You may not have realized it yet, but your point of sale (POS) terminal (POS Analytics ) is a treasure trove of data that can be used to better the retail game you are in. POS is a staple in every retail business, but what is not régulier yet is the utilization of all of its reporting features.
A majority of retailers continue to use the POS system solely for ringing up sales. However, with advancements in data analytics, retailers can go beyond using it as a mere tool for completing transactions and utilize the valuable data captured by this same system to elevate their game.
Most modern POS systems can provide valuable insights into key metrics, including sales, customer profiles, profit margins, and inventory levels, while also supporting marketing efforts.
In this post, we are going to tell you about at least five areas in retail wherein you can use your “cash register” data to maximize business, including in retail marketing.
But before that, do understand that today’s Point of Sale (POS) solutions can get as sophisticated as you want them to be. An integrated POS terminal can function as both a countertop unit and a smartphone.
These sophisticated POS systems come equipped with features designed to capture all kinds of data to boost sales. Therefore, if you are a retailer, even one without an online presence, you should invest in one.
At the same time, while a POS does capture all that critical data, a retailer may not necessarily be seeing the “larger” picture.
This means that simply capturing data is not enough. To leverage that data, retailers must deploy POS analytics and leverage it in their day-to-day operations.
POS analytics refers to the deployment of a set of analytics and business intelligence tools to help you make data-driven decisions that improve your retail margins.
Here are 5 Ways You Can Use POS Data to Drive Retail Growth
To Get Customer And Product Insights
Insights from past outcomes help you shape promotional pricing strategies. POS data helps you gain very specific insights into consumer behavior and the extent of popularity of products.
It helps retailers track which consumers prefer which items and how often they purchase them. What POS analytics does is provide a retailer with the history of orders, as well as the trends in sales for every product in the store.
Once you analyze a particular customer or group of customers’ purchase habits, a retailer can scientifically forecast and plan for the future. This data can then inform how to price and promote products or services to generate more revenue, as well as how to optimize the supply chain.
Using POS analytics, retailers can identify their most successful products and also continuously refine their product line.
To Upsell and Cross-Sell
Retailers that operate both online and offline need to combine data from both channels to gain a comprehensive view of their customers’ shopping journeys. This form of analytics can be used to pair fast-selling products with either free (promotional) or paid products that complement each other.
From the product sales data. When you match a customer with product sales data, it reveals, among other things, which products the customer frequently purchases.
You can then make a spot offer on a complimentary product and present it only to that customer in real-time. For example, if Mary Doe often buys milk, you may then offer her a brand of cheese at a reduced price. Alternatively, you can try positioning another brand of milk at a lower cost to Mary.
Insights into such trends enable retailers to make informed decisions about individual customers.
For Inventory Control
All of the above helps you keep track of your stock count, even in real-time. Even today, it is found that many small and mid-sized businesses either do not track their inventory or rely on a manual stock-taking process.
Inventory control is a crucial component of any retail operation, and inadequate management can result in substantial losses. To implement effective inventory management, retailers need to automate the process. This is where POS analytics helps.
A modern POS solution provides details such as the number of products in stock, return management, purchase rates, and other relevant information. Utilize this analysis to optimize your real-time inventory control.
A POS helps retailers track items every step of the way – from the time they enter the store to the time they are bought (or not). Not only does this enable retailers to make informed decisions while forecasting, purchasing, and ordering, but more importantly, the POS data helps ensure that stock levels are optimized.
You need to have the right products at the right time in your inventory to achieve business success. What’s more, as your retail business grows, so does inventory complexity. This means retailers need to have a POS system that tracks not only transactions but the inventory at the store and even warehouse levels.
If you want to be even more sophisticated, your inventory information can even be linked to your vendors. Such a “smart” system means the vendor will replenish stock to meet demand as needed, requiring minimal human intervention.
For Effective Marketing and Sales
Based on individual customer likes and dislikes, POS analytics enables personalized promotions.
Point of Sale (POS) data can help in two ways: determining the optimal price and promotion strategies for products, and effectively positioning them for success. It will help you understand which products to promote or remove from the shelves.
Whether shopping online or in a real store, customers now expect a personal experience. The POS data helps retailers provide that by using data analytics to learn about their customers’ needs. This, in turn, means it helps retailers increase customer lifetime value.
Help make business decisions scientifically
You may not have considered it in this way, but POS data analytics helps deliver insights in almost every aspect of your retail business, thereby helping to improve it scientifically.
Not only customer-facing, it helps retailers resolve “behind-the-scenes” operational problems, such as identifying inefficiencies in the system, identifying opportunities, and standardizing processes.
Conclusion
A point of sale terminal is no longer a simple till machine. Technology has converted it into a powerful tool and a must for every retail business today. Because of its ability to capture data, it is a vital instrument for retailers to maximize information, enhance customer experience, anticipate demand, and optimize stock, among other benefits, all of which ultimately boost business.