Types of POS: which one is for you?

Types of POS: which one is for you?

April 26, 2022

Roman Davydov

Ecommerce Technology Observer

As more and more transactions are migrating to the internet, consumer-oriented organizations keep on investing in the adoption of commerce tech stack. For instance, in 2021, 85% of retailers considered the growth and expansion of their digital commerce as a top business priority, according to the RCP survey.

Obviously, accommodating the growth of online transactions is critical for business success, but still we shouldn’t forget one essential thing. Online is just one of the aspects of customer service, and 42% of customers want a seamless experience via all channels anytime, anywhere, according to Experiences Customers Want study by Wunderman Thompson.

The importance of an omnichannel strategy for ecommerce companies

In other words, enterprises striving to remain competitive must focus on delivering end-to-end customer service, which is almost impossible without a point of sale, or POS solution. Using a POS system, an enterprise can not only automatically estimate the amount of money buyers should pay but also transact payments and ensure that the level of stock and sales numbers add up.

Despite all the advantages POS systems may bring, an enterprise cannot simply implement the first option they come across. After all, purchasing or developing an ill-suited POS may not only prove useless for meeting your specific business goals but also result in a waste of a significant investment.

In this article, we will explore what POS systems are, what functionality they have, and what types of POS solutions there are on the market. With this information, you will be able to determine whether you should pick a turnkey POS or rely on POS software development to get the tool that matches your needs.

What is a POS system?

In short, a POS system is a two-part solution that consolidates software and hardware and whose major goal is to unify and administrate routine commercial processes.

At the simplest level, a POS system fulfills the role of a sales register that enables teams to receive payments and ring up sales. However, POS solutions have evolved over the years and today help enterprises keep track of their inventory, marketing campaigns, and human resources, with some including such modules as analytics and CRM.

Now let's discuss the two fundamental parts of any POS system:

POS hardware

The hardware (PC, self-service kiosk, mobile, or any other transaction-processing mechanism) makes up the first half of any POS system. The selection of particular hardware depends upon several factors, for instance, whether your employees scan the commodity before the transaction, if they accept payments standing at the counter or moving around the store, and so on.

Examples of POS hardware

POS software

POS software enables enterprises to accomplish sales transactions. There is a broad spectrum of POS software for organizations to select from today, with the choice depending on such parameters as devices utilized by your enterprise, whether you sell your goods on the internet and have physical stores, and many more. POS solutions may have varying feature sets, so here is a full list of potential POS capabilities:

POS software features
  • Payment processing

One of the primary targets of a POS system is to handle and streamline transactions made by store visitors. Since people don't like to wait, short transaction execution time is pivotal to any consumer-oriented enterprise, so make sure to check if your POS system has robust payment processing features by default. In a perfect scenario, POS should be versatile and support various banknotes, cards, and online payment options.

  • Sales management

A POS system doesn’t only streamline transactions but also collects information related to those transactions. A merchant can later utilize this data to create reports on their sales results, while customers, in turn, can receive an invoice in the form of a paper or electronic check and can later show this document as evidence of their purchase.

  • Inventory management

A fully-equipped POS system can facilitate inventory management by enabling teams to oversee the amount of the commodity sold. Given that a solid POS system would automatically draw detailed stock-related data reports, merchants are freed up from conducting recurring manual stock-taking. What's more, if your POS system is connected to a corporate eSourcing solution, they can exchange data to automatically build purchase orders for suppliers when some goods are low in stock.

POS as a link between the warehouse and sales channels
  • Order management

Some POS systems permit customers to book items that retailers currently don’t have in stock via a dedicated user interface on a website or a mobile app. Then, when the expected product arrives, your team members can notify the customer about it. This way, order management helps you better cater to your clients' needs.

  • Employee management

At a first glance, it seems that POS systems have nothing to do with personnel management. Nevertheless, you can pick up sales and transactional data from POS to identify your most productive team members as well as those who do not perform well and take appropriate actions to optimize your employees' workload and workflows.

  • Customer relationship management

With a built-in CRM module, a POS system will allow you to create customer profiles complete with each person’s contact and demographics data, history of purchases, and preferences, and provide functionality for enhancing their loyalty. For instance, you can utilize POS to manage loyalty programs.

  • Marketing management

If your POS system collects customer data, you can use it to create more targeted offers, run marketing campaigns, or offer personalized discounts based on audience categories, location, best-loved products, and more.

  • Reporting and analytics

As we’ve mentioned before, a POS system can gather and preserve a broad array of data, from contacts and preferences to information about your salespeople and stock. Therefore, encompassed with a built-in analytics module, a POS system can let you gain an overview of your business, track sales efficiency via specific channels, and come up with more evidence-based strategic decisions. In case your POS system is equipped with business intelligence capabilities, it can also provide more sophisticated evidence-based insights on how you can amend your business profitability and efficiency.

All in all, the adoption of a POS solution can afford you an opportunity to cut costs, think out more reasonable business decisions, and, consequently, boost revenues. Now, as we have defined a POS system and its feature sets, let’s look into the types of POS solutions.

