A question I’m asked frequently is how to select the best Point of sale (POS) system software. It’s important because a point of sale system for small businesses can make the difference between knowing what is going on and being left behind.
Understanding POS systems
Point of sale systems for retail stores are easy to grasp: they monitor every function of your location and interface with all data around your customers.
The more data you have and interconnect, the more you can do with the employees and merchandise you have and the better you can target your customers. That's how you grow your retail sales. I thought everyone understood that...
But I had breakfast with a group of retailers and I asked them what kind of retail software point of sale systems they were using.
One sheepishly replied, “None.”
I tried to wrap my head around why a retail store owner would say that. His excuses were everything from not wanting employees to know how much they were selling, to fear of new technology, to liking the simplicity of just using a cash drawer. Yikes!
Successful retail stores rely heavily on their software
From online fulfillment systems to buy online pick-up in-store (BOPIS); from tracking loyalty and employee hours to marketing via text and email messaging.
It is impossible for a retailer to grow without investing in software and technology. Anarticle by PC Magazine found negligible differences between five major POS providers, so it’s not that they aren’t all good, it’s how their offering works for you.
Therefore, the first question you should ask a potential POS vendor is simple, "How can your software improve the efficiency and profitability of our business?"
From their initial answer, you’ll want to ask the following list of questions. And these aren’t just random questions but ones I validated from retailers who wished they’d asked many of these questions before they purchased their system. They even added some of their own.
Be sure you gauge your prospective new POS provider’s answers using a grading system as you ask these questions.
5 – Absolutely yes
3 – Sort of
0 – No
48 Must-Ask Questions when buying a POS system
I've split the questions into several categories:
A full-featured POS system can show you what the busiest times of your week are so you know how to schedule.
With robust reporting features, you can understand which are your best-selling items and which are not. You can also learn the percentage of customers who are new versus returning.
But remember, reports are only good if you actually use them. You want the information you need most to be automatically emailed to you each week so you can spot trends and opportunities in both merchandise and employee performance.
These are the questions to ask in this area:
Can I schedule necessary reports to automatically email at the end of each week/month?
Will I have the ability to set store goals and employee goals and track performance against those goals automatically?
How do you store my customer data safely?
Can I order directly from the POS based on inventory alerts and reports?
How do we keep track of individual sales; do we have to log in each time, swipe a card, etc.?
Do you have specific options by category -like shoes or apparel- where colors or customization of one product has dozens of varieties?
Can I access the system remotely?
Does your system update automatically or do I have to do it manually?
Do you have the ability to integrate fitting room technology like Alert Technologies and traffic counting software like ShopperTrak?
Do you offer custom fields that are both searchable and exportable?
Do I have the ability to enter the cost of goods (COGS) to see my margins by category and brand? If so, are there levels of access to that information?
Do I have the ability to see what is on order by department and by store?
A big component of any POS system is how they take care of you after the sale – not the sales representative’s initial pitch. You don’t want to have to call support just to get the information you’re looking for. So ask these questions:
What other retailers can I ask for service recommendations about your support?
Is your POS system scalable if we add locations or terminals?
Do you offer a transition team from our old POS system to yours? (Even if they charge a fee, it’s worth it.)
Do you offer 24/7 technical support and where is it based?
While the POS will likely be cloud-based, does it have failsafe backups so if it goes offline, I can still make sales?
Transitioning from our old system, can you import our previous database? Is there a charge?
How will you offer testing and validation once our old system is updated to yours?
What if there was a catastrophic failure, how often does your system back up and what does it take to restore service?
A great POS system will collect data into what is called a Customer Relationship Management Program (CRM) so you can interact with customers on an ongoing basis.
Being able to send emails or text messages has become imperative for brick and mortar retailers looking to compete with online retailers. Ask these questions:
How will you integrate our existing CRM or do you offer a better CRM?
Do you offer an integrated loyalty rewards program between purchase, rewards, and CRM?
Can I query sales by brand and category to create personalized mailings and emails?
Will your system update contact records with opened and clicked emails?
Do you offer a scheduling option so employees or designers can set appointments?
POS systems in the future will be simply reading RFID tags embedded in each item so associates will be unable to change item prices on their own. You will also have a reader which scans the store in a few minutes and inventories the complete store.
Until then, you’ll want to have to do as little as possible to maintain your inventory. Questions to ask here are:
How can you make inventory easy if I have multiple locations?
How can I transfer and receive merchandise between two stores and keep them separate for budgeting?
How will you integrate with our online store seamlessly to give me a total view of my inventory?
When products are entered in the POS, can you automatically update my website with in-stock totals?
Do you allow having a negative inventory? If so, how is that reconciled?
Don’t forget, the first function of your POS is still to function as a great register. The days of a separate credit card machine are over. Your new POS should be able to integrate with your credit card processor so all data can be tracked and recorded.
Ask these questions:
Can I easily look up past purchases by customer size and style?
Will it allow me to offer store credit or gift cards instead of just refunds?
Does it have the ability to connect to various receipt printers or tablets? What about emailing receipts to customers?
Does it have the ability to view full customer history data from more than one store?
How do I run comparative sales reports by category, vendor, and item altogether?
How easy is it for my employees to learn your POS system? Do you offer on-demand video training or am I stuck with manuals?
Do you have multiple ways to look for my previous customer history by last name, phone number, or email? I don't want multiple entries for the same customer.
How does your system comply with PCI (Payment Card Industry Data Security Standards) and EMV cards?
If I decide to stay with my current payment processor, which means you’ll have an additional hassle to figure out who to call if something goes down, does your POS system offer integrated processing?
How does it accept NFC payments like Paypal, Apple Pay, and the rest?
Will your POS system sync to my existing bookkeeping software?
Will your POS system automatically add units if I oversell?
Can I reprint receipts if someone comes in without theirs for a return?
Does your system show units per transaction on all receipts?
Is a time clock integral and does it give dollars sold per hour worked by each employee?
Can I upload a picture of an item so an associate can match to the item and avoid switched tags?
Do you offer mobile checkout from a variety of devices without an employee having to come to a counter?
Beware of these Common POS Frustrations for Retailers
You can't upload spreadsheets from vendors, you have to manually enter the data.
You receive email support rather than phone.
There is no customization of reporting.
You have to do too many workarounds to get what you need.
You have to manually update your website, being both inefficient and requiring extra work.
There might be gotchafees after purchase; make sure all ongoing fees are spelled out.
You shouldn't need an IT person on staff to manage it.
The truth is finding the right POS system for your needs is not an easy process, and there are a lot of variables.
Expect to pay for convenience and intuitive interfaces as well as additional services. But like retail sales training, don’t see the purchase as a cost but as an investment.
No one system is perfect right out of the box, but the more confident you are about your business future, the more you will look for what new tools you can use to engage your customers more often and in a higher, more personalized manner.
Point of sale systems are essential for every retail store
Everyone has an outside passion apart from their job. You know well-made tools make your passion whether it is building, gardening, or cooking more efficient.
A fully-featured POS system capable of mobile payments and sophisticated CRM tools can help you know your customer better, stay on top of your inventory better, and make you more money by avoiding out-of-stocks and database errors.
Much like when looking for a new doctor, many people rely on their contacts for a recommendation before jumping in to find a new one. POS systems can be overwhelming at the breadth and depth of their abilities and your eyes can glaze over quickly.
The world of POS systems is dominated by a number of big players who usually lead the developmental charge. Here are some service providers you might be interested in checking out in no particular order: