What is POS? - Point of Sale system (POS) is one of the customer’s touchpoint where customers pay for the item they bought, and the seller gets money in return and both of them get a record of the transaction so made in the form of an Invoice. Some retail shops only rely on cashier machine to record money earned + goods sold. However, if you want to scale your business, you’ll definitely need more than a cashier machine.
In today’s competitive industry, solely knowing how much you earned and how much goods you’ve sold is no longer enough. Retailers are moving on to explore new technologies that could help them uncover hidden data so that they can run their business more efficiently. In modern day environment, a POS System is nothing but an electronic device facilitating recording of a sales transaction and collection of money from customer as a result of such sale transaction. It involves hardware and software working in tandem to complete the transaction.
On-premise Point of Sale Systems
An On-premise Point of Sale System is the one that needs to be installed on a local system and server. On premise systems can only be accessed locally and many organizations go for on-premise systems for their want of security and control. The benefit of having an on-premise system is, it provides much better integration with hardware peripherals (scanners, camera, poll-display etc.,) as compared to a cloud-based point of sale system. Further, on-premise systems do not require internet connectivity and hence they continuously function even if the internet connection is down. On-premise systems are generally sold on a perpetual license and hence they involve a huge initial cash outlay as compared to the cloud-based point of sale systems. Further, they involve one-time training and implementation costs and recurring maintenance charges. On-premise POS Systems are static in nature. They don’t offer mobility in today’s fast-paced work environment, but they are generally found to be more user-friendly with their touch-screen functionality.
Cloud-based Point of Sale Systems
A Cloud-based Point of Sale System is the one which is hosted on a cloud platform to provide its services to the user as and when he connects to the system. A Cloud-based Point of Sale System requires internet connection to provide its functionality. Cloud-based systems have certain limitations when it comes to connecting with the external hardware peripherals, but they are most useful when one is operating in multi-store environment. With cloud-based POS Systems, one can maintain all the master data and transaction data at one central location and that makes real-time actionable information available to retailers. One can access the system from anywhere, anytime. Stock availability at any warehouse or store, sales made at a particular store etc., can be known in no time. Cloud-based systems usually follow flexible monthly or yearly subscription-based pricing and hence, they do not involve a huge initial investment. Cloud-based systems are scalable. One can upgrade or downgrade their subscription based on their need. They also offer a high level of security and ensure that the business-critical data is always available and backed up.
Mobile Point of Sale Systems
A mobile POS System is a variant of Cloud-based POS System where the underlying software runs on a mobile device. It offers all the benefits of a cloud-based POS System and offers a greater mobility to the retailers. Billing can happen anywhere in the store as the mobile device can be easily carried.
Self-service Kiosks are customized to serve a particular purpose. Vending Machines found at the airports and public places offer the self-checkout facilities to the end customer. Self-service Kiosks can run 24x7 without human intervention and eliminate the need of a cashier. They also provide a great customer experience since customers can select items they want to buy and pay for them without having to wait for anyone.
Hybrid Point of Sale Systems
A hybrid Point of Sale System is the one that tries to provide the best of both worlds i.e. a combination of on-premise software and cloud-based software. A hybrid POS works even if there’s no internet connection. It syncs all the data back to the server as and when the internet connectivity gets restored. Normally billing functionality in a hybrid POS system works on-premise and the rest of the retail functionality like master data creation, retail discounts and promotions, price lists, reporting etc., is made available in the cloud-based system. Hybrid POS Systems are sold on subscription basis and hence they involve lesser initial cash outlay. Ari POS and Retail Management Software supports this hybrid way of working.
POS systems by their use:
There are a variety of Point-of-Sale systems in the market, which usually include: Retail POS system, Restaurant POS system and Salon POS system.
Each POS system contains a few different functions in order to cater to the needs of the industry. For example, Restaurant POS will contain the function to enter customized food order and provide kitchen display; Salon POS help staff to manage appointment bookings etc. Although the main functions are more or less the same, but there are still some differences to cater to specific industries.
Below let’s look at each POS respectively.
