A POS (Point of Sale) system is essential to the success of any retail business. More than just a tool for processing payments, your retail POS ensures you can manage every aspect of your organization. It includes the software you need to manage inventory, staff, orders, and customer relationships.
However, not all retail POS systems are the same. To ensure you’re selecting a solution that not only streamlines your operations, but helps you boost revenue and enhance customer experiences, you need to do your research.
Fortunately, the years I’ve spent reviewing and comparing POS solutions have given me a behind-the-scenes look at the factors business leaders need to consider.
Here’s your step-by-step guide to choosing the right retail POS system.
Key Takeaways
- There are plenty of excellent retail POS systems out there, from easy-to-use options for beginners like Square, and Zettle, to more comprehensive platforms like Clover, Square, and Shopify POS, the right option for you depends on your business needs.
- Though the features of retail POS systems can vary, they should always include payment processing capabilities, inventory and order management, customer relationship management, employee management, and marketing tools.
- In today’s world, customers approach retail businesses from a range of different channels, making an “omnichannel” approach to point of sale management crucial. I recommend choosing a solution that can align your in-person, and digital sales channels.
What is a POS System?
A point of sale system is the combination of hardware and software retailers use to process transactions, accept payments, and manage operations in your retail store.
Traditional POS solutions revolved heavily around physical cash registers used for taking and recording sales.
Now, comprehensive retail POS systems feature a blend of:
- POS Software: This is the operating system you use to manage your store, products, inventory, staff, and customers. Most POS providers offer various software subscription plans which include access to different features on each tier. Some higher-tier solutions can come with built-in analytical tools, marketing features, and advanced order fulfillment tools.
- POS Hardware: Hardware in a POS system includes everything from the card reader or terminal you use to scan cards and accept various payment methods, to barcode scanners, receipt printers, cash drawers, and displays. Most retail businesses will need at least a card reader, connected to their POS software.
Ultimately, the combined software and hardware in a retail point of sale solution ensures you can process payments, make sales, track important data, and manage your business operations. It has a positive impact on your company’s growth, and the experience you give customers.
Key Features of Top POS Systems
Today’s retail POS systems can vary drastically in the range of features they offer. Many companies even offer specialist POS solutions for companies in specific industries.
For instance, Square has a retail POS, and a restaurant POS option. While the exact features you’ll need will depend on the type of business you run, I recommend prioritizing:
- Flexible payment processing: A strong retail POS should be able to process a wide range of payment methods, ranging from credit and debit card tap and swipe transactions, to payments from mobile wallets, cash payments, and more. Some providers like Shopify and Square also support online payments, gift cards, and invoicing options.
- Inventory management: inventory management tools are how you keep track of your stock in real-time, reduce waste, create sales forecasts, and more. They ensure you don’t run out of stock, or miss out on sales opportunities. Plus, they can help you to surface valuable insights about customer preferences and sales trends.
- Customer relationship management: Some POS systems integrate with CRM software, while others have basic CRM features built-in. At the very least, you should be able to record customer information, so you can personalize sales and offers to each customers. An advanced retail POS system will also allow you to create marketing campaigns within your dashboard, design loyalty programs to increase sales, and more.
- Employee management: Employee management tools can help you track staff schedules, create shift patterns, monitor employee activity and performance, and identify high performers. Some POS vendors, like Square and Shopify, allow you to integrate your software with tools for payroll and shift management too.
- Reporting and analytics: Reporting and analytics features ensure you can keep tabs on your retail company’s performance. They help you identify which items are selling, which products have the highest margins, and more. Shopify even unifies data across your sales channels, to give you a big picture view of store performance.
Other valuable features to look for include built-in marketing tools, and integrations with CRM, warehouse management, fulfillment, and other business management software.
Selecting a POS System: Core Considerations
Ultimately, there’s no single retail POS solution that will suit every business. Your ideal software will depend on your company’s size, operations, and budget.
The most important things you’ll need to think about when sorting through your options include:
- Core features: Based on your everyday business functions, which features are essential to you? Do you need comprehensive employee management tools with time-tracking capabilities, menu management for your restaurant, or access to flexible order fulfillment tools? How many sales channels do you need to connect in one platform?
- Pricing: The price of a POS system depends on its payment processing fees, software subscription fees, and the cost of hardware. Additional fees may be charged for add-ons, specialist modules, and expert onboarding.
- Ease of use: The best retail POS system should make running your business easy. The more intuitive and convenient the platform, the less time you’ll spend learning how to operate your new software and hardware.
- Customer support: Ideally, your POS vendor should offer extensive customer support, over email, chat, and phone. It’s also worth looking for a company with a comprehensive knowledgebase full of self-help resources like guides and videos.
- Scalability: Your POS system should be able to grow alongside your business. Looking for a solution that supports multiple sales channels, staff members, and various apps and add-ons you can use to extend your system’s capabilities will give you more freedom to grow.
Integrating Online and Physical Sales
If you’re shopping for the best retail POS system in 2024, I recommend focusing on platforms that unify digital and in-person shopping channels.
Customers are now interacting with retailers across various channels, making purchases on ecommerce websites, social media platforms, and in-person.
If you can deliver a unified experience across multiple channels, this significantly boosts your chance of outperforming the competition, and increasing your revenue.
In fact, one study found brands with a strong omnichannel customer revenue strategy see an average 9.5% yearly increase in revenue.
If your retail POS system doesn’t support omnichannel selling, you’ll have to manage your online and physical store operations separately.
That means you end up with gaps in data, a confusing inventory management process, and a disconnected customer experience.
