What does point of sale (POS) mean?
The point at with a cardholder and a merchant complete a transaction. A point of sale is present both in online transactions as well as transactions that take place in brick and mortar stores.
The point of sale (or POS) in retail industries uses a software as well as hardware, and this may include a manual or electronic cash register, scanners, weighing scales, touch screen terminals, and a wide variety of other software or hardware. An example of a point of sale in a traditional brick and mortar store is the scale used to weigh goods in a traditional grocery or candy store.
Marketers put an emphasis on the POS for their products or services because consumers often making buying decisions at POS locations. Physical stores have traditionally placed their POS at store exits to increase impulse purchases by customers as they are leaving the store. Department stores have chosen to place POS at varying locations through their stores, as they’ve found this gives them the opportunity to focus on customers looking for specific product types and to influence them early in the sales funnel.
The earliest POS systems were nothing more than written receipts, but retailers now prefer electronic POS systems. These streamline the sales process, as well as allowing the merchant to collect valuable sales data. A basic POS system might be nothing more than one cash register and the software necessary to collect sales data. These can be expanded and improved upon by adding more hardware, such as barcode scanners and card readers, or additional software modules.
Depending on the software being used, merchants are able to track no only sales, but also inventory levels, gross revenues, profit margins, sales patterns and a host of other data points. This data can then be analyzed to increase profitability and pinpoint areas of weakness within the sales or inventory process. Sophisticated software can even automate ordering and restocking, as well as helping to tailor marketing based on consumer behaviour.