A point-of-sale software is an indispensable business analytics tool, replacing traditional cash registers with cutting-edge tech solutions that evolve constantly. Not only can these platforms ring up sales, but they're capable of much more; for example tracking inventory across various sales channels or managing employee schedules/clock-ins can all be accomplished at once. Furthermore, data can be collected to improve business intelligence and provide tailored services. We take a look at nine current POS trends that affect small businesses.
10 POS Trends & Technologies that Will Shape the Future of Retail
Untethered POS Systems
Traditional retail transactions occur at a checkout counter; modern POS systems enable retailers to be free from this. Handheld mobile devices enable associates to move freely about the store while engaging with customers, searching products and sales on handhelds, or performing transactions directly, like looking up product availability or taking orders immediately.
Mobile Point-Of-Sale systems (mPOSs) also allow orders from trade shows, curbside pickup locations or offsite events and sync these orders back with central locations as part of one seamless mPOS transaction total expected by 2023 mPOS transactions are expected to total 2.88 trillion dollars.
But that is only part of the fun; with mPOS, online sales, and social isolation all leading to changes in how customers order - either having it delivered to them directly from store locations or choosing pickup/delivery options as their preferred method - customers now enjoy more convenience in ordering everything from luxury items and restaurant meals, cars or any other vehicle they may desire.
In 2023 52% of retailers listed adding more customer pickup/delivery options as a priority; this trend should carry forward into 2023 once consumers become accustomed to this convenience. By 2025, there will likely be 85.6 million mobile points of sale (mPOS) terminals across the US; their average mobile transaction value will increase from just under $7000 in 2020 to over $11,755 by 2025, showing continued and increasing trendiness for untethered shopping.
Enjoy Seamless, Omnichannel Experiences
Omnichannel experiences combine in-store, social, mobile and ecommerce sales channels into a holistic customer view across channels. Not just a trend anymore; POS technology enables retailers to provide seamless experiences across customer touchpoints for convenience.
Different types of POS can help retailers:
- Paths to purchase that are not linear: Shoppers today don't follow a linear purchase path. Someone might first learn about your product on Instagram, browse your storefront, and finally purchase via your website. Even traditional brick-and-mortar businesses find that the buying journey has become increasingly complex.
- Ecommerce is an extension of brick-and-mortar stores: Online holiday sales will surpass $205 billion in 2023. This represents a growth of 8.6% over 2020. 58% of consumers (and 87% of GenZ consumers) say social media influences purchasing decisions.
- Click and collect strategies: Customers can shop online and enter the store to complete the transaction. They can also take advantage of curbside pickup or buy online pickup in-store. BOPIS has also seen a rise, with sales increasing from $35 billion to $83 billion by 2023.
Following COVID-19, retail executives plan to increase their investment in omnichannel sales compared to prior strategies. POS technology helps small businesses compete against larger ones with limited budgets; Square and Shopify POS allow customers to build shopping baskets online before placing the order in-store.
Alternative Payment Methods
Credit cards account for 38% and debit cards 29% of all point-of-sale payments. Cash is now only a tiny percentage of POS transactions. As consumers explore more payment options, the use of credit and debit cards is expected to decline gradually.
- Mobile/contactless payment: Digital/mobile Wallets are growing in popularity. They accounted for 6% of POS transactions in 2019, expected to rise to 15% by 2023. Google Wallet and Apple Pay are just a few payment options available.
- Amazon Pay: Since its launch in 2007, Amazon Pay is now used by 5 million merchants and Amazon Pay for Business. Through the local merchants program, it advanced plans to expand services to 1,000,000 offline merchants in 2023.
- Buy now pay later (BNPL): Credit Cards compete with BNPL Services like Klarna Clearpay and Layby, which allow consumers to purchase and pay in installments - often without interest. Research has predicted that by 2026 BNPL services are expected to quadruple, reaching $995 billion.
