Point of Sale systems are changing, and brands who are ready to take advantage of this transition are going to benefit the most. The increase in Bluetooth, NFC (Near Field Communication) and other forms of phone-based payment are becoming more prevalent, and systems like ApplePay (Bluetooth), Google Wallet (NFC) and LevelUp (QR codes) will soon become mandatory for new POS machines. More importantly, the touch screen and digital display POS machines from vendors like Square and PayPal encourage customers to interact with Point of Sale systems, allowing them to take actions like providing their mobile number, email address or buying preferences.
To understand just how fast this change is occurring, look at Square. In 2011, Square was doing roughly $365 million worth of transactions per a year. Three years later, they are doing $30 billion in transactions per year. That’s nearly a 10x increase in transactions conducted by a single new POS vendor. The rise of phone-based payments and increasing prevalence of interactive displays will fundamentally change how retailers, restaurants, and all other physical stores will accept payment.
Before we explore how to capitalize on this change when evaluating new Point of Sale systems, let’s take a look at how a successful customer of Waterfall is using their POS system to increase revenue.
How to use your Point of Sale System to Increase Revenue
One of Waterfall’s restaurant clients successfully integrated its POS system, EXPIENT Solutions, into their mobile program and has seen a 19:1 return on investment. They promoted their loyalty program on receipts and on digital signs at the drive-through. By integrating with their POS system, they were able to track unique coupon codes, giving them full visibility into how each offer was performing. Their coupon redemption rates ranged from 15% to 27%, depending on the offer. Spending one dollar and getting back $19 is fantastic, especially considering the minimal amount of effort required to get a program like this up and running.
There are two key takeaways from this case study. First, calls-to-action on receipts and at purchasing screens are an easy way to drive signups. Second, connecting your POS system to unique offer codes allows for analysis of redemption rates and specific offer performance, simply and effectively. These are easy methods for driving high-value mobile subscribers now, but the POS systems of the future will be even better for increasing revenue.
The POS of the future
Point of Sale systems are currently one of the ugliest aspects of the in-store buying experience. Some clunky machine that you swipe your credit card through… wait, wait, wait…then strange piece of ticker tape is thrown out moments later. These archaic machines do nothing to build relationships and provides the retailer or restaurant with little besides high transaction fees. It’s clear that the common point of sale system will be replaced by a newer, more interactive machine.
In a report by Mastercard, they predicted a 380% increase in mobile POS shipments from 2013-2017 and outlined the coming POS systems as being:
- Lower total cost of ownership, as many Mobile POS solutions are being offered either for free or at a very low cost.
- Better portability and greater ease of use, which are important factors for mobile merchants with no fixed place of business.
- More flexible software development platforms that can integrate with existing environments.
- Better user interfaces for both the merchant and consumer.
Looking at Square, PayPal and Toast, we are seeing POS systems that utilize large touch screens. This is great new real estate to promote upcoming sales, events, loyalty programs or discounts. We have yet to see a POS system that effectively uses this new advertising real estate, but it’s only a matter of time before someone gets it right. Some are not sure what to do with this new space; we have some ideas how to best use this real estate opportunity.
Point of Sale is perfect for CRM
This is going to sound obvious but it has to be said: when the customer is at the point of sale machine, they are your customer. No need to drive new traffic or convince them to buy something. They came, they saw, they purchased. Some companies are using this time to allow customers to save paper and have their receipt emailed to them. Why not take it a step further? Why not ask if they want to receive offers? Join a loyalty program? Or hear about upcoming events?
Don’t waste the opportunity to offer your customers a way to connect with your brand. Merchants need to take advantage of the interactive touchscreens and create an easy way for customers to give merchants their information so it can be used to build a relationship. The best way to kick off this new relationship is to provide the right offer, right then.
Point of Sale is Perfect for Mobile
Here is the second painfully obvious point: your customer is right there! Right in front of you! Right then! Loyalty punch cards for free coffee or sandwiches nailed it: I buy a sandwich, hand the punchcard to the cashier, they punch it, and I know just how close I am to getting a free sandwich.
The ability to deliver a deal immediately upon receipt creates a wonderful feeling for the customer. They leave the store feeling happy and thinking about when they are going to use that coupon. By selecting mobile as the channel of choice when interacting with customers at the POS, you set your business up for success by being able to provide immediate value to your customers. Finding a mobile messaging provider who can integrate with your POS system is key for effectively delivering promotions and digital loyalty cards. Once a customer uses that new interactive touchscreen, info is collected, and a promotion is sent right then, right there.
Point of Sale systems are undergoing a major shift. With companies like LevelUp lowering transaction fees, PayPal & Square creating low cost POS systems, and Apple Pay ushering in a new era of mobile payments, the way in which customers pay at the register is changing. It’s up to businesses to be ready to capitalize on the new real estate for promotion and use the touch screen interfaces for building longer term relationships with customers.
Now that you know what to consider before purchasing a new Point of Sale system, check out our eBook on how to create effective Operational Alerts.