POS systems, or point of sale systems, can significantly enhance day-to-day operations for businesses in the hospitality industry, and they can also boost the customer experience too. In this article, you can learn more about what a POS system is, how it works, why it can be beneficial, and how you can get the most from one.
- What is a POS System?
- Types of POS System
- POS Systems Elements & Tools
- What Are the Costs of a POS System?
- The Importance of POS Systems for the Hospitality Industry
- 3 Pain Points You Might Encounter When Implementing A POS System In Your Business
- How Secure is a POS System?
- POS Systems and Other Hotel Management Software
- POS Systems and Hotel Software Solutions
- The Benefits of POS Systems for Hotels
- Current and Future Trends for Restaurant POS Systems
What is a POS System?
A POS system, or point of sale system, is a system that can be used to conduct retail transactions. Essentially, it serves as a tool for processing payments, but it has a much broader range of features than a conventional cash register, allowing users to process different payment types, access important information, check stock, and more.
Within the hospitality industry, POS systems have become more popular, because hospitality businesses need to make sales while accessing the most up-to-date information about perishable inventories, and while optimising pricing based on revenue management principles. As the POS system serves as an integrated system, information like levels of stock, number of sales, and total revenue can be updated automatically, in real-time.
Video: What is a POS System? Definition of Point of Sale (POS) Systems with Examples
The POS systems used within the hospitality industry can be broadly separated into two main types. It is important to familiarise yourself with what these two types of POS systems are, how they differ from one another, and what the circumstances are for either one or the other type being used within an organisation:
Legacy-Based POS Systems
Legacy POS systems are deployed on the premises and data is stored locally, using your own computers and storage devices. The upfront fees tend to be higher, but it is generally a one-time fee, although there may be unpredictable costs associated with upgrades and accessing support if needed.
While the legacy-based approach offers a greater feeling of control, the POS system and associated data can only be accessed using in-house computers and systems. For this reason, it is becoming a less popular approach.
Cloud-based POS systems are a more modern alternative and, as the name suggests, these systems make use of cloud technology for data storage and deployment. The software as a service (SaaS) approach also means the systems can be accessed from any device that is connected to the internet, from anywhere in the world.
Those in the hospitality industry who are using cloud-based POS systems will instead pay low monthly subscription fees, making costs more predictable. However, it is a model that relies on continuous access to the internet.
POS Systems Elements & Tools
There are a number of different tools and elements associated with POS systems and those in the hospitality industry need to be aware of what these are, and how they work to contribute to the overall package.
Point of Sale Software
POS software refers to the instructions and programs that allow your POS systems to function properly. The software can include a wide variety of tools, ranging from the basics, like allowing users to access inventory information and make sales, through to more advanced features, like customer engagement functionality.
In some cases, it may also be possible to create barcodes, order new stock, manage customer loyalty schemes, and more. The software allows all of the different POS functions to be performed, but also interlinked, so that data can be used in different ways, and can be updated across the board, in real-time.
The complex range of tasks that are typically carried out when using POS systems means that POS software needs to be comprehensive in nature, and able to cope with the high demands. At the same time, it is essential that the software has a high-quality, user-friendly interface, so that employees find it easy to use.
Different Types of POS Hardware
POS hardware, on the other hand, refers to the physical components that make up the POS system. For those in the hospitality industry, some of the main examples of hardware that is needed to operate a fully functional POS system include the cash register itself, a visual display monitor or tablet, and a device for processing card payments.
Depending on the nature of the business in hospitality, different additional pieces of hardware may be connected to the POS system, including barcode scanners, weighing scales, or cameras. Over time, POS system hardware has expanded away from desktop or laptop computers, to mobile devices, including tablets and smartphones.
This mobile compatibility means that, in many cases, the tools for processing payments can be moved around the physical premises, rather than requiring customers to make their way to a precise checkout area.
What Are the Costs of a POS System?
The costs associated with the use of a POS system in the hospitality industry can be broadly separated into hardware costs, software costs, and processing fees. There is a great deal of variance in this area too, depending on how advanced you need your POS system to be, and what optional features you would like to be included.
For businesses operating on a budget, it is possible to find mobile or tablet-based software solutions, which will allow for card payments and cash payments to be processed, and the information to be linked to internal data, all at very low prices, with only a small processing fee. However, more advanced options can cost hundreds or even thousands of pounds. Generally, cloud-based solutions will have lower upfront costs.
The Importance of POS Systems for the Hospitality Industry
The importance of POS systems has grown substantially in recent times, especially as cloud-based POS systems have emerged. As a result, it is no longer enough to think of a POS system as being comparable to a retail cash register. These systems are now smart service solutions, with the power to fundamentally change hospitality businesses.
