Running a retail business? Well, then you must be well aware of the need for a good Retail Point of Sale (POS) system. Without any doubt, it is the heart of every transaction and when it comes to defining a good Retail POS system, is not much more than just processing customer purchases, handling payments and recording sales quickly. In fact, a good POS system allows you to do much more than that by best utilizing new and available technologies, like manage inventory & customers, empower staff, track sales, identify & award regular customers and get the pricing right. These are a few things which a good Retail POS system will do for you. Meanwhile, to get a scalable POS system, it is vital to find the right POS System Development Company who is not only adept in the arena but has a support of a skilled and experienced team.
Having said that, as you choose the right POS solution do keep in mind that it suits your needs. No matter you are choosing a POS system for the first time, or just getting your old POS upgraded to a new system, there are a number of factors to be considered, with one being, whether to go for a traditional POS or mobile POS.
Traditional POS system: This usually comprises a stationary touch-screen computer display, credit card reader and cash drawer. It may also include printers and scanners.
Mobile POS system: It is mainly a tablet configuration used both in stationary and mobile apps, and it can be utilized as an adjunct to, or in lieu of, stationary point-of-sale systems.
While you choose between traditional POS or mPOS consider what is best for your business and do look at the other factors affecting your business as well, such as:
- Is any hardware proprietary?
- Does the system functionality suits your business requirements?
- How much does the software really cost?
- Are there any hidden fees?
- Is your only option to sign a contract?
Size, Scale & Space
When having a small store with limited space and you need a small footprint, a tablet POS will work best for you, with the configurations as well are smaller as compared to traditional POS systems. Besides, mPOS system are certainly more appealing and desirable for a boutique environment. As they offer a flexible solution, hence mPOS systems can be used in mobile as well as stationary setups.
However, you are operating a larger retail business with multiple checkouts, it would be better to go with a traditional point-of-sale system. It offers bundled solutions coming along with all important peripherals typically used at a checkout point and are the most efficient and simplest approach to adopt or update systems.
Software & Hardware Components of POS Systems
So, as we consider the point-of-sale system components, you must first understand the available software options and their requirements.
Software Components – Here there are two of the common software deployment methods:
Cloud-Based: It is also known as Software-as-a-Service (SaaS) point-of-sale solution. Here the system is accessed and support via internet. In case, internet goes down most POS system track sales & sync them once the connectivity is strong again.
On-premise: Now, this is a traditional software model, where you require purchasing one or more licenses directly for the software and then install them on the servers or computer system. You need update & maintain the software, for which you might need a dedicated IT professional, in case of larger organizations.
Hardware Components – No matter which software deployment method you go with, the hardware stays the same. However, here is the list of a hardware component which is a must to support POS system:
Crucial POS Hardware
Register Screen: It is the standard monitor displaying product database. It allows for functions such as employee clock-in & view sales reports. Nowadays, bulky monitors are being replaced by tablets, especially iPads.
Cash Drawer: Going by the limited cash transactions nowadays, this components will certainly fade away in the coming times. However, until then you do require a secure place for storing cash for transactions. Besides, no credit card fee is tied to cash acceptance.
Barcode Scanner: This automates checkout procedure. Barcodes are scan to get product information and then it is added to checkout total. As the barcodes are scanned, it may also integrate with inventory management systems to automatically adjust the stock-levels.
Receipt Printer: Even though the text and email receipts are getting popular, still paper receipts are important to provide customers a quick glance of their purchasing. Besides, employee sales totals, hours & other crucial information can also be printed.
Credit Card: It is important for retailers to have secure and EMV-compliant credit card readers as the EMV payment standard went live in 2015, and retailers not complying with the standards will end up suffering huge losses on account of fraud liability.
Needless to mention, the retailers get to enjoy great benefits from automation and organization offered by POS software and hardware.
What are the benefits of having a point-of-sale system?
When having a computer in your business, it provides you with a huge amount of data which can only be retrieved with a conventional cash register. Customer purchase history, item sales detail, stock status reports, monthly/yearly/seasonal sales data happen to be few of the crucial and detailed information can be retrieved. Few of the other additional & obvious benefits are:
- Reduced costly inventory overheads.
- Reduces time spent on back office & inventory functions
- Saves the time of sales force
- Speeds up checkout lines
- Easy and automated accounting tasks & report generation
- Betters relationship with your vendors providing timely inventory information
- Uses system-generated customer info to process direct marketing campaigns
- Increases traffic in your store
- Higher customer service level
Must-Have Features of Point-of-Sale System:
- Integration: It is always good for your business to have a POS system with a configuration that can be integrated with several modules, such as accounting, time & attendance, inventory management, loyalty & gift cards. When having an integrated system, it leaves lesser scope for errors and discrepancies as data is being manually transferred from one system.
- Employee management: This feature provides clock-in and clock-out tools and also manages employee scheduling and payroll.
