Results from the 11th Annual Retail Info Systems/IHL Group Store Systems Study show that 30 percent of retailers plan a new point-of-sale investment in the next 12 months. More than half will purchase POS software to allow mobile commerce and eCommerce. Are you one of them?
Buying your own system may be a higher upfront cost, but it’s cost-effective over time. “Avoid leasing a POS system,” cautions Ben Dwyer, founder and president of Middletown, CT-based Cardfellow, which offers advice to small business owners. “Leases result in a final cost that is significantly greater than the original purchase price of the software.”
Here are some of the ways point-of-sale systems help small retailers manage their businesses and their bottom lines:
- Inventory control: Most POS systems provide inventory monitoring, which helps you know what’s on shelves and in the backroom without having to actually go look. That’s a huge win for sole proprietors who don’t want to risk leaving the register or storefront untended. It also keeps you from running out of stock or over-ordering. “With better visibility into my inventory, I’m better able to order replenishments cost-effectively,” says Summer Bicknell, owner of Locopops, maker and seller of gourmet frozen treats in Durham, NC.
- Payroll processing: Some POS software integrates with payroll processing programs and providers, so you can track hours, calculate commissions and taxes, and even issue checks or direct deposits. These systems can also keep track of wage/salary and W-4 data, as well as vacation, unpaid leave and sick days. Having all this information in one place, and accessible and automated from a POS terminal saves time and money. “Payroll processing time has been cut in half by exporting timecard data directly to my processor,” Bicknell says.
- Push marketing: Today’s POS displays, whether a terminal or a tablet, provide appropriate resolution to support short marketing content. “Some retailers push advertising, coupons and loyalty programs onto the POS screen, which requires a terminal with multimedia capabilities and a more graphics-rich user interface,” says Todd Trammell, senior product line manager with Broadcom in Irvine, CA. “They just need to make sure all of this functionality meets the necessary security standards.” Added bonus: You can program deals, specials and affinity discounts directly into the system to make these transactions accurate, fast and automatic.
- Credit card processing: A credit card or customer data security breach can scare off even the most loyal customers, and cost you in terms of legal and other fees. “Leading-edge POS systems offer immediate, end-to-end encryption of the card data,” explains Bruce Sussman, director of information security and compliance for Wyndham Worldwide in Parsippany, NJ. “Such systems eliminate the millisecond between the instant that the cardholder enters their data and the next instant when hackers can utilize viruses and malware to intercept the card data.” Other POS systems support tokenization, which replaces the actual card data with substitute data that has no value if stolen. Remember that security also is crucial if you’re gathering customer data beyond sales history to use for personalized marketing and services. Your CPA can help you identify point-of-sale software that meets current security standards.
A point-of-sale system is one of your best business partners. Choose it as carefully as you would a co-owner, advises Russell Harty, senior vice president of key accounts and partner channel sales with Merchant Warehouse in Boston.
“The biggest mistake small retailers make when considering a POS system is not thinking about long-term flexibility with regards to their solutions,” Harty says. “Decisions on POS should be made with growth and scalability in mind. You want to make sure the solution you choose is one that can support your business not only today, but also tomorrow, especially when we start to consider emerging payment [methods] and how they will impact your business.”
Margot Carmichael Lester
Quill.com Contributing Writer
Margot Carmichael Lester is a freelance business journalist and consultant in Carrboro, NC. She grew up in a family-owned gourmet grocery and understands the special challenges of running a small business.