Now we’re onto the important bit – payments. The term ‘point of sale’ evokes images of the actual machine at the counter, but it turns out there’s more to it than that. A lot more, in fact.
“Because point of sale is linked to so many different things, it can’t be taken in isolation – it has to be integrated and talking to other things,” says Bruce Hutchings, managing director of Kudos Solutions.
When we talk about point of sale, we’re actually talking about a retail store’s brain – a system that is connected to ecommerce; accounting; data reporting; email and SMS marketing; loyalty and payments.
Hutchings says there are a number of point of sale products on the market that are tailored to particular types of retail. While green retailers may be tempted to go for simplicity, Hutchings says they shouldn’t be afraid to pursue a system that offers more information as it will become more relevant as their business grows.
“Look carefully at what it is that you require – you are going to be dealing with multiple technologies and business partners – make sure each is expert and proficient and they are not going to become a weak link.”
He recommends prospective retailers talk to other people in their sector and ask what they’re using. Kudos specialises in fashion, offering colour and size matrices as part of the package, but also mentions products targeting pharmacies and whiteware merchants.
Hutchings is an advocate of omnichannel technology, saying life can be made easier by a point of sale provider that can offer integrated solutions. Kudos handles website design and hosting as well as point of sale, allowing information to flow between online and physical stores.
“There are no external interfaces to create fail points – stock, customers, loyalty points, gift vouchers flow to all contact points.”
Loyalty programmes seem like an optional extra for those new to retail, but actually, they’re essential. New Zealanders are a nation of loyalty card holders – with nearly 2.5 million members, Fly Buys has one of the highest penetrations of any loyalty programme in the world – and as well as encouraging a closer relationship, loyalty programmes are a valuable way to collect customer data.
Independent research conducted in 2015 by consumer demand agency TRA for NZRetail indicated that the main outcomes customers desire from a loyalty programme is exclusive discounts, pricing or offers; rewards they value; and ease of earning points. Kiwi shoppers are very value-focused, so they need to be reassured that they’re getting meaningful and useful rewards out of their programme.
The same research indicated the main research retailers see from their loyalty programmes are:
- Changes in customer behaviour through the incentives offered by the programme.
- Improved customer retention through increased loyalty and value for existing customers.
- Maintained or increased sales, repeat purchases, margin and profits.
It’s worth putting some thought into providing some rewards that won’t erode your bottom line. At a talk last year, Aimia vice president Asia Pacific Simon Rowles declared, “Death before discounting!” He likens giving away rewards with a monetary value to trying to pay a friend for a personal favour, saying loyalty should be about deepening the customer’s relationship with the brand.
“The move we’re seeing is away from rewards and towards a personalised relationship.”
Hutchings says the point of sale system should help keep track of it all: “Your point of sale system should allow your customers to accumulate and redeem loyalty points both in-store and online.”
As the customer’s buying history grows, he says, you will be able to use that data to build targeted marketing campaigns based on their preferences, brands, shopping patterns and more.
“This is really using the power of your point of sale system and getting a real quantifiable payback.”
Click and collect is a growing international trend that’s now offered by larger players like The Warehouse Group and Countdown. Research quoted by Retail Services’ Russell Sinclair earlier this year indicates bringing customers back in to the store to collect their online purchase can result in additional sales up to 23 percent of the value of the online sale.
Hutchings says getting click and collect right as a small business requires keeping an eagle eye on where your stock is sitting: “If somebody comes into the store and buys the last product, you want it to come off the website immediately.”
A good point of sale system should help you keep track of stock – including from the shop floor. Cloud-enabled mobile point of sale systems are increasingly favoured by premium international retailers like Apple, which has done away with the front counter altogether. Allowing staff to make financial transactions on the spot encourages them to mingle with customers and improves the customer experience.
Hutchings says retailers should expect their point of sale system to be capable of this, and also give them instant access to stock and customer history information.
“Your daily sales statistics, stock on hand, staff productivity, shopper stats etc should all be instantly available across all mobile and desk devices.”
As with ecommerce, supplier support is crucial when it comes to point of sale systems. As the point of sale system is critical to transacting sales, it can’t be allowed to remain offline while the provider takes its time to respond to your complaint. Its support service needs to be reachable seven days a week.
“No, you don’t want to be emailed back with an answer tomorrow – you need an answer now,” Hutchings says.
He also warns retailers to be mindful of what the provider’s support agreement covers, as software, PCs, tablets, point of sale hardware, Eftpos and peripherals can all be involved.
“In your retail business, you embrace your customers and you should look to be treated in a similar way when you deal with your point of sale provider.”
Retailers should also have access to enhancements as part of their software as a service (SaaS) agreement or through a formal support contract.
If your chosen system is based on SaaS, you may be able to pay for it with a monthly fee or offered an outright purchase. Going with the purchase option on a lease-to-own basis over a term of 36 months may be the most economic option if your ambitions are long-term, says Hutchings.
When it comes to hardware, Hutchings says some customers prefer to buy peripherals like receipt printers, cash drawers and scanners as these can be expected to last more than five years. However, he advocates leasing most hardware, as it will likely be required to change with the advance of technology.
This story originally appeared in NZ Retail magazine issue 745 August/September 2016