Is outdated POS technology harming your customers’ experience?

In grocery retail, inferior technology can lead to wasted funds and shopper frustration. Implementing an effective, up-to-date technology, such as Point of Sale (POS) systems, are key to putting customers at the heart of your strategy and driving loyalty by delivering a superior shopping experience.

How good is your current POS system?

If your technology…

  • Cannot track margins efficiently > Inaccurate data or poor accounting make promotions hard to plan. It may also lead you to run the wrong programs.
  • Makes it difficult to set up offers > This limits your ability to personalise offers for the customer.
  • Doesn’t manage points smoothly > Customers may not see the value in the program if they aren't able to instantly redeem.

For retail leaders, category managers and marketing/insight teams seeking healthy margins, happy customers and lucrative promotions, cutting-edge technology is essential. Let’s examine why.

The evolution of retail technology has created unlimited opportunities to woo customers

Back in 1990, retail technology only related to the customer’s experience when they reached check-out. At that point, the technology’s role was to charge the correct price, apply sale discounts and accept paper coupons. Promotions were very simple and loyalty programmes practically non-existent.

But in just 30 years the role of POS systems has expanded enormously. They’re now key in providing information that allows retailers to track and analyse individual customer needs or preferences – and run effective, nuanced offers via loyalty programmes. Customers have come to expect sophisticated value-add and discount systems from all retailers, not just the large ones.

Retailers need much more from technology today

The importance of technology in the grocery industry has increased dramatically. Point of Sale systems now work a lot harder than before, being required to:

  • Handle best deal chains (by working out the best price on all available offers)
  • Capture point collection
  • Remove loyalty discounts
  • Handle personalised coupons
  • Print coupons/discount vouchers on receipts
  • Handle margin tracking for complex deal

However, many retailers are using outdated POS systems because of the high costs of implementing new ones. Instead, they patch together a house of cards to just ‘make it work’, rather than giving customers a top-notch experience. It’s worth noting that retailers who use their POS system in combination with other customer data often boast the most loyal customers, and increase margins where others struggle.

What are the benefits of the latest POS systems? And how do they improve loyalty?

Current state-of-the-art POS systems enable retailers to improve execution and performance in many ways. This drives improved customer experience thus customer loyalty. We look into these below.

1. Accurate margin tracking

Retailers can create maximum value for customers by optimising the use of their promotional funding.

Retailers who can accurately account for margin at item level can implement cost-based accounting. This has several advantages over a retail-based method, by allowing retailers to:

  • Base objectives on actual margin generated, instead of sales-based objectives.
  • Select promotions based on the margin return on investment.
  • Maximise margin and give value back to the consumer by avoiding waste, or the use of secondary metrics such as markdown.

Retailers can also avoid costly mistakes from inaccurate data

The current customer experience environment is very complex. Many promotions can be running simultaneously, so customers might be eligible for multiple discounts on the same product. If each discount is not applied to the proper item, you run the risk of misunderstanding the effectiveness of the promotion.

For example:

Let’s say you’re running a standard 2-for-$5 promotion, with an added $1 discount if the customer buys 4 items. If that $1 discount isn’t applied correctly, you could see inflated sales and margin when you come to analyse the promotion.

This could lead to you assuming the promotion was successful and drove incremental margin – when in fact the opposite was true. In this situation, by avoiding waste, the retailer can again deliver value back to the consumer by extending promotions to other categories or products.

2. Offer redemption

The POS system needs to enable the collection and redemption of offers, so an integrated POS should:

  • Make it simple for users to collect points and redeem offers at the same time. Customers are looking for frictionless experiences.
  • Connect to digital media sources so offers can be accepted, thus smoothing the collect-and-redeem processes. The aim is to present customers with fewer obstacles and avoid them having to remember which discounts offer the best value.

3. Offer counts

New POS systems make it quick and easy for retailers to set up thousands of offers, which supports their efforts to give customers a more personalised experience. For true personalisation – giving every customer offers on items they’ve purchased or are likely to purchase – you need to provide 1000+ offers.

Enter custom coupons

Some grocery stores are enhancing the shopping experience by using loyalty programmes paired with computerised algorithms which produce custom coupons for shoppers based on their past buying experiences. By recording every item a shopper places in the cart, these systems help determine what they're most likely to purchase, or would be interested in trying the next time they visit.

These new POS systems also let you deliver relevant offers, ones which the customer is likely to prefer, thus maximising the value they get from each campaign.

To sum up, if you want to give customers the tailored shopping experiences they’ve come to expect, the latest POS technology is an invaluable tool. Only with the proper technology can your people execute a strategy that maximises customer experience. And only with the right technology, right team and right strategy can you continue to keep customers at the heart of everything you do.

Wondering what we could do for you?

If you’d like to discuss customer centric category management implementation, please contact us. please contact us here.