. Rather than finding a sales associate, customers can use these to look up product information, or even ring their own sales up.
It’s important to note that different demographics look for different experiences. What drives baby boomers may be completely different from what Gen Z is looking for. When considering your communications, your brand image, and your business practices, make sure these align with what your demographic cares about.
Make More Sales
When you implement the right retail POS technology, you will be empowered to make more sales. Just make sure you pay attention to other areas of your business to ensure you are maximizing your profits.
Hire the right staff
Your staff has a massive impact on the overall customer experience. Make sure they have the knowledge, training, and personality that will allow them to thrive in your business. Know what you are looking for, and understand how to weed out poor candidates.
Train your good people well
Make sure your staff clearly understands their roles and responsibilities. Don’t just train them on how to go through the motions. Cover a variety of topics in your training, such as:
- Interpersonal skills
- Product knowledge
- Answering customer questions
- Being available to help customers
Upselling and cross-selling
If you aren’t currently upselling or cross-selling, you’re missing out on potential revenue. Upselling means offering a more expensive, upgraded version of the item already in your customer’s basket. Cross-selling means offering additional relevant products to complement items in their basket. Make sure your employees are trained on how to upsell or cross sell effectively.
How mobile retail POS can help
Beyond training staff, you can use your retail POS system to assist with upselling and cross-selling. You can use tablet kiosks to broadcast advertisements or showcase items frequently purchased together. You can also equip staff with tablets, so they can quickly access information that can assist them in making a sale.
As restrictions lift and stores begin to reopen their doors, it is important for retailers to make safety a priority. In order to encourage hesitant customers to return to in-store shopping at your location, it will soon become necessary to implement contactless solutions to reduce face-to-face contact and help minimize the spread of the virus. Kiosks and fixed tablets are excellent solutions, especially with frequent sanitization efforts. Beyond improving safety, these contactless solutions can increase sales. Here’s how:
Endless aisle capabilities
Due to social distancing restrictions, many customers have become accustomed to endless aisles, an online customer experience that has been difficult to replicate in-store until kiosks and fixed tablets emerged. By placing kiosk and fixed tablet technology throughout your store, you can effectively provide customers with endless aisle capabilities. Customers will be able to search your inventory and place orders for curbside pickup or delivery on their own in case you don’t have an item in sock. You can also utilize kiosks and tablets to upsell and cross-sell with automated prompts.
Elicit customer feedback
As you reopen, it is important to ensure your customers are satisfied. Kiosks provide an easy way for customers to share their feedback with you. Acting as a registry, the kiosk can ask the customer questions and can be included at the end of transactions in-store while their experience is fresh in their minds. You can then harness this data and analyze it to help you make improvements to your customer service and create more effective promotions to keep customers coming back for more.
Help customers find their way
In order to reduce the risk of contracting the virus, customers are less likely to browse your store for an extended amount of time. By strategically placing kiosks throughout your store, customers can have a way to quickly look up item locations without wandering around or asking an employee face-to-face. This will ultimately give the customer more control over their experience and increase satisfaction.
Kiosks are not replacements for employees; however, labor costs are one of your biggest expenses as a retailer. When employees can’t work due to illness, injury, vacation, or other reasons, kiosks can take over day-to-day tasks such as:
- Answering basic customer service questions
- Checking the price on items
- Offering sales and promos
- Helping customers locate products
- Encouraging customers to apply for a credit or loyalty card
- Allowing customers to self-checkout
Kiosks are useful even when fully staffed; while your kiosk takes care of smaller responsibilities, you can reallocate your labor to more profitable areas and ensure your customers receive a satisfactory experience.
Make customers feel more comfortable
With proper sanitization methods in place, contactless solutions reduce face-to-face interactions, thereby reducing the spread of harmful pathogens. While this is especially important amid the pandemic, health and hygiene will remain important for customers long after the virus passes. Contactless solutions like kiosks will help make your customers feel more comfortable and safe shopping in your physical location.
