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8 Ways To Make the Most of Your Retail POS Data

Organized inventory, more sales, and bigger profits.

Sound good? It’s all possible — with the right data. And you can get that information from a modern point of sale (POS) system. Without retail POS data, you’re left guessing. What do your customers want? Which products are your top sellers?

You can’t know unless you have the data.

In this article, we dive deep into retail POS data and how to make the most out of it. From sales trends to customer data and inventory insights, you have a goldmine of data at your fingertips.

What Is Retail POS Data?

Your POS system doesn’t just process transactions and track sales totals. Modern POS software now links various areas of your business and provides a central place to run your retail store.

You can see detailed transaction data, customer shopping habits, and inventory demand. When a customer buys something in your store, your POS doesn’t just ring them up. It records each item plus any available customer identification through loyalty accounts and credit card numbers.

You’ll also get granular data on bestselling products, purchasing trends, individual customer behavior, and more. Beyond transactions and sales, you’ll get insights into inventory metrics, such as stock levels, turnover rates, and shortage rates.

Related Read: How To Increase Inventory Turnover: 6 Ways To Optimize Your Inventory

You can view all of this data in custom reports and a single dashboard (with the right retail POS system) and make better decisions for your store. Let’s look at how you can use retail POS data in your business.

Segment Your Customers for Personalized Marketing

Segmenting your customers simply means dividing them into groups based on demographics, purchasing behavior, price sensitivity, and more. You can develop targeted marketing strategies when you know who buys what and when.

Related Read: How To Improve Retail Customer Management With a POS

For example, let’s say you run a sporting goods store. You discover three customer segments:

  1. Brand loyalists who repeatedly buy Nike gear at full price. You could reward these members with early access to new Nike releases.
  2. Bargain hunters who buy sale items from various sporting brands. You could send weekly promotional emails to these customers, spotlighting deals.
  3. High spenders, who account for a large share of revenue. These are your VIP customers. You can offer perks like free shipping and point-based loyalty incentives.

Customers crave personalized experiences, whether in-store, online, or both. And many are willing to give you their details if it means they’ll get personalized deals and discounts. Signing customers up for loyalty programs is a great way to personalize marketing.

#2: Plan Promotions

Be proactive rather than reactive. With retail POS data, you can plan promotions based on purchase trends around holidays, events, and seasons. For example, there might be a spike in football gear around the start of the NFL season — you could offer a 20 percent off promotion on crewnecks.

Related Read: 6 Proven Holiday Promotion Ideas for Small Businesses

Look for regular spikes and dips to make the most of your POS data. Other opportunities for promotions include:

  • Back-to-school flash sales
  • Holiday promotions like Thanksgiving, Christmas, and Easter
  • Other major sporting events like the Super Bowl or the start of regular NFL, NHL, and NBA seasons

Using retail POS data takes away some of the risk when planning promotions.

#3. Improve Inventory Management

Inventory management is one of your biggest challenges. The trick is to have enough inventory to satisfy your customers without overstocking, which leads to waste and lost sales. Granular POS data reveals inventory turnover, velocity, and more.

You can analyze past purchasing trends across seasons, events, and promotions. No more guessing — you can forecast inventory needs based on real data. You can also identify your top-selling products to keep stocked and slow movers to phase out.

Related Read: Retail Inventory Management Software: 5 Top Solutions and Providers

A mixture of historical and real-time sales patterns allows you to project demand. 

You notice that Nike shoes are hugely popular, with demand exceeding available inventory. However, Wilson tennis rackets and shoes see inconsistent sales based on seasonality. You can now:

  • Forecast higher demand for Nike shoes with a new model launch. You can increase future purchase orders to build up inventory ahead of the new release to avoid stockouts.
  • Increase Wilson tennis shoes and racket inventory by 20 percent during spring and summer to meet temporary demand, then reduce carrying costs in the slower winter months.

With granular inventory management, you can lower carrying costs and avoid losing sales.

Invest in a System With Matrix Capabilities

While optimizing inventory based on sales and forecasts is important, a POS system with matrix capabilities is just as essential. You want to make inventory management as easy as possible.

Let’s say you sell various styles and sizes of Nike shoes. For example, you might sell:

  • Styles: Air, Pegasus, and Dunks
  • Sizes: 5, 6, and 7

You can assign details such as style and size to one sneaker item instead of creating each variant as a separate SKU. Inventory would show:

  • Shoe, Pegasus, size 7
  • Shoe, Dunks, size 6

Managing inventory is much easier when you don't need to create a new listing every time you introduce a new style or size.