Retail POS system
A retail POS software usually consists of these modules: inventory, sales, purchase, promotions and discounts, customer management, employee management, and sometimes finance management.
A cashier machine will only record the sales and inventory portion. The difference between a POS software and a cashier machine is that POS is more than a cashier machine – cash collection is only part of the POS system.
We usually call the cashier machine in POS system as POS terminal or Till, to indicate that this is the point where payment is to be collected. A POS terminal does more than just collecting money:
There are a lot more functions in the POS terminal than a cashier machine, and the reason why this is possible is because a POS system consists of both software and hardware to work together to achieve an integrated platform.
When considering which retail system to purchase, retailers like you will forecast into the future and look at how your business were to expand. The worst-case scenario is when your POS system i.e. individual machines are lying at various shops and they do not communicate with each other.
Hence another beneficial point to take note is that a good POS system will have multi-store management module for retailers to control multiple shops linking to each other and the headquarter. This enables your retail staff to check for stock information not just within their own retail shop, but also in other retail stores.
Let’s look at the individual components of a good Retail POS system.
To put it shortly, below is a short summary for each section.
Sales & Inventory Module
Discounts & Promotions Module
Customer Loyalty Management
Retail Staff Management
Multiple Store Management
Accounting & Finance Module
Sales and Inventory
A POS system oversees the entire operation process from the moment you have to procure an item from your suppliers, to managing shipment, payment, goods receipt, stocks take, inventory management and final sales in the store – you need a comprehensive POS system to take care of all of that.
Item tracking is also available in a good POS system where you are able to see how stocks are moved around, where the stocks are located, speed of movement of stocks etc. The advantage of having such a management process in the POS system is to allow you to know what sells and what doesn’t. It’s for you to collect valid information to make strategic decisions such as running a warehouse sale to clear off slow-moving stocks, or pre-ordering more of your hot-selling items to make sure that you’re not out-of-stock.
With a good POS system, you no longer focus on collecting money and selling goods, you start making crucial decisions that gave you the competitive advantage as compared to your competitors.
Promotions and Discounts
When talking about running a retail shop, how can we miss out discussing promotions and discounts? Discounts are usually given whenever there is a festive season e.g. Christmas sale, Black Friday sale etc. The advantage of having discounts in the shop is to entice customers to try out your products or at least walk into your store to take a look to see if there’s anything they need.
With a POS software, you can set what kind of discounts you allow the shop to run from the back-end. Just enter the rules, such as allowing retail staff to provide 5% discount, or if customers are asking for more than 5%, store managers have the right to override the rule and provide a maximum 10% discount.
This helps to efficiently control what are the discounts you allow the front-end shop to run, and what are the rules you want to set in the system. This method of giving out discounts usually occurs to retail shops who have a commission structure where part of the retail staff’s pay comes from their sales commission – which you can define this commission structure in Ari Retail Management System as well!
Coming to promotions, modern retailers like you are always thinking about new, attractive and exciting ways of running a promotion. It will be too standardized if each promotion you run is just “20% off all items”. It’s definitely more fun to introduce new concepts such as different items will have different discounts, or bundle different items together to sell as a bundle deal, or go for Buy X Get Y Free to entice customers to try out your new product.
By providing a mix-and-match, you are coming up with innovative and interesting ways to attract customers to visit and are more willing to purchase from your store. However, it is not easy to execute that promotional strategy if you are not utilizing the right tool. Hence Ari Retail Management System allows you to make use of such new technology to play around with what kind of promotions you would like to run. Moreover, Ari offers templates that allow you to make changes and customize the most suitable promotion that you want to run.
Customer Rewards Program
Customer Rewards Program is also known as Customer Loyalty Program. The benefit of having a POS system is that you can now collect customer information and understand your customers in order to come up with future strategies that can continuously attract and retain customers.
Usually, customers fill up their particulars right at the cashier using the POS terminal, which information will be linked back-end. It’s no longer the case where customers have to fill up a form and you have to get one employee to input such customer details into the system. With direct input from customers at the store front, you saved manpower, time, and reduced human error.
By having your own Customer Rewards Program, you are able to collect customer information for re-targeting. They will be the first group of customers who know about new products introduced, deals and promotions in the shop, or even hosting of events etc. to thank VIP members.
However, it can be confusing for some retailers to set up their own Loyalty Program. Part of the reason is that some POS systems out there are inflexible, which only allow a few options to run a loyalty program and yet, retailers want to be creative. Creative in terms of coming up with tiered membership to differentiate and classify the members, and customers enjoy different benefits. Ari Retail Management System is one such flexible POS system which allows retailers like you to implement a Customer Rewards Program that suits your business the most. We know one size doesn’t fit all.
On the other hand, with customers’ information and purchase history being stored in the POS system, you get to know your customers’ demographics better and make more impactful decisions on how to run your retail shop. Without such crucial data at hand, retailers will be operating in the dark and could not understand their customers, causing them to lose out to competitors.
Other than Customers Management, a good POS system also has the function to manage retail employees – especially if you take security as a serious issue. It is important to track how each cashier operates the system and find out if there are any discrepancies in the money collected.
On top of enhancing security with user rights, a POS system allows retailers to keep track of sales commission for retail staff. Accurate data allows you to reward outstanding retail staff, identify top-sellers and organize an attractive commission structure. Ari Retail Management helps you manage your retail employees and limit their user rights – so that each user can perform functions that they are expected to.
For example, someone in the procurement department will have no access to information in finance department; yet the finance department can have access to both sales and procurement department. In this way, you can control what is being seen by employees within your retail brand to tighten user security.
Every retailer plans for the future. You can never be satisfied with just operating one shop alone. Hence when investing in a POS system, smart retailers will assess if this system allows them to scale up in the long run. It is a huge hassle to migrate to another POS system after using it for a few years when all data are stored inside. To avoid complications in the future, retailers will want to use a POS software that allows them to expand their business.
One such consideration is to assess if the POS software allows multi-store management. With multi-store management, retailers can link up information at various stores for easier control. You can set rules for each retail shop from the back-end office, and retail staff can access information in other retail shops remotely e.g. to check for stocks in other stores.
Having the ability to manage multiple stores at one go makes life much easier for retailers – especially if you have a bigger vision to open stores in multiple geographical locations. You can have the central control of how your shops will operate and share data among stores. The biggest advantage is that with Ari Retail Management system, you can set different shop rules for different locations, such as differential pricing for different countries due to conversion rate and the standard of living.
A good POS system can provide such flexibility to help you scale your retail business and save the trouble of changing or migrating to another system in the long run.
One of the most essential modules a good POS system has is finance and accounting management. Every business will need to take care of their finances in order to assess if their business is healthy or not. Standard accounting functions such as Account Payroll, Account Receivable, General Ledger etc. can be managed in the POS system.
On top of that, Ari Retail Management software contains dashboards and reports that can help retailers gather data, understand how their business is doing and make strategic decisions. The reason why retailers want to invest in a good POS system is to enhance their day-to-day operation process so that each stage is managed smoothly.
Restaurant POS system
When it comes to operating a restaurant, it is important to invest in a system that can help you run the restaurant smoothly. The most basic investment is to purchase a good restaurant POS system. Now the question is, what is a restaurant POS system? How do we define if a restaurant POS system is suitable for you or not? What’s the difference between a restaurant POS and other POS systems?
What is a restaurant POS system
A restaurant POS is a Point-of-Sale system similar to retail POS as introduced above. Operating a restaurant is more complicated than operating a retail shop. A restaurant owner has to look after , kitchen management, inventory, staff and daily operations. When it comes to inventory, it is a tricky task to manage as food and beverages have expiry dates. You need a system in place to keep track of those expiry dates, use up those that are closer to expiry and discard items which are already expired.
Ari POS software allows restaurant owners like you to easily keep track of food items and organize your inventory well.It provides details of quantity, locations and expiry dates for you to better manage your food items. It is extremely important for restaurant owners to manage your inventories well as you want to make sure the food is safe to consume, or else bigger PR issues might occur which might damage the restaurant's reputation.
Dealing with food, it also means that you will want to look into flexibility of the restaurant POS software such as allowing customizations of orders to be made. For example, some customers may be allergic to certain food like milk or they dislike chili, onions and would like those ingredients to be removed from the food order. A typical café will also have to deal with customized orders such as whether to add whipped cream, less ice/no ice, or special-order decaffeinated drinks.
This is one of the typical day-to-day scenarios that restaurants and cafes will encounter. Without a comprehensive POS software, it will be difficult to manage such operations.
Why having a proper restaurant POS is important
Based on some of the examples given above, we can see the importance of investing in the right POS system. Instead of looking at other types of systems, a restaurant owner should preferably only consider POS software that is catered to the F&B industry.
The first reason to invest in a restaurant POS is to easily and accurately keep track of food expiry dates, to serve fresh food so that consumers’ health and well-being are taken care of. Food safety is utmost important in the F&B industry. To manually manage everything will incur a huge cost in terms of time and manpower and is also prone to human errors. Therefore, relying on technology to help you manage the inventory portion is a wise choice.
Secondly, customers are more willing to visit cafes and restaurants that are flexible enough to cater to their diet needs. If you can’t serve what customers are looking for, it’s unlikely they will come back again. However, restaurant staff who are taking the orders are not kitchen staff who will make the food. Hence restaurants need to have a good restaurant POS to manage special orders to serve what the customers want.
A good restaurant POS allows accurate information to be shared within the restaurant. The POS system needs to be flexible enough for restaurant staff to enter customized orders and transmit the information to kitchen staff. Another function that is important to restaurants is allowing the addition of ingredients, such as adding more rice, cream, vegetables etc. at an extra cost. This is not just for restaurants to provide customized orders, but also to keep track of amount of ingredients used and charge accordingly so as to ensure profit-making.
Due to the various complications, cafes and restaurants will have to purchase restaurant POS system in order to operate them smoothly.
Components of a good restaurant POS system
In short, a good restaurant POS that you need to consider, should have the following functions:
We have covered the first 5 points previously. Moving on to Staff Management, a good POS system should ensure high security whereby the POS software is used based on user log-in. This is to control who has the access to the POS system and their respective user rights – so that information and data can only be accessed by the ones who need to.
However, ensuring high security is a must-have for all good POS systems, so allowing usage based on user rights is not a unique requirement for restaurant POS. What’s unique to restaurant POS is the ability to keep track of food items’ expiry date, manage stocks level to order enough quantity to avoid out-of-stock situations, customized orders, staff POS display and kitchen display.
But in order to compete in the F&B industry, restaurants/cafe owners are constantly thinking of new marketing ways to attract customers. Getting the right kind of restaurant POS system can help to achieve better business as you can execute your marketing strategies and also collect customers’ information to find out more about them.
One of the basics is the ability for POS systems to run discounts and promotions. A restaurant POS should be flexible enough for you to select what kind of promotions you want to run. For cafes, it is quite common to have offers and promotions like one-on-one coffee, or breakfast set meal etc. For restaurants, some will offer free desserts if customers ordered up to a certain amount. Without technology’s help to manage, it will be difficult to execute these marketing strategies to attract customers.
It is also a trend for restaurants and cafes to come up with their own loyalty program. Hence restaurant POS system allows business owners to have the flexibility to select what kind of loyalty program do they want to run. One type of customer loyalty program may not be suitable for all shops or all countries.
Sometimes large-chain cafes/restaurants may face issues such as when operating in different countries, due to the difference in currencies and pricing, the amount of points earned and can be redeemed might be different too. For such challenges, one need to invest in a good restaurant POS system to control the differences from the back-end / headquarters. The ability to have central control for your F&B business is one consideration when it comes to choosing a good POS system.
Salon POS system
For salons, the main difference is that salon provides services and hence, does not need to maintain so much inventory items. Inventory management is easier to handle in salons as compared to retail shops and restaurants due to the lower number of SKUs. But it doesn’t mean that it is not important. Salons will still need to keep track of their inventories such as expiry dates, cost price, sale price, quantity, suppliers etc. Salons will still need to keep track of their inventories such as expiry dates, cost price, sale price, quantity, suppliers etc.
However, salons have their unique operations to handle which require the help of technology. The most basic functions will be scheduling appointments, set reminders and maintain packages. Usually, salon POS contains below modules:
Salon sales usually involves issuing of invoices, multiple payment types, voucher management, sale item combos, and salon packages. Invoices need to be maintained and tracked properly so that you know the products and packages sold, and track the payment accurately.
With an integrated salon POS system, you are able to look at sales invoices made from all salons and compare sales. You will also want to manage vouchers and free trials so as to make sure the same customer does not redeem the offer more than once.
On top of that, if customers sign on a package with you, you need to keep track of what package it is, how many sessions available and how much payment is made. Any kind of special promotions e.g. buy 10 sessions get 2 sessions free, will have to be accurately recorded in the system as well.
Precisely because prices might change, discounts and promotions are applied, and packages offered may be different, you need an advance salon POS system to help you manage all of these. You also need to manage multiple payment mode and payment types, such as 50% up-front payment or monthly instalment – offering a variety of payment types is quite common in salons that sell packages, so as to lower the barrier of payment for customers.
Some salons will offer sales commission as incentives for staff to sell more packages. In order to keep track of staff sales correctly, you will need to rely on salon POS system to reward sales commission.
Salons usually sell products that go well with their services. For example, hair salons sell shampoos, serums and other hair care products; spas sell massage oil, body moisturizer. Therefore, salons need to maintain their inventories to understand how much product sold, which are the fast-moving and slow-moving items, replenish low-stock products, classify products for sale and products for usage, and manage expiry dates.
With a salon POS system, salon owners can devise useful strategies to sell products and also control costs. Products closer to expiry date or products that are slow-moving, salons can run a sale to clear stocks or try to use them up. Without a POS system, it is not easy to keep track of expiry dates, stock count and slow-selling items. On the other hand, part of the inventories were also used to serve clients, such as shampoo used to help wash customers’ hair etc. Salon POS is supposed to help owners and managers manage all such inventories clearly so that you know what are being used, which are sold, and which are approaching expiry.
Salon POS inventory module also helps simplify the process of procurement and stock ordering. One of the reason why having a POS system is more convenient is because you can directly import stocks into the system without much manual input. You can also count stocks using electronic devices instead of manually counting one by one.
Some Point of Sale systems even allow creation of alerts when stocks for a particular product is running low. Hence salons will know when to re-order so that they won’t be out-of-stock which affects their business.
This is one of the most important modules in salon POS. Operating a salon would mean that you want to keep your customers and get them coming back. However, the offer that salons provide is different from restaurants and retail shops.
Salons usually offer customer loyalty program as a form of service package. For example, salons might request customers to purchase a $500 package and afterwards, whichever services customers go for, the payment will be deducted from the $500 package. Sometimes salon has more attractive offers like purchase a $800 worth of package at a $500 price. Or buy 5 sessions to get 1 session free. Hence salons need to keep track of which packages have customers purchased and go accordingly.
Customer Loyalty Program for salons are a bit more complicated as seen above. Salons can provide free products that come together with packages or offer bundle packages for customers to try a variety of services. Even for the most standard kind of packages, salons will also need to keep track of the progress of customers.
Hence a good salon POS system is able to track each customer and the package that they purchase. Having a good POS system also helps reduce workload of your staff, reduce manual paper work and increase customer-tracking accuracy. In a sense, investing in a good POS system not only helps employees to be more efficient, but also to be able to serve customers better when you have the right information at hand.
Discount and Promotion
Almost every kind of shop will run discounts and promotions, some even offer vouchers; but for salons, they also offer free trials or special price for first-time customers. A good salon POS is one that can help handle all these discounts, promotions, vouchers and free trials.
Usually, free trials and special price for first-timers are considered as a kind of promotion. Such promotions are beneficial to salons as you attract customers with low price barrier and could capture their information details as well for future marketing. Moreover, for salons, what’s important is for customers to experience your service, which differentiates yourself from competitors and is what makes customers come back to sign packages with you.
