Many small businesses rely on point-of-sale (POS) systems to ring up customer purchases and manage several other vital operational functions. Those in the retail industry can especially benefit from this type of solution. POS systems allow retailers to complete customer transactions, but also track and manage inventory and customer information. An Accenture pulse survey revealed that 91% of consumers are more likely to shop with brands that remember them and provide relevant offers and recommendations – POS systems allow retailers to do just that.
There are hundreds of POS systems on the market, so choosing the best POS system for your retail business requires careful analysis and consideration. When evaluating your options, look for a solution that not only fits your budget, but also has the tools and features your business needs.
What is a retail POS system?
If you’re wondering what a POS system is, it is a combination of both POS hardware and software. It is a common replacement for the traditional cash register, since it offers more comprehensive tools aside from just ringing up orders. For example, it lets you record sales, process payments, track and manage inventory, administer customer loyalty programs, manage employee performance, and access real-time reports. Some POS providers offer everything you need (software and hardware) in one complete package, whereas others allow you to pair their software with the hardware you purchase from third parties.
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Retail POS software
Retailers have the option of using local, server-based POS software, which stores sales data onsite; however, the best programs are either app- or cloud-based SaaS solutions. Using a cloud-based solution is common among retailers since it allows them to view sales data online in real time. Additionally, cloud-based retail POS software is typically more affordable, which is especially ideal for retailers with several locations or a tight budget.
Whether you choose cloud-based or local, server-based POS software, make sure the system is compatible with your payment processor and has the add-ons you require.
“Shop around with different providers to see what works best,” Jared Weitz, founder and CEO of United Capital Source Inc. told business.com. “I suggest driving your POS setup around the software and finding hardware that will be compatible with it. Think of the software as the brains of the POS – you want it to be as tailored to your business needs as possible.”
Retail POS hardware
When selecting a retail POS solution, consider the type of hardware you want to use and what will be the most practical for your store. POS hardware can be a stationary terminal or a mobile device, such as a tablet or iPad. Many small businesses prefer mobile POS hardware since it is typically less expensive and offers more flexibility.
“[If] your store has multiple locations or attends pop-up events, having a mobile POS available for fast checkout is going to drive your business even further,” said Weitz.
Although each business is unique, the typical POS hardware you need for your retail business includes:
- Tablet stand
- Cash drawer
- Barcode scanner
- Receipt printer
- Card reader or credit card terminal
Some POS software providers have proprietary POS hardware that you’re required to use, while some providers let you use third-party hardware components. There may be specific brands and models that are only compatible with the software, though.
Bottom Line: A retail POS system consists of POS software and hardware that enables retailers to ring up customer orders, record payments and perform several other operational tasks.
What are the essential features of a retail POS system?
Sure, you can purchase a POS system with basic features like inventory management and data recording or a more robust solution, but make sure your system has these essential features:
- Payment processor compatibility
- Product matrix, inventory tracking and purchase ordering
- Data recording, reporting and analytics
- Customer management and loyalty programs
- Employee management (function, data access and time tracking for payroll)
You also want a system that integrates seamlessly with top accounting software and highly-rated email marketing platforms. Having an integrated system that automatically shares data will simplify your business operations and reduce the risk of human error.
How much does a retail POS system cost?
When considering the costs of POS systems, it is important to remember that you are purchasing software and hardware. POS software typically costs between $40 and $100 per month, per register, and hardware can cost between $20 and $1,000, depending on what components you need and whether you lease or purchase it. You will also likely be charged a payment processing fee, typically between 1.3% and 3.5% per transaction.
Industry experts recommend buying POS hardware; leases often come with lengthy, noncancelable contracts and specific card processing requirements that cost you more money over time. Another benefit of purchasing hardware is that you may not need to replace equipment if you find a better deal later. Another factor that determines how much you’ll pay for hardware is whether you use a legacy terminal or a mobile POS system. Mobile POS systems are always less expensive, especially if you already own tablets.
Choosing retail POS software that is cloud-based, as opposed to a local server-based, can save you money too. Month-to-month terms are preferable, as they allow you to cancel without penalty, but if you’re confident that you’ll be happy using your system for a year or more, you can often prepay annually for your software and receive a 10% to 20% discount.
FYI: Some vendors offer free POS systems, but keep in mind, these often come with limited features and higher transaction fees.
What is the best retail POS system?
When choosing the best POS solution for your retail business, there are several factors to consider. Your system will likely need features like inventory management, real-time reporting tools and third-party integrations. It should also have retail-focused features like discount and pricing options, as well as customer management capabilities for loyalty programs and purchase histories. Also, think about which features you may like to add on as your business scales.
After spending countless hours researching and analyzing POS systems, we narrowed down some of the best POS systems for retailers. Here are some of our top choices:
|Company||Best for||Starting price||Read more|
|Lightspeed||Retail||$69 per month||Lightspeed review|
|Epos Now||Ease of use||$39 per month||Epos Now review|
|Clover||POS hardware||$69 per month||Clover review|
Other top systems to consider include Square ($60 per month, per location), Revel Systems ($99 per month, per terminal), and Heartland.
Some source interviews were conducted for a previous version of this article.