The retail industry is growing at a breakneck speed. The National Retail Federation forecasts that retail sales will reach $5.28 trillion by the end of 2024, a 3.5% increase from 2023.
Your point-of-sale (POS) system needs to keep up. From mom-and-pop shops to sprawling retail chains, the right POS can be the difference between thriving and surviving.
Ahead, you’ll learn the requirements of a modern POS solution, exploring both the hardware and software. Whether you’re upgrading your existing setup or starting from scratch, the following POS system requirements will ensure you find the best fit for your business.
Core requirements of a POS system
Hardware requirements
When setting up your POS system, picking the right gear is important. Each piece plays a role in making your retail operations run smoothly and keeping customers happy.
Here is a list of the must-have POS hardware for a modern setup.
Terminals or tablets
POS terminals and tables are the brains of your operation. These devices run your POS software and handle all the business transactions. They also let staff check inventory, process sales, and manage customer data.
Picture this: A hip clothing boutique using iPads as mobile POS terminals. Staff can zip around the store, assist customers, and close sales on the spot. No more long lines at the checkout counter.
Barcode scanners
Barcode scanners are essential for quickly and accurately adding items to a cart. They read barcodes and input the product information into the POS system.
Imagine a bustling home goods store during a holiday sale. Those handheld scanners work overtime, helping cashiers blitz through long lines of décor items and kitchenware without breaking a sweat.
Receipt printer
Some 42% of consumers still prefer a physical receipt, which keeps receipt printers relevant even in the digital age. They print itemized lists of purchases, totals, and other relevant information. While many customers opt for digital receipts, physical receipts remain important for returns, expense tracking, and some loyalty programs.
Cash drawer
A survey from the Federal Reserve found that cash was the third-most-used payment method in 2023. Despite the rise of cashless payments, it’s clear that cash isn’t going anywhere just yet, which means you’ll need a cash drawer.
Cash drawers these days are pretty smart, too. They pop open automatically when you finish a cash transaction and can securely hold bills and coins.
Card readers
Card readers let you take all sorts of payment methods, like credit, debit, and contactless. A modern card reader can handle it all: chip cards, good old swipe cards, and even phone payments like Apple Pay or Google Pay.
Software requirements
Software requirements are the features and functionalities your POS system will require to meet the needs of your staff. Here’s a breakdown of the key components that will improve your store’s customer service.
User-friendly interface
Your POS system needs to be easy to use. Look for a system with intuitive navigation, easy product lookup, and streamlined transaction processes. For example, a well-designed interface might feature clear, logically organized menus that help staff complete sales quickly, even during busy periods.
Inventory management
Your POS should track inventory in real time, automate reordering, and provide insights into product performance. For businesses with multiple locations, look for systems that offer multi-store inventory management, allowing you to track and transfer stock across different stores or warehouses.
Imagine getting an alert when your bestsellers are running low or receiving suggestions for markdowns on slow-moving items—that’s the kind of functionality you want.
Sales reporting and analytics
Comprehensive sales reporting and analytics tools give you valuable insights into your business performance. These features should help you understand sales trends, identify peak shopping hours, and track product popularity. For instance, you might use this data to adjust your inventory for seasonal demands or optimize your staffing during high-traffic times.
Customer relationship management (CRM)
Good CRM functionality helps you build stronger customer relationships. It should store purchase histories, preferences, and contact information. With this data, you can personalize your marketing efforts. Think targeted promotions based on past purchases or loyalty rewards for your frequent shoppers.
Employee management
Managing your team should be a cinch, not a headache. Look for features that help you juggle schedules, keep an eye on who’s crushing it in sales, and control who has access to what. It’s like having a mini HR department in your pocket. Use it to spot your rising stars or figure out who might need a little extra coaching.
Integration with other systems
A good POS system plays well with other business tools. Consider how it integrates with your ecommerce platform, accounting software, or marketing systems. For example, syncing with your online store could enable real-time inventory updates across all sales channels, helping prevent overselling and improving customer satisfaction.