- Installment Payments: Even if you don't have BNPL, you can still utilize a POS that accepts installment payments. These payment plans are ideal for customers who do not have access to traditional credit. They can increase conversions, order sizes, and customer retention rates.
- Saved payments: To provide a smoother checkout process for regular customers, you can utilize your POS to securely save their payment information. This will encourage repeat business and boost customer satisfaction.
- Bill Splitting: This is an excellent option for paying with multiple methods in a restaurant.
- Gift Cards: Gift Cards are expected to grow at a rate of 16.2% CAGR from 2020 to 2027. Gift cards are not just limited to physical ones. Shopify POS offers an omnichannel experience for gift cards. Cards purchased online can also be used in-store and vice versa.
- Customer loyalty and reward programs: Customer retention programs offer incentives to encourage repeat purchases. Find out more about integrated customer loyalty programs in the section below.
- Cryptocurrency Major financial institutions like PayPal, Visa and Mastercard accept cryptocurrency.
Shoppers Can Enjoy A Personalized Shopping Experience In-Store
Nearly three-quarters of consumers believe brands must understand their needs; yet in 2020-2021, only 41% of retailers prioritized personalization as an objective due to COVID-19 regulations; now, more consumers are returning to stores, and this is becoming an increased focus point once again.
Personalized shopping experiences give businesses an edge in today's competitive environment and should be the cornerstone of customer engagement strategies. According to Report, the market for personalisation software will increase from $620.57 million in 2020 to an anticipated $1.7 billion market by the end of 2025. Point of sale system that offer customized experiences are all the more essential.
- Consumers expect it: Customized experiences are not just beneficial to consumers, but they have become a norm. They are aware that the technology exists, and their data too. Shoppers are now demanding that they receive the benefits of this information sharing.
- Customers willingly share data: Customers will share their data to receive various benefits in exchange for personalized recommendations. 39% of those surveyed find monetary compensation the most valuable. 20% would be willing to share their data in exchange for discounts and promotions based on interests. The perceived value of convenience and speed (16%) is lower than that of more responsive customer support and service (14%), new services and products (11%) and new services. According to a survey, consumers are only 23% resistant to sharing their data.
- Customer satisfaction is dependent on it: A McKinley study found that 71% of consumers want personalized interactions from companies, and 76% are frustrated if they don't get them.
- You could increase your prices: Consumers are willing to spend more money for a better shopping experience.
POS software can capture valuable information from every transaction. This allows you to build profiles of your customers and learn more about them. You can automate campaigns and personalize them over time through your POS. This allows your employees to access mPOS or checkout customer profiles.
The Rise of POS Data Analytics
Consumers typically save their purchase history, preferences and personal information if it will streamline their checkout experience and result in relevant offers. But point-of-sale (POS) data can also provide more than simply customer profiles: its metrics may reveal insights into staff performance, products sold at your store location as well as foot traffic rates, returns rates or any number of practical measures that help businesses optimize profitability and deliver excellent service to customers.
POS systems allow companies to monitor what items are selling well and which products are not. Their data also gives insight into seasonal patterns and allows you to increase margins based on pricing information. It simplifies retail data analytics while increasing sales; payment processors usually come equipped with add-ons or integrations that provide extra data points needed for making better business decisions.
- Payment processors: Best payment processors include reports on credit card sales that help you track trends such as declined transactions, returns, and more.
- Customer surveys: Many POS systems allow you to add a link to a receipt to get customer feedback. Sometimes, there is a reward, such as a complimentary beverage or a discount.
- Scheduling and time tracking: This additional feature is helpful for businesses that operate on shifts and all businesses. Suppose your time-tracking system integrates with your POS (or comes included with Lightspeed). You can compare labor versus profits or sales volume to create the most efficient schedule.
- Payroll Software: Your software can help you to determine how best to use your resources by providing insights into labor costs, such as which employees generate the most sales and tips. It can also do job costing. Square, for instance, integrates its payroll software with the POS.
- Foot Counters: People will continue to visit stores in 2023. Integrating foot counters such as Dor into your POS allows you to track the number of customers or peak hours. It gives you a base for understanding conversion rates.
