How to Choose POS System in 2024: A Seven-Step Guide

May 2, 2024

Operating any type of store, whether it’s a retail outlet, bakery, or restaurant, requires the use of a POS system to record each transaction. Some establishments may require functionalities like inventory tracking or integration with membership and reservation systems.

By employing a POS system, businesses can track, analyze sales performance and streamline their operations, saving considerable time for management and marketing planning.

Different businesses require different types of POS software and hardware. But how do you select the perfect POS system for your business? This article will walk you through the decision-making process.

Related Article: What is POS? Explore the 2024 Checkout Technology Trends

Seven Key Steps for Choosing a POS

With a multitude of businesses and POS to choose from, it is essential to evaluate your own requirements. Here are seven critical steps to keep in mind when choosing a POS system:

  1. Identify Your Business Type

    Different POS service provider specializes in different industries, such as restaurants, beverages, retail, and even niche markets like bakeries. Thus, the first step in selecting a POS system is identifying if your business fits into the retail or food service sector, or possibly another category.

    Some POS providers even offer the POS solutions tailored to businesses with special requirements. Here’s a brief overview of POS types and their primary functions, beyond just checkout:

    POS TypesPOS FeaturesApplicable Stores
    1. Product Procurement, Sales, and Inventory Management
    2. Raw Material Inventory Management
    3. Raw Material Costs Record
    4. … and more
    Various types of retail stores such as bakeries, convenience stores, clothing boutiques, supermarkets, curated shops, and sports equipment stores, and more.
    Hospitality (Food Service)
    1. Meal Ordering System
    2. Reservation System
    3. … and more
    Restaurants, cafes, fast-food restaurants, employee cafeterias, student canteens, beverage shops, food trucks, snack stands, and more.
    1. Reservation System
    2. Room Booking System
    3. Loyalty Program
    4. … and more
    Beauty spas, hair/nail/lash salons, pet grooming salons, medical aesthetic clinics, massage therapy spas, fitness gyms, yoga studios, hotels, and more.
    HybridCombine the functions of Retail and Hospitality POSSome establishments with various services. For example, restaurants that also sell meal kits (dining + retail); gyms that provide fitness classes, healthy meals, and sports equipment (service + dining + retail); and cinemas offering movie tickets, popcorn, and movie-themed merchandise (service + dining + retail).
    Omni Channel IntegrationIntegrate all data from online and offline channels, including sales, inventory, member information, and marketing activities.Businesses that have both online and offline channels
    CustomizedDiscuss with the system/software provider for customized features.Large chain enterprises and businesses with specific requirements for POS.

    ▲ There are countless types of POS systems, and the first crucial step in selecting one is determining the nature of your business—whether it’s retail, food service, or others. (Photo by Shutterstock)

  2. Identify Your Product Type and Payment Modes

    Even in the retail sector, sales models can differ significantly. We can take into account the factors like:
    (1) Product Type
    (2) Product Discount and Combo Options
    (3) Delivery Service and/or Integration with Delivery Platforms
    (4) Requirements for Inventory Management

    When it comes to payments, although most POS providers offer integration with various payment services, it’s still a good idea to confirm which transaction methods you would provide for consumers:
    (1) Accepts cash only, credit cards only, or both
    (2) Support for various digital wallets, like Apple Pay or Google Pay
    (3) Any service fee, like a 10% charge?
    (4) Provide receipts?

    Understanding your sales and payment methods assists in selecting the appropriate POS solution

    ▲ Assess the payment options you want to offer your customers
    (Photo by Christiann Koepke on Unsplash (Left) and Clay Banks on Unsplash (RIght))

  3. Note the needs for Online and Offline Integration

    In the digital age, the boundary between online and offline retail has become blurred. Numerous businesses, regardless of whether they have an official website or e-commerce platform, actively participate in online marketing or incorporate services from platforms such as Google, Facebook, Instagram, or LINE.

    For businesses already operating an e-commerce platform, it is crucial to integrate member data between online (e-commerce) and offline (POS) to maintain consistency.

  4. Plan Checkout Counter Space and Store Design

    In our increasingly aesthetically-conscious world, stores with stylish or unique decor tend to stand out and attract customers. Therefore, many businesses today invest considerable effort into their interior design.

    As the focal point at the checkout counter, a POS system’s size and appearance also plays a role in the store’s overall aesthetic. In recent years, compact and sleek tablet POS systems have garnered increasing attention from businesses.

    Tablet POS systems not only save space but also offer mobility. In retail settings, they can be brought directly to customers to assist with inventory inquiries, while in dining establishments, they enable table ordering or can be placed directly on tables for self-checkout, providing flexibility for both businesses and customers.

    ▲ A tablet POS is space-efficient, portable, and offers great flexibility. (Photo by Shutterstock)

  5. Assess Peripheral Equipment and Explore New Technologies

    Besides the POS system, POS peripherals such as card readers, cash drawers, scanners, and printers could also be taken into account. Integration of these devices requires careful planning to maintain a seamless customer experience.

    With advancements in technology, some businesses are incorporating AI into physical stores to simplify processes and enhance operational efficiency.

    For example, before implementing AI, the primary checkout challenges faced by bakeries and restaurants included slow checkout speeds and the high time cost of training staff to identify barcode-less products.

    Because most bakery items and meals lack packaging and barcodes, cashiers must manually identify and input each item into the POS system, resulting in lengthy checkout times and ultimately impacting sales.

    To ensure staff accurately identify products, businesses must invest significant time and effort into training employees to memorize products. What’s more, the high turnover rate of frontline staff requires ongoing training investments.

    Taiwanese bakery chains such as I Jy Sheng, RT Baker House, and Hi Noode, the noodle brand under Haidilao, have adopted the Viscovery AI image recognition system to automate product identification tasks, streamlining the checkout process, reducing checkout times, and effectively lowering training costs.

    I Jy Sheng Chairman, Mr. Liao, shared at the BNEXT summit in April, “New employees were considered as liabilities for the initial three months. However, with AI now able to recognize bread, these employees quickly transition from liabilities to assets as they can immediately manage the checkout process.” This illustrates how AI can tangibly improve operational efficiency for businesses.

    ▲ AI-powered image recognition in bakery (Photo by Viscovery)
    ▲ AI-powered image recognition in self-service noodle shop and employee cafeteria (Photo by Viscovery)

  6. Compare the User Interface

    After selecting the POS system that meets your needs, you can review the user interfaces of each option to narrow down the choices to a few systems.

    Every POS system’s interface and features are designed based on the needs of their previous users, meaning there’s no one-size-fits-all solution—only what suits your requirements.

  7. Budget

    Finally, consider your budget. POS systems vary in pricing models, from one-time purchases to monthly subscriptions.

    If there’s no immediate need for hardware like card readers, receipt printers, or barcode scanners, you can simply use a tablet (Android Pad or Apple iPad) paired with a monthly subscription POS software to get started right away.

    As mentioned in What is POS? Explore the 2024 Checkout Technology Trends, “With various checkout tools available,… it’s essential to choose the one that meets your product and business needs.” Understanding your requirements enables you to allocate your budget wisely and make informed purchases.