A salon POS can help you keep track of free trials and special prices for first-timers – they are your target marketing group. Salon POS can also help you set discount and promotion period so that prices will be back to normal automatically after the date of promotion is over. Yet, you can offer manual overwrite of prices for your staff to have the freedom to offer discounts but capped at a certain amount or will require the authorization of managers.
Schedule / Booking Appointments
Another unique feature about salon POS is the ability to maintain appointments. Different from retail shops and restaurants who may require reservations, salons rely hugely on appointment management to maintain their business.
Customers either book appointment based on their own free time, or they will look at when a particular employee, e.g. hairstylist, is on shift and want to book appointment based on that. Employees can also have a clear idea about their own working shifts, such as the working hours and venues, since salon employees sometimes work on rotational basis.
Hence, a good salon POS is one that can keep track of both employees’ shift and customers’ appointment. Internally and externally, salon owners/managers can maintain the operations of the store smoothly. On top of that, some salons will call up or send an SMS to customers to remind them of their appointments. An advance salon POS could send automated reminder SMS to customers as well.
Multiple Payment Types
Different from retail shops and restaurants whereby multiple payment mode is enough (e.g. cash, card, Alipay), salons sometimes offer monthly instalments and different payment terms. Salon packages are usually expensive, ranging from hundreds to thousands of dollars. Some customers may not be able to afford to pay a few thousand dollars at one go and will incline to opt for monthly instalments.
Therefore, salon POS is able to handle such unique request when it comes to payments. You can allow customers to pay a certain percentage first, and then pay the rest the next time they come in for appointment. You can keep track of all these payments using the POS system, instead of recording manually which might have human error.
Multiple Salon Management
The same concept as multi-store management for retail shops, salon POS should be able to link up back-end instead of operating like an individual store. This is for the back-end system to record all information and store in one integrated platform so that information is uniform and can be accessed by staff if required.
For example, a customer might redeem a free trial experience in shop A, she should not be able to redeem the same free trial again in shop B. The POS system should record such information and reflect to the salon staff. Or, customer visits shop X once and visits shop Y twice, the POS system should record in total, how many times this customer has come for services – this is more important if packages were signed so as to keep track of how many sessions were used even when the customers visit different stores.
Another crucial aspect is the management of inventories as well. Sometimes, one shop may have surplus of stocks while the other is running out-of-stock. Instead of ordering new ones, stocks can be relocated to another shop to be used or sold. An advance salon POS system should allow all these information to be shared and controlled by the back-end office.
How much does a POS system cost?
Pricing for POS system is not fixed and varies. Some companies offer free POS for life-time, yet usually such POS system has their own constraints such as very limited functions (suitable for entrepreneurs operating 1 shop with low number of stocks), or they cap at a limit such as only 50 sales invoices can be made per day.
Usually the case is that the higher the price of POS, the more advance functions it has. Therefore, large retail companies like IKEA will go for such advance POS system. Which POS system to go for, will largely depends on your budget and also the functions required.
Read this blog - Choosing the right POS Software for your Retail Store. If you are planning to buy a Point of Sale System then here are the 7 things to consider before buying a Retail Management System
A restaurant POS might have a different pricing than salon POS due to the differences in functionalities. Hence when assessing a POS system, one should go for the most suitable system that can cater to your industry needs.
Ari POS and Retail Management System is right now available at a special price of USD 49 per User per Month.
Is there a way to test drive a POS system?>
You may test drive Ari POS and Retail Management Software at no obligation whatsoever here: Ari Free Trial
Ari Retail Management System is built with the latest technology that covers multiple functions. Ari knows how competitive it is for retailers to differentiate themselves and also have to run their operations smoothly.
With the implementation of technology, an advance POS software helps retailers to reduce costs, time, manpower and human errors, so that information runs through the system on the same platform accurately. Read this blog to know the advantages of implementing Retail Management System: As the retail industry is getting competitive, retailers are looking for more ways and more advance technology to execute their retail strategies. If you are keen to win the competition, find out more about Ari Retail Management software or simply contact us for a free demo / consultation about your business.