Cloud-based Software Is The Future
Sharing data is critical to many benefits associated with POS technology, including personalized shopping and an omnichannel experience. Cloud-based servers run by POS companies are typically utilized for this sharing, accessible over the internet and featuring secure sections designed specifically for each business. Small businesses find cloud servers simpler and more convenient; software updates can happen more seamlessly.
Cloud-based point-of-sale systems remain an increasingly popular trend. Retailers recognize cloud systems as being of increasing priority; 22% have adopted or plan to adopt cloud systems before 2024, and another 29% intend on transitioning by that year - cloud POS could reach a $6 billion market value by then.
Upgraded POS Hardware
POS trends also encompass the development of business-friendly hardware like tablets, smartphones, barcode readers, receipt printers and cash drawers. Retailers have begun transitioning from traditional cash registers towards more mobile and flexible registers that provide greater functionality; hardware upgrades are currently the top priority of 30% of businesses.
Other POS hardware trends that you can expect are:
- Swipe transaction decline: Swipe transactions will disappear as chip readers become more common and touchless payment becomes more popular. Mastercard announced it will eliminate the magnetic stripe from its cards in August 2023. Other credit cards will likely follow.
- Bluetooth: Bluetooth is a modern POS trend. It allows businesses to connect mobile readers and peripherals without using WiFi bandwidth or increasing internet costs. The industry still faces challenges when it comes to upgrading POS Hardware. Upgraded POS hardware may cause increased network demand, theft, or additional training of sales associates.
- Self-checkouts are increasing: With a labor shortage and a rise in minimum wages, retailers continue to install self-checkout stations. This trend will continue into 2023 and beyond.
- Electronic Shelf Labels: Electronic shelves, a further labor-saving reporting feature, are anticipated to expand at a CAGR of 21% between 2021 and 2026. When the product price on a central computer changes, electronic shelf labels that display the price on them instantly update.
- Pickup Lockers: With BOPIS mainstreaming, having secure lockers where customers can retrieve items will increase customer satisfaction and reduce labor.
The Upgraded Technology in Stores Overall
Upgrades to POS systems aren't the only tech upgrades being implemented at retailers; retailers need to consider other infrastructures to ensure their POS systems can remain powered and supported. As many as half of retailers plan on replacing their POS software within three years (30% in one year); 60% plan on updating POS hardware (22% per year); half of the merchants who already utilize mobile POS intend on replacing it within three years; businesses are keen on upgrading POS technology while simultaneously updating other technologies that impact operations as a whole.
Even though an offline mode may be of paramount importance to retailers in their POS search process, internet and bandwidth should still be considered when making purchasing decisions. Retailers without robust internet connectivity may require setting up WiFi networks in their stores so employees can utilize cloud-based or mobile POS technology effectively; Field Nation predicts "low voltage data and voice cable installations will continue to rise."
Subscribe to Get Discounts
Customers can enroll in product subscription programs to receive shipments regularly, often at a discount. The pandemic has led to a surge in subscriptions. 99% of respondents to a survey said they had subscribed to at least one service by 2025. 52% of those surveyed continued the subscription following the trial period.
Three types of subscriptions are available:
- Access: These tend to be digital, such as videos, audiobooks, images, etc.
- Subscription services: Common subscription services include razors and meal kits. Clothing, cleaning products, and other household items are also included. This accounts for 32% of subscription box sales.
- Curation: The seller selects the contents of these boxes. Arion ERP is one example. Food and meal boxes were the most expensive in this micro - verticals. Clothing and fashion were followed. Curation subscriptions are the most popular in history, and this is due to their personalization. These boxes are made based on customer preferences.
By choosing a POS that allows customers to subscribe to services or products, they can easily maintain brand loyalty and keep their favorite items in stock. You can also create customized boxes for your products, which opens up new markets in business operations with a wide range of advanced features that under basic plan with real time artificial intelligence in custom fields.
