What is EPOS and How Does it Work?
Have you joined the 21st century yet? If you're in retail or hospitality, doing business in the 21st century often means fitting an Electronic Point of Sale System or EPOS, basically a clever piece of kit designed to help you run and manage your shop or hospitality business better - more efficiently, effectively and in a much more customer-centric way. By the end of this comprehensive guide, you'll know all about EPOS, what EPOS systems consist of, and how they work. And that means you'll have a clear idea of whether or not you need one.
What is EPOS?
The abbreviation EPOS simply means 'electronic point of sale'. At its heart, an EPOS system is basically a till built to take payments and provide receipts. The really clever bit is the software that comes with it. As a manager you log in to discover how your business is doing and understand real-time stock levels. You know where your inventory is and how many products in which categories you're selling the most of.
EPOS lets you integrate a wide range of essentials including accounting software and the ecommerce side of the business, and every good EPOS system lets you manage employees more effectively. If you want insight and information as well as a fast way to collect a wide variety of different types of payment, an EPOS system provides exactly that – and it's a brilliant marketing tool as well.
The next section describes the practical aspects of EPOS systems.
What are EPOS systems?
EPOS systems are made up of three key elements - software, hardware, and a payment system. Together it's their job to save money, speed productivity and increase sales, as well as helping you to run the business effectively day to day. Combining cutting edge tech with reliability and efficiency makes it a hugely popular choice. So how, exactly, does EPOS work?
Most EPOS systems include a physical drawer for cash, chip and pin functionality or contactless payment capability, a display, a keyboard, a printer and often a scale to weigh things. The data entry itself happens via PC keyboards, touchscreen monitors, and barcode scanners.
EPOS is nothing if not flexible. Say you run a high-demand, busy retail outlet like a supermarket. You can configure your EPOS system to work closely with barcode scanners to make the job faster for employees and ensure the prices are always right. EPOS is perfect for recording sales and keeping stock levels up to date, and speeding up customer service. It even helps business owners keep track of taxes.
The printer element lets you hand over printed sales receipts and vouchers. You can set up special offers and reduce prices quickly and accurately. Touch screen technology means the processes are intuitive, fast and simple. Mobile tablets let your employees take payments on the go, carrying connected devices around the store to take payment to customers rather than make customers queue at a payment station. The software can either be hosted in the cloud or on regular servers, and adding a payment gateway enables you to process payments direct to your business bank account.
As such some of the key functions supported by EPOS systems include efficient purchase order and sales processing, reliable stock control and inventory tracking, and seamless eCommerce integration. You enjoy the ability to create attractive customer loyalty programmes, promotions and discount offers in no time, and also understand exactly how the campaigns have worked in terms of response and revenue.
How do EPOS systems work?
It helps to understand the basics around how typical EPOS systems work. Imagine a customer presents an item at the checkout, which an employee scans with a barcode scanner. The scanner links to a list of products and prices, calculating and presenting the amount the customer has to pay, including any special offers you might be running. The customer pays using one of several authorised methods, quickly and painlessly.
Assuming your customer has a loyalty card, the system can read the card and attach information about their purchase to their customer record, giving you an insight into a person's buying habits and providing more information you can use to run special offers to targeted groups of customers. And of course, the fact that someone has bought an item, therefore depleting your stock, is also noted by the system, with its stock status automatically updated.
You hand the receipt to the customer, which might include a money-off offer on their next purchase. If so, the system records that fact against the customer's record or account. And the system reports back to you on any number of factors you've defined beforehand. As you can see, EPOS helps you please your customers at every stage. This enhances your brand, encourages loyalty, and brings new customers your way thanks to word of mouth recommendations.
EPOS system benefits
EPOS systems provide many benefits to both customers and retailers. For retailers, it means easily centralising the management of multiple sales channels, something that would otherwise involve complex spreadsheets and tricky, risk-rich updating by hand. Automated stock and inventory management becomes wonderfully simple, and at the same time utterly reliable and accurate.
Providing actionable reports and insight means you know more about your business, customers, brand, products and more than ever before. And faster transaction processing keeps customers happy, especially at busy times. The potential for manual errors is removed almost completely – although inputting the wrong data in the first place never ends well! With Big Data the name of the game these days, it's easy to collect and analyse mountains of relevant and highly valuable details about each customer. And physical risks like employee theft become much less likely thanks to an EPOS system.
How about the benefits of EPOS for your customers? Their orders are processed faster. People can pay by a convenient choice of methods, from simple cash and cards to electronic payments methods like Google Pay. The consistent allocation of discounts and promotions across all sales channels drives more sales and helps seal people's loyalty to your brand.
The only downside, if your business is small or a start-up, is the initial cost. Obviously, the up-front cost of something all-singing and all-dancing is more than the price of a simple cash register or POS till that only takes money and doesn't connect with other systems. It depends on your plans. If you have big plans for growth and expansion, EPOS future-proofs you. If you like to keep your business life simple and have low key plans a till might be your best bet, at least in the early days.
The team here at KFP have a wealth of varied experience and expertise in retail IT and, importantly, EPOS systems. If you'd like to explore the potential with a professional, we'll be pleased to help. We even provide top class EPOS installation services. And if your current EPOS system could do with refreshing, we can help you with that as well. Feel free to contact us.