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Among data collection tools, the POS system can be said to be a comprehensive technique that is not only popular for point-of-sale management but also well-known for data storage and analysis. In this article, we’d like to highlight the POS contribution to data mining.
The importance of Data in Business
Data is one of the most important factors in business because it helps us to understand the problems that the organization is facing. Effective use of data assists businesses to improve performance, delivering better market strategy, reducing costs, as well as supporting faster and more accurate decisions, etc.
The following chart shows how data analysis contributes to business performance.
Thanks to data analysis, retailers can fully observe shopping behavior and habits to adjust business activities, from marketing to customer service, in the most appropriate way by collecting data from multiple channels, such as social networks, call logs, store visits, browsing histories, etc.
Besides using data to come up with the right business plan, data analysis also helps businesses find new customer images, consolidating competitive advantages, for breakthroughs movement.
You may not have heard much about the term POS data. because it is often mentioned together with the outstanding features of a cloud-based POS system. However, it is emphasized that a good POS system is completely able to collect, store, and generate business reports from the obtained data.
What is POS data stand for?
In the past, Point of Sale (POS) systems are commonly known for their ability to record data related to accounting when businesses make a sale. For example, in the typical case of a payment transaction (cash payment, or card payment), the Purchase Order information will be recorded in the POS system.
Today, cloud-based POS systems have evolved to record more information such as the number of products sold, inventory, customer profiles, and favorable purchase time, along with many other data in 4 categories: sales, products, employees, and customers.
61% of merchants prefer the data analysis feature of a POS system when considering buying a POS system. Once again, the data proves that the benefit of POS data is undeniable.
How is POS data work?
When it comes to how POS data works, we have to consider two aspects: Data input and Data output. In other words, acknowledging the information flows inside the system (from the beginning step of collecting data to the final step of exporting data) helps you to understand the advantages you would get from a POS system.
POS data collection
Regarding data input, the point-of-sale system will allow storing the information that you directly put into the system, by entering directly into the POS system, or uploading it from an excel file. Such information can include product descriptions, images of products, or the personal information of each employee.
Besides the data that you actively insert, the POS system will automatically get data from the customer (which you don’t need to do). The process happens when the order is fulfilled, added to the cart, and successfully paid. Your POS system will record and save information fields such as sales time, type of goods commonly purchased, geographic location and demographic data of shoppers, purchase date, and time.
The above data is usually collected and aggregated on basic POS systems. However, you will be able to own additional fields of information. For example, in marketing, you can get the trend data such as customer demand, portrait of potential customers, and SEO tools, if you integrate your POS system with a third party specialized in marketing solutions.
POS Data analysis generation
In addition to storing information and data, the POS system can also perform the conversion and export of important data.
To convert the types of input information, the point-of-sale software will conduct reports. There is no aspect of your business that cannot be measured and centralized through your point-of-sale reporting tools.
A POS report is like a data collection stored by the point-of-sale system. Since modern POS systems can track sales, credit card transactions, or even employee hours. As a result, they are capable of generating a variety of weekly, daily, or monthly reports.
The biggest benefit of a POS report is its visibility into trends. Such as popular items or popular purchase time, quantity sold, employee hours, etc. Modern software allows you to access your POS reports through the cloud and view them anywhere via a web portal. Plus, a survey of small businesses demonstrated that 50% of them said that pos data analysis reports are playing an important role in maintaining their POS system usage.
Why is POS data important?
Undoubtedly, POS data is vital and essential to the success of the business. By combining data POS software with other data fields, you will have a better chance of making accurate decisions. Below are the basic information fields that can be collected from any POS system
When you check up on inventory point-of-sale data, you can see what’s happening with each product in detail.
For example, you’ll be able to understand whether the inventory is shipped to the store (both online and offline store), or whether the amount of inventory sold matches sales.
Moreover, not only stopping at checking the survival of each commodity, the POS system will synthesize and provide an analysis of the indicators. Thereby, you can clearly see which items are popular.