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Types of POS solutions

There is no universal classification for POS solutions, so we categorized them based on several characteristics.

POS by a deployment option

  • On-premises POS
On-premises POS infrastructure

These POS solutions (occasionally called traditional or legacy POS) are set up on physical servers near or right at the stores. On-premises POS are relevant for those enterprises that opt for full control over their infrastructures and have enough resources (both human and technological) for sustained maintenance and development.

  • Cloud POS
Cloud POS infrastructure

Regarding functionality, on-premise and cloud POS systems are analogous, with the only exception that the latter provide teams with unique capabilities of the cloud technology. In a cloud POS system, your data can be synchronized in real-time, which can be critical for any enterprise that has multiple sales channels.

If ensuring a stable and uninterrupted internet connection is not a challenge, any organization can benefit from deploying a cloud-based POS system. Such solutions can be upscaled without much effort, so you can scale up your cloud POS in line with your business growth.

POS by the end-device

  • Desktop POS

If your salespeople utilize desktops and laptops to conduct their daily tasks, your organization should look for a desktop POS system. This software can be complemented with mechanisms such as scanners and card readers and work as a static cash register.

  • Mobile POS

Despite the fact that mobile POS is a relatively new solution, it can still be integrated with traditional transactional devices like scanners or card readers. The primary goal of mobile POS is to facilitate swift and reliable wireless transactions.

  • Tablet POS

The fundamental difference between a mobile and a tablet POS is that the latter interoperates with tablets only. Tablet POS systems are normally deployed by restaurant chains, embedded as stationary points of sale or at a  patron’s table.

  • Terminal POS

Like the previous three, this POS system involves the application of a particular device – a POS terminal (or EFTPOS). These tools, which today can be found in almost every physical store, support chips, magnetic contactless cards, and any device with NFC.

  • Self-service kiosks
An example of a restaurant-based self-service kiosk

Today we can hardly find a person who has never encountered a self-service kiosk, as they are often found in McDonald's, Starbucks, or any other fast-food restaurants. The main advantage of such devices from the customer’s point of view is that they allow ordering food, goods or services without coming into contact with the staff. From a business standpoint, kiosks are just as valuable, since they speed up and simplify customer interactions, helping an enterprise serve a large number of people without compromising the quality of customer service.

Other types of POS

  • Online ordering POS

Designed specifically for digital channels of client engagement (either an app or a website), this type of POS software is capable of processing orders on the internet. Online ordering POS is widespread among restaurants and food chains, since they can generate order tickets and collect customer payments.

  • Open-source POS

The main advantage of open-source POS systems is that they can be integrated with almost any third-party services via APIs. This makes this type of POS perfect for enterprises that want to have an opportunity to quickly embed additional features.

Also, an open-source POS system may be an optimal choice for organizations that aim to reduce their software development cycles. The open-source nature itself allows developers to quickly expand corporate POS software with functional modules, deploy updates, and identify and eliminate bugs.

  • Omnichannel POS

If you want to establish multiple sales channels at once (such as a physical store, website, marketplace, or social media), an omnichannel POS solution can centralize them all, thereby helping you expand your customer reach. Most often, such POS systems are quite versatile, because they provide a wide array of instruments for running a retail enterprise and cover aspects such as CRM, as well as order and inventory management.

  • Industry-specific POS

Considering that retail is not the only industry involved in vending products and services, some POS systems may be designed and tailored to the peculiarities of a particular industry. So, while restaurants may opt for solutions that are capable of managing loyalty programs and menu prices, merchants may select POS systems enabling them to run ad campaigns and measure profit margins.

How to choose a suitable POS solution?

Now that we've covered the main capabilities and types of POS systems, we should discuss the process of selecting your future POS solution. Here, your best strategy is to conduct corporate research and figure out your requirements, as this will help you understand what you need and what you don't. Therefore, you may start by asking yourself these or similar questions:

  • What devices/hardware will I use?

The response to this question determines which POS system you require – a desktop, mobile, or tablet POS.

  • What payment options should I support?

Here you should define if your POS system should cover several payment option types or if you are going to offer only the most popular choices.

  • What minimal set of features should my POS system provide?

Finally, you need to understand what basic and advanced functionality you need the most in your POS system: whether it should have tools for creating orders, filtering inventory by category, or built-in artificial intelligence for advanced analytics.

Once you have determined the basic requirements for your POS system, you can conduct market research to see if it is possible to find a turnkey solution that checks all the boxes. But if you need a solution perfectly tailored to your unique business processes and workflows, you can also consider developing a POS solution from scratch. If you still cannot make up your mind, you can also turn to third-party consultants who will analyze your requirements and offer the most relevant POS adoption option.

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Getting the most out of your POS

With customers wanting a seamless and outstanding experience all the time and across all channels, managing a consumer-facing business has become more challenging than ever. In this context, implementing the relevant type of POS system seems a logical choice for any company that strives to meet customer expectations and remain competitive.