Effective use of a POS system allows businesses to deliver quick and convenient service to customers, allowing them to pay for goods and services efficiently, using a variety of methods – often without needing to head to a dedicated checkout area. However, the benefits of a POS system do extend far beyond the customer experience too.
The use of POS systems allows for instant and continuous communication between different departments and even different branches of the same business. The systems can help to eradicate calculation errors, and can also ensure all parts of a business have access to the most important information related to inventory and availability.
When used to full effect, POS systems can assist with reporting, data analytics, and a variety of other internal processes that are crucial to business success. On top of this, the best POS systems can improve staff productivity, remove unnecessary friction, automatically apply special offers to purchases, and help with business administration.
3 Pain Points You Might Encounter When Implementing A POS System In Your Business
While implementing a POS system within a hospitality industry business, there are three main pain points you may encounter. In the sections below, you can learn about these and how to overcome them.
First, it is important to be clear that the purposes of a POS system and criteria for selecting one can differ based on the size of the business. A small, local business operating in one building may only require a simple system, but if you are a hotel chain or a restaurant chain, you may need a system that can be accessed from anywhere, and managed externally. With this in mind, you should define your business, your goals, and the reasons why you need a POS system.
Next, it is important to use the scope you defined in the last step to pinpoint the functionality you need from your POS system. Do you require retail functionality? Takeaway functionality? What about a webshop? Are you in need of tools for analytics? How much customisation do you need? Within this, you also need to give consideration to your future plans and how your requirements may change in the months and years to come.
While POS systems are a powerful tool in the hospitality industry, they are not solely useful for hospitality management. In reality, your ordinary staff are going to need to use the POS systems on a daily basis, and this requires training. However, you need to think of this more holistically than simply teaching employees how to use the features provided. How can staff identify moments during checkout for upselling? Where can staff find information about products or services? Try to train your employees to make practical use of the full range of tools at their disposal.
Although point of sale systems are generally secure, they can be a point of vulnerability for businesses in the hospitality industry, especially due to the amount of sensitive data attached. For this reason, it is vital that steps are taken to minimise any threats, and these can range from providing security awareness training, to using encryption.
In order to reduce vulnerabilities, there are advantages to using operating systems like iOS for Apple devices, or Android or Chrome OS for other devices, because they are less prone to viruses and other malicious threats than Microsoft Windows. Devices should be locked when not in use, and insecure external networks should be avoided.
Hotel management software refers to any software that has been specifically designed with the aim of enhancing hotel management activities. With this in mind, many POS systems and their software could be either regarded as an example of hotel management software or could be integrated with existing hotel management software.
Read “Hotel Management Software: What Are the Benefits for Hotels?” if you would like to learn more about what hotel management software is, how it works, and the ways it can benefit hotels and their management.
POS systems are just one example of systems within a hotel that can be enhanced through the use of high-quality hotel software. Some of the other examples of hotel systems and software that can be beneficial include revenue management systems (RMS), hotel channel managers, hotel chatbots, and mobile check-in applications.
You can explore a wide range of topics related to hotel software solutions and learn about the various ways these solutions can help hotels to improve internal processes, boost business outcomes, and enhance the experience for guests by checking out the “Software Tips for the Hotel & Hospitality Industry” category.
The uses of POS systems within the hospitality industry go far beyond simple payment processing. Instead, modern POS systems form an integral part of internal communication, allowing businesses to accurately track stock levels, the number of sales made, and associated revenue, while also assisting with analytics and reporting too.
Within the hotel industry, POS systems can greatly enhance the checkout process, but they can also be used in other parts of the hotel, in order to make further sales and earn supplementary income. Additionally, a POS system can assist with upselling and cross-selling and can allow for better inventory management, among other advantages.
Read the “6 Benefits of Point Of Sale Software for Hotels” article for a more complete look at the various plus points associated with the use of POS systems within the hotel industry, along with important information on precisely how employees and hotel leaders can ensure they are getting the most out of their POS systems.
Current and Future Trends for Restaurant POS Systems
Within the restaurant industry, POS systems have a number of specific uses, which can help to improve the customer experience, while also enhancing internal processes. In particular, some trends associated with the use of these systems in restaurants include self-ordering, cashless restaurants, and mobile payment processing.
Read the “Restaurant POS Systems: Latest and Future Trends” article to explore the concept of POS systems in restaurants in more depth, to learn about some of the existing and emerging trends in this area, and to find out how POS systems can enhance the restaurant experience for employees and customers alike.