Put Checkout in Customers' Hands
Restaurants and retailers of every size have taken to installing self-service kiosks to compensate for labor shortages in 2023, and this trend is expected to increase even beyond 2023. Business field services providing tools or tech to support self-checkouts experienced a 42% surge year on year in 2023 alone; demand should continue growing throughout this decade.
Self-checkouts aren't exclusive to grocery stores; retailers of any size and type can utilize point-of-sale (POS) systems that facilitate mobile checkout with QR codes, an app, or self-service kiosks that may generate more orders than ever.
Top 9 Reasons Why POS Systems Are Important
Suppose you're a retailer and you refuse to use point-of-sales methodology. In that case, you could be left behind with printed receipts, nightly inventory checks, and calculators. POS systems allow retailers to move their business into the 21st Century. Here's how:
Make Offers Your Customers Can Afford While Still Profitable For You
To effectively implement promotional pricing, retailers must carefully examine and detail items. Retailers need to know which products aren't selling as expected or are taking up shelf space - information that allows them to estimate pricing accordingly. A POS System plays an essential part here by providing inventory data, creating deals, coupons and offers, and tracking their impact on total sales - an indispensable asset in retail.
This should not only be a valuable advanced tool; rather, it should be mandatory. Customers are at the core of every deal. Sharing customer data across stores -- purchase history, interests and trends -- allows customers to take advantage of offers in all your locations via POS systems.
With no Downtime
You can still run your business even if your internet connection goes down or is slow because data is stored locally on your computer and not remotely. POS will begin working when you reconnect.
Consistent Pricing
POS makes it easy to maintain price consistency in your various outlets. Retailers have access to a digital database of products using POS. This database allows them to view and modify prices, create discounts, offer special offers, etc. This is automatically applied to all stores.
Support 24 Hours A Day, Seven Days A Week
A business owner is unlikely to think about clocking out. With POS, this is made convenient. Cloud-based applications allow the owner to check analytics on customers, sales, inventory, and purchase orders from anywhere.
Strong Inventory Management
Retailers must understand their inventory levels, what has been sold and the requirements. Traditional stock management requires merchants to review stock levels regularly; these critical processes can be time-consuming and laborious for large businesses due to manual counting and completed paperwork.
Without using a point of sale system like the POS. But with modern point-of-sale systems automating much of this work - simply scanning barcodes and entering quantity; most work will be taken care of automatically. It keeps tabs on your inventory levels, tells you when more is required by creating orders, and counts inventory on hand - giving retailers insight into managing inventory levels within minutes.
Easy Returns
POS systems can retrieve the product history of a customer. You can check what a client purchased, when, and how much. It simplifies the process of returning items if and when they are returned. The result is a more profitable business over the long term.
More Satisfied Customers
Automating tracking work orders, special orders and purchase orders using POS systems can save time and avoid mistakes and delays. The time saved by POS systems can be used to serve their customers better.
No Need To Worry About Theft
Thefts by employees and customers are a constant threat to retail stores. These losses can be excruciating. A POS system acts as a vaccination, giving you better control over your items. The better your items are tracked, the less likely they will be stolen. You enjoy a well-maintained stock. A well-maintained inventory makes it difficult to manipulate, shoplift, or take advantage of the shop.
Accept Different Payment Modes
Different businesses get paid in different ways. It can be challenging to handle. But not with POS. It accepts all payment methods, whether cash, checks, or other online transfers.
Bottom Line
Since their introduction decades ago, point-of-sale (POS) systems have changed tremendously. Modern POS trends go beyond simply accepting payments and processing sales; modern systems now feature features and capabilities that enable them to serve as virtual control centers for your business.
Thanks to its increased security measures, mobility features, and in-depth industry analysis features, POS tech is quickly becoming indispensable to retail enterprises. Read our Best POS Systems for Small Businesses guide to identify a system that best meets your requirements. Get in touch with the best and most reliable software solution to manage your point of sale business processes.