Rugged mobile point of sale tablet technology
Mobile tablet technology will only grow more prevalent thanks to social distancing efforts. In fact, it will become a necessity to any business who wants to provide effective curbside service; mobile point of sale allows staff to ring up customers and process transactions curbside so customers never have to enter the store, minimizing traffic and face-to-face interactions. Mobile tablets can also help bust long lines at checkout by enabling staff to checkout customers anywhere in the store.
With self-checkout rising in popularity long before the pandemic, customers will expect businesses to offer self-service kiosks long after. But self-checkout isn’t the only service kiosks can offer your business. They can be utilized by customers to look up inventory in-store if an item they want is out of stock. They can also look up their membership information, registries, and browse items with endless aisle capabilities.
Contactless payment technology
Health and safety are on your customers minds; making them feel as safe as possible in your store will only enhance the customer experience. Offering contactless payment technology in retail environments will allow customers to make purchases without coming into direct contact with staff or a frequently touched card reader. With near-field communication capable hardware installed, you can accept payments from a safe distance as well as offer customers the convenience of payments through mobile wallet apps like Apple Pay and Google Pay.
Safety measures don’t always take the form of technology. Retailers will need to adopt additional hardware to keep their employees safe, such as installing plastic shields. Since it’s not always possible to stay 6-feet away from customers at all times, plastic guards will ensure that staff are protected—especially at the checkout counter. Plastic shields will protect employees from customers who have forgotten their face mask or accidentally cough at checkout. Further, plastic shields can be quickly and easily sanitized.
Shop by appointment
Many retailers are adopting scheduling software often used by salons and spas to control the number of customers in their store at a given time. Having a capacity limit will minimize face-to-face interactions among customers and reduce the risk of virus spread. It will also eliminate the need for customers to form a line outside when your store is at max capacity.
Due to the pandemic, scammer activity has increased, affecting retailers’ shrink percentages. Attempted theft including gift card scams, self-checkout robbery, and other scenarios have become more prevalent amid the economic unrest. Although theft isn’t a new phenomenon, it is amplified in conjunction with financial insecurity, uncertainty, and high wealth inequality.
Technology is advancing for good and for ill
While technology solutions have helped many industries through the pandemic, there is a dark side. Advancements in technology have also made it easier for people to harm others through code spoofing and cybercrime. Thankfully, technology security has developed alongside these problems; however, technology will always be used for good—and for ill.
To combat retail theft, it’s important to identify which areas you are most vulnerable to theft attempts. By looking at your data insights, you can learn where loss and prevention is preventable and where it is most predominant. According to the 2020 National Retail Security Survey, retail business participants stated that 49.3% of theft is from in-store only sales, 26.1% from online-only sales, and 18.8% from multi-channel sales. In the same survey, the average dollar loss per dishonest employee increased by more than 61% between $500 and $749. Although these aren’t astronomically large amounts of money, they add up over time and can affect your bottom line.
Invest in the right tools
As technology advances, so do security solutions. Monitoring technology and intuitive POS systems are valuable investments for retail business owners to prevent loss prevention problems. According to the Security Survey, the top five loss prevention systems used from a retail business have increased between 3-16% since 2019. These systems include burglar alarms, digital video recorders, live customer-visible CCTV, armored car deposit pickups, and POS data mining. Retail business owners should also invest inventory tracking and employee accountability features to prevent internal and external problems and reduce shrink percentages.
Running a Successful Retail Business
In this day and age, retailers are faced with the never-ending task of staying competitive, which can become complicated when trends and preferences are always changing and evolving. Fortunately, you don’t have to do everything yourself. Retail POS technology has become so advanced that it can automate many tasks, improve the customer experience, and provide the right data to help you grow your business.
Touch Dynamic offers powerful, reliable retail POS systems that are hand-tailored to your industry. For more information on how we can help you run a better business, contact us today.