Fortunately, many leading POS vendors offer omnichannel-ready solutions. Shopify POS seamlessly connects your in-person selling data, with information from your online sales channels.
It even allows staff members to follow up with customers that visit a store in-person online, sending them email cart links, invoices, and personalized marketing messages.
Square also offers an omnichannel selling option, with the option to create a free website with Square Online, but the features are a little basic compared to what you get from Shopify.
Hardware and Pricing Options
As I mentioned above, the price of your POS system depends on a few key factors: software subscription costs, hardware fees, and payment processing fees.
Here’s a quick breakdown of the different pricing models and structures companies use.
POS Hardware Costs
Depending on the type of business you run, you can start selling with nothing but a smartphone, the right software, and a card reader.
Square even allows you to process payments with no specialist hardware, as you can use Square Online to generate QR codes and process online sales.
Basic card readers can start from as little as $10 to $49 per device, depending on the types of payments you want to accept.
If you’re running a slightly larger business, you might need to consider more advanced hardware. Mobile terminals like Shopify POS Go are ideal for business leaders who want to process payments anywhere.
Comprehensive POS registers, like the Square Register are better for companies that want to process payments from a specific location (like a front of store checkout counter).
There are also companies that offer dedicated hardware options and kits for restaurants and other businesses. Keep in mind, some companies also allow you to rent hardware, or add the cost to your monthly subscription fee.
POS Software and Payment Processing Fees
POS Software costs can vary drastically. Some companies like Square and Zettle allow you to use their POS software for free if you only want basic features.
Shopify also provides free access to the “Lite” version of its POS software for companies with an existing Shopify ecommerce subscription.
Most companies will charge a monthly fee for their software, however. Sometimes, these fees are arranged into tiers, and higher tier plans may come with more advanced features, and lower payment processing rates.
There are also companies that only offer “custom pricing” to organizations, which means your monthly fees will vary depending on the features you need.
Remember to also account for payment processing fees when looking at software costs. These fees can vary depending on the payment processor you’re using, the type of payment method, and your software subscription plan.
For instance, if you use Shopify Payments with Shopify POS Lite on a Basic Shopify plan, fees will start at 2.7% for credit card transactions.
The Pros and Cons of Popular POS Systems
For a quick insight into some of the best retail POS systems, I’ve rounded up this selection of my favorite point of sale platforms. Here’s what you need to know about each option:
Shopify POS: For Omnichannel Retailers
Shopify is easily my favorite point of sale solution for omnichannel sellers. It combines a straightforward user interface, with a huge selection of tools for inventory, order, fulfillment, customer, and employee management.
The platform instantly syncs online and in-person sales data, offers built-in marketing tools, and integrates with a range of software options.
Pros 👍
- Comprehensive omnichannel selling and inventory management.
- Integrated marketing and customer management tools.
- Wide range of integration options.
- Easy to use interface.
- Excellent reporting and analytics.
Cons 👎
- Requires a Shopify ecommerce subscription.
- Advanced features can be expensive.
Square POS: For Small Companies
Square is an easy-to-use and versatile POS solution, with options for both retail and restaurant businesses.
It supports omnichannel sales, like Shopify, offers access to transparent processing fees, and even allows users to access its basic software for free.
Pros 👍
- Easy to use and intuitive platform
- Helpful add-ons for payroll and loyalty programs
- Generous free software plan.
- Lots of versatile hardware options.
- Specialist options for restaurants and retailers.
Cons 👎
- Limited scalability.
- Basic omnichannel selling features.
Zettle: For Small Retailers and Part-Time Sellers
Zettle is a fantastic POS solution for retailers who want to sell through pop-up stores or marketplaces. It comes with low transaction fees for QR code payments, and a range of affordable hardware options to choose from. Plus, you can get the basic software for free.
Pros 👍
- Great free plan with low payment processing rates.
- Low hardware costs.
- Secure payment processing.
- Decent reporting and inventory tracking.
- Great for mobile or part-time retailers.
Cons 👎
- Limited scalability and not many integrations.
- Features are too basic for larger companies.
Lightspeed: For Growing Companies
LightSpeed POS is a slightly more advanced point of sale option for scaling companies. It supports omnichannel sales, offers quick inventory syncing, and includes a range of tools for marketing, customer relationship management, and employee management.
Pros 👍
- Excellent retail, restaurant, and hospitality-focused features.
- Advanced automation capabilities.
- Support for omnichannel selling.
- Wide range of hardware options.
- Excellent inventory management.
Cons 👎
- Monthly fees can be expensive.
- Slight learning curve.
Frequently Asked Questions (FAQs)
The average cost of a POS system varies depending on your chosen software, hardware, and required add-ons. You can start with a low-cost solution like Square, using the free software, a free magstripe reader, and paying only for the payment processing costs.
Many POS systems will integrate with crucial business management tools, such as Customer Relationship Management software, marketing tools, payroll software, workforce management solutions, and accounting software.
On-premises POS systems are installed and run on a computer physically located within your retail store. Alternatively, cloud-based POS systems are hosted on remote servers, allowing you to access the software you need on most devices, through an internet connection.
Choosing the Best Retail POS System
Choosing the right retail POS system for your store is crucial if you want to ensure you can manage your business operations, process payments, and deliver an excellent customer experience.
Make sure you consider your business operations and needs carefully, and evaluate all of your options based on features, pricing, ease of use, and customer support.
Additionally, I recommend ensuring your chosen POS solution can support omnichannel sales strategies, giving you plenty of room to scale your business and adapt to customer trends.
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