The sales data will be aggregated after each successful order and reported by the software. Through the report, you can find out which items are giving you the most profit, which is unpopular. Some metrics of sales data you will receive from a POS software include best-selling items, sales date, sales by employee/store, gross profit, online/in-store sales.
Loyalty customer data
With this type of data, you can discern which segments to prioritize and which SKUs you should consider listing (or delisting) in your store.
Specifically, this data gives you specific insights into how your customer’s shop. It tells you exactly what items customers put in their cart and how often they repurchase that product.
You can leverage the benefits of loyalty data to cross-sell products purchased together.
Marketing and Promotion Data
You may not think that point-of-sale management software can provide marketing data. But that’s how it really is!
A POS system will allow the creation of automatic message templates and automatic discount codes. You can utilize the customer data and press the submit button for marketing promotion.
In short, POS data gives you an overall picture of the omnichannel business situation. This is especially useful for startup businesses, the owner can operate the work alone without any obstacles. Instead of hiring a management staff to aggregate data and produce reports, the POS system did it for them.
What you need to note is that you must have report reading skills, the POS dashboard will give various types of reports illustrated by column and line charts. Therefore, if you can’t read charts, you need to practice more.
POS data beneficial to business forecast
With the data and information gathered by the POS software, you can have proper future decisions, while optimizing day-to-day practices.
Good preparation of goods
By knowing the actual amount of inventory, store owners can balance the product import and export. By reading the inventory report, you can forecast the goods from time to time (seasonal, trending, customer demand) to produce, import the item with the corresponding quantity.
Specifically, by determining which items are most popular, you will promote more production or import a larger amount of such items. In addition, for goods that have a large amount of inventory, you will be able to plan on liquidating them. By only ordering or producing what is absolutely necessary, a business can limit waste or overstock of unsold inventory.
In other words, by reading the inventory report, you can forecast the goods at any time to produce, import the item with the corresponding quantity.
Precise launching loyalty program ability
Customers’ spending and purchasing habits are tracked on each order. This information can then be used to the company’s advantage by creating incentive programs to encourage customers to return.
By using POS data and utilizing the report, you’ll have more time to spend on planning other businesses ’ strategies. Upgrading to automation data collection and analysis will speed up the process, increase productivity as well as save your time and effort.
Better Employment Decision
With data on sales volume, customer traffic, the managers can adjust the workforce. Together with the help of the data report, you know how your business is doing. As a result, you will be able to increase or decrease the number of staff, for more efficient labor cots allocation.
Predict market trends
Understanding customer needs and market trends is the weapon that helps your business seize opportunities to increase revenue. The POS system will give you this power when integrating automated point of sale data and market forecasting software. From there, it can help businesses cope with market fluctuations and better prepare for future sales trends.
In fact, according to a telling number of 22% of retailers in research of Retail Consulting Partner, they take advantage of customers’ purchase history to suggest new products or services.
Multiple points of sale profit maximization
For business has multiple locations, the data from the POS system will indicate which stores have better performance. With the support of visual reports generated from the POS system, your investment decision in each location is more appropriate.
Leverage your POS data with the help of Integration
To upgrade your business data analytics functionality, you need to integrate your POS system with third-party specialized software. Because a basic POS system won’t support multiple dashboards. If your business needs are higher, you can consider integrating to manage data on the same system.
Whenever you need to improve your POS data analysis function, contact us for more advice. Beehexa brings solutions to optimize the POS systems by integration. We are sure that you will be satisfied with our dedicated service and high-qualified technology.
The data-driven consumer insights that the point-of-sale system delivers have provided businesses with a streamlined approach. It helps them provide customers with a personalized shopping experience. Therefore, you don’t necessarily need to use other data analysis services when they can be fully exploited on your POS system.
Businesses that apply modern point of sale data analysis technology will certainly have a competitive advantage.