- Inventory Management: Management of the on-site inventory quantity is integral to your store success. Inventory management capabilities offer an on-demand window into your stock. This way it is possible to eliminate inefficiencies, like when you manual count inventory and dig through “the back” for a particular item. Having this functionality is crucial for the retailers and 82% of POS buyers request for it.
- Customer Management: This functionality allows to proactively increase the number of high-quality consumers. It does a good job of collecting data on your customers’ purchasing history, so you can identify your most valuable customers on the basis of their spending. This offer an additional layer of transparency that can’t be obtained by the retailers without POS systems. It is vital to identify regular customers and this is why as per research 37% of POS buyers request for customer management capabilities.
- Sales Reporting & Analytics: Sales Reporting & Analytics function allows captures and analyzation of your store’s sales data. It not just automatically keeps track of what is selling well but it also reflects how much revenue you make on each product. This enables you to recognize and focus on driving sales to your most lucrative items. Research shows that 49% of single-store retailers request for sales reporting and data analytics capabilities.
- Mobile/Tablet Access: It is possible to remotely access your POS system through these devices in order to stay connected to your business from any location, be it office, home, or on-the-road.
- Streamlined Purchasing: Automated purchasing processes allow you to easily connect with your suppliers, thus it ensures you are never running low on stocks.
- Customer Relation Management: The system maintains the profiles of regular customers, thus enhancing the customer experience by serving individual needs and building loyalty in long-term.
- Stock Management: Critical Information is monitored about the store, like purchases and transactions. It reduces the time wasted on ordering and calculation of re-order levels.
- Fast & Accurate Billing: It lessens the number of manual efforts taken to complete a transaction, thus it enhances employee productivity and performance.
- Security: It must be ensured that your POS system is in compliance with the Payment Card Industry Data Security Standard (PCI DSS), as this way it protects the integrity of sensitive and crucial customer data, like phone number and credit card numbers.
- Robust Reporting: The best way to maintain a handle on what’s happening to your business in all aspects is by reviewing the reports. Strong reporting allows you to collect your company data and also go through it for an SKU-level view of sales.
- Facilitate Multi-Unit Management: So, even when you own only a single franchise unit, still go for a franchise point-of-sale system that allows you to manage multiple units from a single dashboard. So, in case you decide opening more units in the future, a franchise point-of-sale system with multi-unit management capabilities will allow you to manage numerous stores efficiently.
How much will it cost to develop a Point-of-Sale system?
As we look into the costing of developing a POS system, let’s first start by understanding the pricing models:
Pricing Models for POS System
There are a couple of pricing models and they are explained below:
Pay-Per-Month option: It is the most prominent and preferred pricing model, however, this model may also turn slightly pricier. So, the model breaks down in different ways. Mainly, the base pricing is decided as per user or per register which is approximately $35 for month/register. Then starts the actual layering which is usually determined by the combination of features and stores. In case of small retail stores, it comes to $35-$40 where you get one store, inventory management and CRM functions, whereas for large businesses the cost starts at $50.
Pay All At Once: Now this is not a much-used model and even companies don’t entertain it much. It consists of massive cost upfront, but if you choose to look another way around, it may be more profitable as compared to complete charges involved in the pay-per-month model.
Hidden Costs: So there are also some hidden costs involved in the making of a POS system, which may not be included in the initial cost estimation statements.
- Hardware Cost: It is vital that the hardware costs are included in the estimate as if you plan to get one PC or tablet for a register then it is mandatory to buy entire kit to cater it. Software companies often come up with kits whose pricing may vary depending on the companies.
- Customer Service Charges: Now the customer service varies with different vendors hence it is crucial to consider this as well. Often some companies come up with free services that include free training and live chat, whereas the case may differ with other companies. Hence, you must keep note of this point as well, as it may end up adding the total estimate.
- Credit Card Charges: It is crucial that you pay attention to the percentage of each solution charge as they are different and this may result in additional fee than expected. Even though it is difficult making a detailed estimate initially but you must be prepared and be clear about basic estimates.
- Additional Features: A number of companies also charge for any kind of additional features in the POS systems. For instance, some may charge for additional reporting features, hence keep note of it once the cost is estimated.
As you plan on developing a POS system, take note of these above-mentioned points and to ensure that you choose the right POS Software Development company, who is able to understand your requirements from the system well.
What should you pay?
Now, for the initial purchase, you must be ready to spend between two to three percent of your annual revenue and between twelve to eighteen percent of that cost for yearly maintenance and upgrades. In case, you are a small store retailer, then you are lucky to enjoy a lot of free options that you can avail. For the medium-sized retailers as well, there are benefits of one or two open source options.
Ultimately, the estimation for POS system is nutshell and requires more clarifications and comprehensive study before anyone finalizes on it, regardless you are a business giant or a small-scale retailer. As the technology is advancing, having a POS system installed in a store is crucial, thus do invest your revenue on the same once you have gone through a comprehensive study on the estimated cost of POS system.
Get a team of efficient POS Software Developers and once you have a helpful POS System, be ready to venture on to new business possibilities.