Most types of business, from retail to manufacturing, have adopted some form of enterprise software system. These systems integrate information that is critical to business operations and allow department heads to make informed decisions concerning purchasing cash management, staffing and production. However, retail and hospitality business owners may need to make split-second decisions due to seasonal demand, an ongoing promotion or even a change in the weather. This is one reason that a point-of-sale system should be added to an existing enterprise software system.
The point-of-sale system records detailed data concerning product sales, customer service productivity and inventory levels on a real-time basis, a feature that is not always provided by enterprise software packages. All of these factors influence purchasing staffing and planning decisions. At the very minimum, the point-of-sale system tracks merchandise sales from a volume and a dollar amount. The system includes cash sales, credit sales, layaways and consignments, and when data is exported, it can break it down among the categories to show the types of products and the dollar amounts of sales contained in each sales category. This metric will help a business owner know both what product to promote and whether to promote a particular service as well. For example, if a point-of-sale system shows that more toys are put into layaway during the month of November than are sold during a cash transaction, then the store can promote its layaway service during that month to maximize toy sales. The point-of-sale system also tracks markdowns, discounts and returns. It can even discount certain items during a particular time frame automatically. This is highly useful for stores that enjoy holding special sales events during which selected items are on sale only at certain times which is a feature of many “Black Friday” promotions.
Sales volume can also be broken down on a daily and even an hourly basis, which is a fundamental piece of information needed to make intelligent staffing decisions. For example, if a point-of-sale system indicates that the bulk of in-store sales occurs between the hours of 3 pm and 7 pm, then the logical conclusion would be to staff the store heavily during those hours. Further, if the system shows that one customer service representative is consistently a top producer or a low producer, this information would factor into scheduling advancement and compensation considerations. The point-of-sale system can also detail the results of issuing coupons, offering a discount package or hosting a special in-store event, providing the retailer with the data to calculate the ROI on a particular marketing technique easily and immediately.
Because the point-of-sale system provides inventory information in real-time, it can prevent those embarrassing moments when an advertised special is out of stock. As the inventory level reaches a critical point, a call can go out either for expedited delivery of a purchase or for merchandise to be transferred in from another location or a distribution center. For a restaurateur, the ability to effectively manage perishable inventory is critical to the profitability of the operation. Being able to gauge inventory turn and implement a just-in-time system would reduce the amount of inventory that is thrown away because it is past its expiration date, yet it would ensure that the customer demand for specific dishes could be met.
A point-of-sale system can benefit the customer service staff by creating a relational sales environment. Because the system allows customer data to be accessed at the time of sale, a staff member can suggest additional purchases based on the customer’s previous purchases. Some POS databases contain internal messages specific to customers such as indicating that a special discount is available or that the customer has earned loyalty or reward points as part of a customer retention program. These tools can help customer service to promote and produce additional sales. The customer database can also include warnings to the sales clerk if a customer has a history of writing bad checks or having a credit card declined. A point-of-sale system can alert the staff to patterns of problem customer behavior as well as increasing their ability to make the sales interaction one that is friendlier and more personalized for the customer.
Finally, many point-of-sale systems are equipped with additional features that streamline the sales process. Some of these features include the ability to issue e-receipts, to be integrated into online sales efforts, and to enhance customer management by automatically sending e-mailed promotions, service reminders or thank-you notes. A few even have scales for weighing loose items such as bakery items, confectionery or hardware. The scales calculate sales done by weight to a fraction, meaning that every ounce that has been produced and sold is accounted for.
A point-of-sale system is an essential tool that help to increase sales, decrease inventory shortages or overages, create better targeted marketing campaigns and reduce shrinkage. When used in conjunction with the additional features provided by enterprise software systems, the end result is better decision-making and increased profitability.