Point Of Sale (POS) Trends Shaping The Future Of Retail
Point Of Sale (POS) Trends Shaping The Future Of Retail
<p>The push for less human contact due to the raging pandemic has translated to the exponential growth of mobile point of sale transactions. It continues to remain an indispensable tool for retailers. The Point-Of-Sale (POS) system continues to remain an invaluable business tool for the retail business with the technology constantly evolving from being used as a billing system to becoming an AI driven software offering business management features such as click and collect shopping, loyalty programs, online billing, bill splitting, customer feedback etc. in a few years. It continues to get integrated with the organisation's inventory, accounting, campaigns & marketing, and data analytics tools in real-time. The evolution of the POS continues. Its evolution isn’t slowing down, hence the need to keep up with POS trends.</p><p>Let’s review some of the major POS trends and how they impact retail businesses across the globe.</p><p><strong>1. Mobile POS Systems: </strong>In the traditional retail environment, transactions happen at one location: the checkout counter. However, with retailers trying to reduce retail space and save rentals or increase sales merchandise, the days to restrict <strong>POS systems</strong> to the cash counter have gone. Instead, in the store associates can move around the store, interact with customers, gain consumer insights, complete sales on the spot and take customer feedback. What’s more, mobile and cloud-based POS transactions enable businesses to make sales from anywhere in the store.</p><p>The 2 popular checkout models used by retailers today are:</p><p>· <strong>Cloud-Based POS Technology:</strong> have become increasingly prominent as a viable alternative, especially for small and medium scale retailers. The software as a Service (SaaS), are easy to deploy, can be directly accessed from the internet using a web browser, reduce Infrastructure and license cost, bring cost savings, as well as an increased productivity and provide real-time sales visibility to the retailer. In fact, the cloud POS market size is expected to grow to $6 billion by 2025.</p><p>· <strong>mPOS Systems:</strong> provide the flexibility to store associates to meet customers where they are and make sales on the spot on the floor. mPOS provides the flexibility to sell at events (like pop-up stores, shop-in-shops, trade shows, online ordering, and payments) across different retail formats.</p><p><strong>2. Seamless Multi-Channel Customer Experience: </strong>POS technologies continue to empower retailers in creating a seamless customer experience across all touchpoints/channels. Today’s shoppers prefer not to use a linear path to purchase. For example, one might initially learn about the products from social media sites such as Facebook, Instagram, visit the store and finally decide on the medium i.e., Online purchase and delivery or, shop online and come to the store to finish the transaction by paying in-person, or buy online and pickup in-store <strong>(BOPIS)</strong>. The buying journey has become increasingly complex for retailers. In the wake of COVID-19, nearly 50% of retailers plan to invest more in multichannel retailing as compared to their pre-pandemic period.</p><p><strong>3. POS Hardware Upgrade:</strong> With a major shift in the way the retailers are moving away from the traditional cash registers and moving towards a more mobile POS system, we also see the POS hardware industry changing its business strategies and developing new products like smartphones, tablets, barcode scanners, receipt printers, payment devices and cash drawers. In addition, Wireless/ Bluetooth technologies are also incorporated allowing businesses to connect mobile card readers and other peripherals without hogging Wi-Fi bandwidth and increasing internet expenses.</p><p><strong>4. Alternative Payment Methods:</strong> With nearly 70% of transactions coming from credit and debit cards, other digital payment modes gaining traction and cash accounting to only about 12% of POS transactions, we are gradually moving into a cashless society. Further, even the credit and debit cards that remain popular today, are seeing a gradual decrease as consumers access ever-expanding digital payment options such as Google Pay, PayPal, Apple Pay, PayTM, PhonePe, BHIM and other apps and services.</p><ul><li><strong>Gift cards and loyalty and rewards </strong>programs are still very popular with retailers.</li><li><strong>Bill splitting:</strong> With the millennial customers not willing to pay the entire amount of the bill with friends/ dates, especially in the restaurant environment, has made it compulsory for retailers to give a bill splitting option to pay for a single ticket with multiple payment methods.</li></ul><ol><li><strong>Installment payments:</strong> With retailers especially in categories such as White goods, furniture, jewelry categories have been trying to lure customers to buy more that they can pay immediately, by introducing, installment payment options on their POS systems.</li><li><strong>Cryptocurrency:</strong> E-currencies like Bitcoin are again gaining momentum and will soon become a viable form of payment. There are already some successful POC’s on this front.</li></ol><p><strong>5. Integrated Customer Loyalty Programs:</strong> Loyalty programs continue to remain extremely important and critical to attract and retain customers through incentives and personalized products and experiences. Further, the loyalty programs have evolved tremendously from being a point-based program to giving personalized offers, experiential offers, instant discounts based on the customer's buying habits. Retailers are increasingly spending a lot of time understanding customer buying behavior to provide personalization and ensure continuous customer loyalty and engagement.</p><p><strong>6. Rise Of POS Data Analytics:</strong> Retailers are investing heavily in data analytics systems to understand, customer buying behavior, store locations, product merchandising, decide of promotions and pricing, etc. Further, today’s consumers are willing to save their purchase history, personal details and preferences, if it helps in making their checkout experience easier and get relevant offers from their favourite brands. However, the POS data is valuable for more than just getting to know your customers and their communication preferences. The business uses the data to define various metrics around store layout, foot traffic, store staff, deliveries among other metrics.</p><p><strong>Bottom Line:</strong></p><p>Point-of-sale systems have come a long way since they were first introduced a few decades ago and the pandemic has only aggravated the need for retailers to invest in sophisticated and intelligent POS systems. They are no more just a way to make sales, take payments to generate customer invoices— a modern POS system today has added a lot of features and capabilities that turn each system into a virtual data mining system for your entire business. Increased mobility, personalization, digital payments, integrated loyalty programs and other POS technologies are becoming an integral part of every retail business.</p>
KR Expert - Kunal Mehta
Human insights are irreplaceable in business decision making. Businesses rely on Knowledge Ridge to access valuable insights from custom-vetted experts across diverse specialties and industries globally.
Our flagship service, phone consultations, enables you to get access to first-hand, grass-root level information from our global expert network to form or validate your hypothesis.