Payment processing
Ensure your chosen system supports various payment methods, including cash, credit cards, mobile payments, and gift cards. The ability to handle contactless payments, split transactions, or process refunds easily can improve the checkout experience for both staff and customers.
It’s not just the ability to process payments that matters—how much you’re charged to do so is important too. Payment processing fees eat into profits. These usually range between 1.5% and 3.5%, but can be up to 6% of the total transaction amount.
Shopify Payments is capable of processing credit and debit card payments, as well as mobile wallets and buy now, pay later transactions—all without finding a third-party payment processor that charges additional fees that eat into your profits. These fees are competitive: Shopify Payments fees range from 2.4% to 2.9% of a purchase, plus a flat 30¢ transaction fee, depending on the purchase method.
Industry-specific POS requirements
Different industries have unique needs for point-of-sale systems. Knowing these requirements can help you choose a POS solution that streamlines your operations.
- Omnichannel retailers
- Apparel retailers
- Health and beauty retailers
- Home furnishing brands
- Sporting goods retailers
- Restaurants
- Service-based businesses
Omnichannel retailers
Retailers juggle a lot to keep their stores running and customers happy. Managing complex inventories and handling high-volume transactions and staffing can feel like you never get ahead, especially when you’re juggling multiple sales channels.
That’s where retail-specific POS features come in. They help you keep stock in check, zip through transactions, and make customers feel like VIPs, no matter where they buy. Here are some to look for in an omnichannel retail POS system:
- Inventory tracking: Real-time monitoring of stock levels to prevent stockouts and overstocking.
- Loyalty programs: Tools to create and manage customer reward systems, encouraging repeat business.
- Multi-store management: Centralized control for businesses operating multiple retail locations.
- Marketing tools: Built-in features to create and track promotional campaigns and discounts.
- Cash management: Functions for accurate cash handling, including drawer counts and end-of-day reconciliation.
- Buy now, pay later: Integration with popular BNPL services to offer flexible payment options.
- Gift cards: Can sell, redeem, and track physical and digital gift cards.
- Staff and user management: Plan retail rotas, let staff clock in and out, and sync data with payroll for accurate payouts.
- Flexible reporting and analytics: See what is (and isn’t working)—not just for your retail store, but every sales channel you’re using to sell to customers.
- Customer profiles: Can you collect and reference customer data—such as previous purchases made online and in-store—from your POS system?
Apparel retailers
Selling clothes, jewelry, or shoes? There are some unique POS requirements to consider when building out your fashion POS system, particularly:
- Variant management: Clothes come in different colors and sizes. Check that your POS system supports variants to accurately keep track of individual SKUs so that you can pick the right products during fulfillment.
- Seasonal reporting: The apparel business is highly seasonal—you’ll sell more dresses in summer than the colder months, for example. Your POS system should offer seasonal reports to monitor these trends and plan inventory accordingly.
- Returns management. Product return rates are highest in the clothing industry. Add returns, exchanges, and refund management to your POS requirements checklist to process returns faster and more efficiently, no matter where the shopper bought.
“Unifying our commerce stack on Shopify has noticeably improved our omnichannel customer experience and our bottom line,” says Guillaume Jaillet, chief omnichannel officer at Frank and Oak. “We’re spending less on technology, there’s greater synergy between our sales channels, and we’re cultivating more loyalty and engagement at every level of interaction.”
Health and beauty retailers
Retailers in the health and beauty industry typically offer subscriptions and cater to different customer preferences. Here are the POS requirements you’ll need to check for when evaluating a new system:
- Expiry date tracking: Cosmetics have a limited shelf life. Choose a POS system that lets you track these expiration dates to prevent dead stock.
- Customer profiles. Beauty products are incredibly personalized; customers might have their own preferred shade or a particular pain point that they’re solving (like dry skin or wrinkles). Make sure that your POS can store this data in customer profiles to offer personalized retail experiences.
