The term “Point of Sale,” also simply referred to as “POS,” is a phrase that describes the physical location where customers purchase goods. Nevertheless, this location is more than merely a store or structure in which items are sold.
As Investopedia explains, on a large scale the POS could be a city, a market or a mall. However, POS usually refers to a more specific area in which the final transaction is made, such as a cash register or computerized checkout counter. In fact, according to most retailers in today’s business world, the POS may even be the software application itself that is used to complete the purchase.
For instance, at a restaurant, the POS may be a computerized system used for many different purposes by staff members, such as ringing up orders, creating receipts, and finalizing transactions. The most basic of methods involve manually calculating purchases and generating receipts, but computers, terminals and mobile devices can act as POS locations as well.
Last-Minute Purchases are Big Business
The Point of Sale for services and products is an essential focus for marketers and retailers, as consumers often make purchasing decisions directly at these strategic locations. This is true even for high-end services and products, and therefore it is important for marketers to pay attention to consumer research reports and the buying behavior of customers in their targeted demographic.
For example, businesses have traditionally set up POS systems near store exits to boost the number of last-minute purchases consumers make as they leave the building: everyone is familiar with checkout aisles in all types of retail stores, and these aisles are rarely, if ever, empty. Rather, they are filled with items that consumers may choose to purchase simply because they are waiting in line and a tempting product is offered at a reasonable price.
In this hot zone of last-minute decision making, the design of the POS space is key. Specialists such as IDW commercial refrigeration, which provide those checkout lane soda and water mini-fridges we see in stores, offer a wide range of design options in anticipation of client requests to precisely attract consumer attention. The existence of these services highlights the importance of developing successful POS space in nearly every retail scenario.
Most individuals find items such as candy bars, crackers, and bottled water appealing, particularly after a morning or afternoon of errands when they may be getting hungry. This is a great example of a strategically placed POS that virtually always offers a return to the retailer.
Fine Tuning Through Consumer Research
Many retailers also fine-tune their POS by conducting appropriate consumer research and following trends. A good example of this is how savvy retailers reacted when low-carb diets became very popular several years ago. During certain decades, it was probably unlikely that a person would see a hard-boiled egg packaged with some sliced cheese in the front counter of a minute mart’s snack section. However, during the low-carb diet craze, almost all retailers in the food industry offered such products and strategically placed them for impulse buyers.
This is the same approach embraced by retailers that place the most popular children’s items or candy where they cannot be overlooked by youngsters who instantly begin tugging their parent’s arm, pleading their case for the purchase.
Department stores also frequently place a POS for specific product groups, such as apparel, electronics or appliances, in designated locations. In certain cases, these displays are staffed with employees whose job is to actively promote certain items and guide customers through purchase decisions, rather than merely completing a transaction for the consumer.
The POS format can also affect the buying behavior of consumers, and the profit margin for the retailer. For instance, when customers have flexible options for completing transactions, they may spend more and return to that retailer multiple times in the future. A good POS system can also improve customer service and check-out efficiency, which boosts consumer retention and buyer satisfaction.
Benefits of Computerized POS Systems
Electronic POS systems streamline retail transactions by automating the entire buying and selling process and tracking essential sales data. Depending on the specific software features, merchants can track sales patterns, gross revenue, pricing accuracy, inventory changes and even add a program enabling customers to complete a quick survey about their satisfaction level with the transaction.
Using integrated technology of this type can also help businesses find cash flow or pricing discrepancies that could interrupt sales or lead to profit loss. Additionally, POS systems capable of monitoring buying trends and inventory can help merchants avoid customer service issues. Having this data allows all retailers to customize their Point of Sale locations, thus creating a positive buying experience for each customer, and ultimately increasing their success with today’s consumers.