#4: Optimize Product Placement

Product placement directly impacts sales, especially in brick-and-mortar retail. Shelving real estate is valuable — what customers see at eye level and on endcaps should draw their attention. 

Retail POS data reveals which items actually sell best in your store so you can decide which merchandise deserves prime real estate. For example, bestsellers are proven winners. They deserve the best placement.

POS data also reveals which items are bought together. For example, our sporting goods store owner could:

  • Display water bottles, sports drinks, protein bars, and cooling towels in a dedicated section to entice active shoppers.
  • Merchandise Wilson rackets, balls, grips, wrist bands, and court shoes together to upsell to tennis enthusiasts — especially in spring and summer.
  • Create a gift section with branded sweatshirts, water bottles, towels, and duffle bags.

Bundling complementary products encourages customers to spend more.

Related Read: 4 Unexpected Cross-Selling Strategies To Increase Sales

#5: Experiment With Store Layout and Design

As well as product placement, POS data can help you plan your store design. Which departments drive the most revenue? If it’s your shoe section, you could expand and position it toward the front of your store.

Also look for traffic patterns. How do customers browse your store? You can influence this using displays and in-store signage. If you’re having a sale, direct customers there first, and then use signage to direct them to your new stock. It’s all about creating an experience for shoppers.

Related Read: How To Attract Customers With 5 Creative Retail Window Display Ideas

Consider your brand identity. From the moment customers enter your store to the moment they check out, what they see should represent your brand. From color to fonts and messaging to branded products, you want customers to remember your store.

#6: Test Pricing Strategies

Do price changes impact sales? Are your prices competitive? You can answer these questions using retail POS data. Granular transaction history makes it possible to adjust prices on certain items and then clearly track purchase trends in response.

The key is to try little experiments instead of making sweeping changes. For example, if you notice a decline in sales of a particular shoe, you could lower prices by 10 percent for a 4-week trial. When you see a 30 percent spike, you know it worked.

Also look at competitors’ pricing. Do they sell the same products for cheaper prices? How can you compete? It’s not always worth it — depending on how popular the item is. Nobody wants to be in a race to the bottom.

Product quality, customer service, and the overall shopping experience all play a role in developing your pricing strategy. Find out more here: How To Price a Product for Retail: 5 Steps to Success.

#7: Manage Operations Effectively

It might sound obvious, but the busier your store, the more staff you need. However, your store will be busier during certain times of the day, week, month, and year. Retail POS data shows peaking purchasing time, letting you schedule adjustments based on sales trends.

For example, you might see more families in your sporting goods store on a Saturday morning or just before kids are due to return to school. You can schedule more staff to be on hand to answer questions and highlight back-to-school promotions.

If evenings tend to be quieter, you could schedule less staff or use that time for employee training or even physical stock counts.

Last, cloud-based POS systems integrate with customer relationship management (CRM) platforms, accounting software, and e-commerce platforms. Sharing data across these systems lets you manage your operations from anywhere.

#8: Manage and Train Employees

Managing employee schedules is the tip of the iceberg.

You can also track employee performance using retail POS data. Start by tracking the average order value, gross and net sales, items per order, and number/dollar amount of returns or discounts processed per employee.

Using this data, determine who your top-performing employees are and those who might need more training.

Related Read: 8 Must-See Tips and Ideas for Retail Customer Service Training

For example, top-performing employees might be better suited to the shop floor, helping customers find what they need. You could also schedule top performers to work during your busiest shifts to maximize sales.

Retail POS data is a goldmine for identifying strengths, uncovering opportunities, and measuring progress.

Use Retail POS Data To Drive Your Store’s Success

Retail POS data is a competitive advantage. It gives you insight into various areas of your business, from sales to inventory and customer preferences to employee management.

You can take out the guesswork when it comes to strategy. You’ll feel confident about decisions around pricing, promotions, merchandising, store layouts, and more. The key to a more profitable retail store is leaning on data to make better decisions.

Comcash provides a retail POS system capable of collecting data and presenting it in customizable reports. You’ll have insights for:

  • Inventory management
  • Various sales reports
  • Customer loyalty data
  • Employee reports

…and more, depending on what you need. Your POS system is more than just a cash register. Explore our POS system today by scheduling a demo with our retail experts.

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