The Importance of Data Collection at the Point of Sale

by

Analyst, Software Advice

Brick-and-mortar retailers need to meet their customers at the intersection of leading social media, technology and consumer trends. From a technology standpoint, point of sale historically meant the cash register, and for many retailers, it still is. Of course, point of sale (POS) applications have evolved with new capabilities. Today, retailers can use POS applications to better connect with customers in the store to ensure not only a current sale but future customer loyalty, as well.

“Most retailers think of just the register system, not the entire suite of applications that are a part of a POS application today,” says Dan Grady of C-CORE Consulting Group.

As retailers consider implementing these systems, they need to look over the horizon. Retailers must broaden the definition of POS from simple transaction processing to include customer data collection for future retail success. As Dan Grady notes, “I think the most common mistake is that retailers start an evaluation project without having done a roadmap on what their technology needs are for the next few years.”

To help guide retailers’ software selection, here are three areas of functionality retailers should consider when evaluating their future software needs.

1. Loyalty Features to Leverage Shopping Apps

Mobile shopping apps such as Foursquare and Groupon are helping drive more customers into the store. But retailers need to ensure that customers redeeming these deals are being segmented for marketing purposes. A year ago, I redeemed a Groupon voucher at a local retailer. At checkout, the cashier asked if I would write down my name, number and email to receive future promotions. They had the right idea but I never heard from them again – I suspect they simply misplaced the piece of paper.

The point of sale is a great time to capture customers’ contact information (digitally, of course) for use in loyalty and other marketing programs. Retailers already know that a customer using a service like Groupon is price-conscious and deal-savvy. These customers are therefore more likely to sign up for future promotions and deals at checkout, and would potentially be more responsive to different kinds of promotions than the general public. More innovative retailers can combine loyalty programs with retail customer relationship management (CRM) features such as email marketing to more intimately connect.

2. Contact Collection to Socially Engage

Customer engagement is pivotal to a retailer’s success. Brands have begun to take on online personalities, and these brands will increasingly engage with their customers through social media and online channels. One innovative example I found was in a July Mashable article. The author describes how luxury bag retailer Rickshaw Bagworks asks for the customer’s Twitter handle at checkout, then tweets a picture to that handle of the bag as it drops off the production line.

As we continue to move more of our lives onto online social platforms, the value of obtaining customers’ social media contact information will only increase. By asking customers for this at the point of sale, retailers can establish additional channels to engage and entice customers. The key is not just to collect social media information but to do something creative with it to encourage customers to evangelize your brand.

3. Traffic Attribution to Evaluate Multichannel Success

Retailers need to know what brought customers into their store. Have they shopped there before? Did a television ad prompt them to come in? Did a friend give them a gift card? Knowing why a customer is in the store can change the approach a salesperson takes with that individual to promote a sale.

Moreover, knowing where that customer came from provides critical information for the retailer’s marketing teams, particularly in the area of attribution. Suppose I Google “red Nike shoes,” click on a AdWords listing, but then go to the Nike Outlet to purchase this shoe. From the retailer’s standpoint, this was a win–they got a sale. But from the perspective of the search marketing team or vendor, the online advertising campaign was unsuccessful because it didn’t result in an online sale, or any sale they could track. Should the retailer thus spend less on pay-per-click advertising?

To answer strategic questions like that, the retailer needs more information. The opportunity here is for a POS system to capture information about the customer’s “purchase path” while they’re in the store. This could be done by a sales associate or at a survey kiosk. As an incentive for customers to provide this data, some instant reward should be given. Once captured, this data needs to be integrated and collected in an actionable format. And above all, retailers have to invest in teams to analyze this multichannel data and react to overarching trends.

The Evolving “Point” of Sale

In addition to changing how to engage the customer at the point of sale, retailers should rethink what that “point” will even be in the future. Walking the store aisles, I often find myself itching for my phone to research a product (Amazon Price Check, anyone?). This activity can put a sales associate at a disadvantage, as they may know less about their inventory and the specific features and functions of merchandise than their mobile-equipped consumers do. Equipping sales floor employees with mobile POS capabilities can help the sales associate provide higher-quality service. Apple has been at the forefront of this trend by eliminating the cash wrap and moving associates onto the selling floor, where they can provide a more consultative sale. 

Successful retailers will undoubtedly innovate around these and other emerging technologies, and guide their software selection accordingly. As retail continues to change and the definition of point of sale continues to expand, there will be other features that retailers will require at the checkout. What exactly will those features be? Feel free to leave a comment or contact me at michael@softwareadvice.com with your thoughts.

Thumbnail image created by puuikibeach.

 
  • http://www.facebook.com/profile.php?id=512412806 Daniel Alejandro Romano

    Great read.
    Customizing the experience for each shopper that has already left information about him on the POS will be must in the near future. Specially when we think about social eCommerce and the value that it should offer.

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