POS Data: How to Use Information from Your Point of Sale to Improve Your Business

POS Data: How to Use Information from Your Point of Sale to Improve Your Business

POS data | Shopify Retail blogAs many retail merchants are already aware, your point-of-sale system is far more than just a cash register. 

Sure, you can take payments, dole out gift cards to loyal customers, and perform product exchanges. But what if I told you that you could use your handy point of sale to fatten your bottom line?

With each transaction, your POS is picking up multiple bits of information that you could use to improve your business. POS data, or those little nuggets of wisdom, is a valuable tool for merchants looking to optimize their business — and it’s just sitting on your checkout counter, waiting for you to dig in. 

But what kind of data should you be looking for, you ask? While every business will find some data points more relevant than others, there are a few common bits of info that most merchants will find useful.

Ready to hear more? Let’s take a deeper look at some POS data that can bring more shoppers through your doors, optimize your marketing efforts, and give you deep insights into your ideal customer.

Inventory

This is one of the more obvious data points you can get from your point-of-sale system. The right POS (and/or the right software integrations) will automatically reconcile your inventory after each transaction. Track stock counts, and automatically stop selling products when inventory runs out. And whether a purchase is made online or in your store, your POS can track each transaction and adjust your inventory numbers accordingly.

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How You Can Leverage This:

With built-in inventory management, your POS can offer you valuable data on the availability of different products, their location (if you have multiple stores or warehouse your products), and any movement between locations. Such immediate transparency into your inventory levels allows you to adjust your product buying.

Having this up-to-date info right at your fingertips also helps retailers offer top-notch customer service. Access this data to answer on-the-spot products queries from customers. For example, if a customer would like a red skirt in a different size, you can easily access your inventory counts to see if that size and color is available.

Customer Profiles

POS data, Shopify POS customer profiles | Shopify Retail blogWhenever a shopper makes a purchase, you can collect valuable information. From names, addresses, phone numbers, as well as past purchases and their full order history. You can collect customer email addresses via online purchases and in store at checkout (merchants and sales reps can offer to sign customers up for their email newsletter). And a solid POS system can house all this data and help you construct useful reports.

How You Can Leverage This:

From all these details, you can construct robust profiles on many of your customers to use for a variety of purposes. You can use customer email addresses in email marketing campaigns, offer personalized product recommendations based on their order history, direct mailers, and create promotions based on collective shopping habits.

Order History

Shopify POS order history | Shopify Retail blogA customer’s order history lists all their previous product orders. You can track the specific items they purchased and how much each costs, along with information about the customer and when they bought the products.

As aforementioned, a robust POS will allow you to pull reports on and peruse customer order history. Search this data by product, customer, or date to get a different view and uncover any trends.

How You Can Leverage This:

Data on order histories can help you take the guesswork out of many of your promotions and marketing campaigns. Not sure if you should email discount coupons to your best customers? Or maybe host a seasonal sale? Order histories can give you more insights into what works when it comes to making the most sales.

And, based on order histories, you can also offer a higher level of personalized customer service. You can:

  • Make product recommendations/upsell
  • Create personalized marketing messages
  • Target your ads and promotions

Staff Sales

POS data, staff sales | Shopify Retail blogAlmost every POS requires that employees use a unique sign in to process a sale. Point-of-sale solutions like the Shopify POS Retail Package can help merchants manage multiple staff accounts. You can track the number of sales each employee makes, as well as what products they’re successful at selling.

How You Can Leverage This:

With unique employee accounts, store owners can track the productivity of their employees. For those staff members who aren’t making as many sales, you can provide additional training, support, or professional development opportunities to help them upgrade their skills. And it’s also easier to track and reward your best performers.

Sales Trends

POS data, Shopify POS | Shopify Retail blogBeing that a point of sale’s primary purpose is just that — to make sales — obviously any POS is going to track all the purchases that flow through your store. And while this is a seemingly basic function, retailers can glean all sorts of valuable POS data from sales.

How You Can Leverage This:

Take a hard look at your sales reports, and keep an eye out for trends. Sort through the data based on time of day, days of the week, months of the year, and seasonally. Can you spot any trends? Where are there peaks and valleys in your sales numbers? And what’s contributing to those trends? Making note of these data points can reveal some ways to optimize your hours of operation to make sure of peak sale hours and days, and staff your store appropriately based on the most productive sales days.

Returns, Exchanges, and Refunds

While product returns are probably a retailer’s least favorite task to perform, some level of returns, exchanges, and refunds is normal for any retailer. But using your POS data can help you gain some serious insights into the reasons behind refunds.

FURTHER READING: Need to build your own return and exchange policy? Use our simple guidelines for creating a flexible return policy (and how to use it to make more sales).

How You Can Leverage This:

Pulling regular reports on these activities can reveal a variety of trends. Take a look at any specific products that are regularly returned or exchanged, and make note of the reasons. Is a product defective? Or is there an item that often doesn’t meet customers’ expectations?

Also, make note of the type of refund customers prefer. Most POS systems allow merchants to refund past orders to the original payment method or make exchanges for store credit. Do most customers take the store credit option, or simply opt to get their money back? And how are these decisions affecting your bottom line?

This kind of POS data can help you make small changes, like eliminating certain products from your shelves, that could make a big impact your revenues.

How Will You Use Your POS Data?

Now that you know some of the common data points that your POS is collecting, it’s time to use it to your advantage.

Unsure if your POS captures all that important info? Read through our guide to finding the right point-of-sale system for your business.

What POS data is most useful for your business? And how will your use it? Share your thoughts in the comments below.

About the Author

Lindsey Peacock is a writer, editor, and American expat invading the Great White North. When she isn’t helping entrepreneurs build their businesses, you’ll find her at the nearest dog park with Charlie, her ginger husky pup.

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