- Subscription management. Two in five female cosmetics consumers are interested in subscribing to a beauty box. Your POS system should be able to manage these subscriptions—from the initial signup process to automatically generating packing slips for fulfillment each month.
Home furnishing brands
Furniture can be big and bulky—you probably don’t have enough space to store high quantities of each SKU in your retail store. That presents the need for the following POS requirements:
- Multi-channel inventory management. If you’re storing home furnishings off-site (like in a shipping warehouse), choose a POS that has multichannel inventory tracking for complete visibility over your stock.
- Order fulfillment: Shoppers might not be able to fit heavy or bulky items in their car to take home same-day. Make sure that your POS system is capable of offering services like ship to home.
- Lead time management. Furniture is known for having long lead and manufacturing times. Capture customers who are interested in products that you don’t currently have in-stock with pre-orders and “back in stock” notifications.
Sporting goods retailers
Whether you’re selling sports equipment or apparel, retailers in this industry have unique use cases for their POS system, such as:
- Rentals and leasing. Squeeze more money out of your inventory, and cater to climate-conscious shoppers, with the ecommerce model. Shopify POS integrates with apps like Product Rentals Pro for real-time visibility into your leased product’s whereabouts.
- Serial number tracking. Sporting items like bicycles, gym machinery, and golf clubs have unique serial numbers that must be tracked for warranties or repair purposes. Your POS system must be able to store these attributes for reference—not just by you, but your customers as well.
- Repair and maintenance services. Offbeat Bikes, for example, uses Shopify’s unified POS system to manage ongoing service and repairs. Its retail team creates draft orders to invoice these customers and keep its records organized.
“Shopify allows me to do what I actually care about most, which is making sure my customers are having a great experience when they’re interacting with my shop in any way, whether that’s online or through social media or when they come by in person,” says Mandalyn Renicker, owner of Offbeat Bikes.
Restaurants
Restaurants have to manage the front of house, keep the kitchen moving, and make sure customers leave with full bellies and big smiles. The right POS system can help turn tables faster and keep orders flowing.
These are the must-have POS system features to keep restaurants running smoothly:
- Table management: Digital system for tracking table status, reservations, and optimizing seating arrangements.
- Kitchen order printing: Automated system that sends orders directly to kitchen displays or printers for improved accuracy and efficiency.
- Menu customization: Tools to easily update menu items, prices, and modifiers to accommodate specials, seasonal changes, or dietary restrictions.
- Delivery and takeaway options: Integrated features for managing off-premise orders, including delivery tracking and takeout scheduling.
Service-based businesses
Running a salon, spa, or other service business comes with its own challenges. You’re managing time, talents, and client relationships. An effective POS system helps these businesses schedule client appointments, keep clear records, and get to know customers better.
Here are a few key features to look for:
- Appointment scheduling: Manages bookings, staff availability, service duration, and client preferences.
- Service tracking: Tools to record and monitor services provided, including detailed history and performance metrics for each service type.
- Client management: Database for storing client information, preferences, and service history to personalize experiences and inform marketing efforts.
Advanced features to look for in a POS system
POS systems have come a long way in recent years. Top systems pack some seriously impressive features that can give your business a competitive edge.
Here’s a rundown of some advanced features to look for when shopping for a new POS.
Unified commerce functionality
In physical stores, through your ecommerce website, on social media—it doesn’t matter where you sell. As your business grows, it's critical for your frontend and backend systems to talk to each other.
Your POS system should be capable of unifying your data wherever you interact with customers. Platforms like Shopify, for example, combine your sales, customer, and product data in a single system so that you can centralize your data and make accurate, strategic decisions with ease.
The added benefit of unified commerce is that it lowers the total cost of ownership of your POS system. You’ll need fewer subscriptions to different apps that plug functionality gaps, and lower implementation costs due to having one single business brain. It’s no surprise that our data shows that Shopify’s TOC is 33% better, on average, than its competitors.
Contactless payments and digital wallets
CNBC reports that 51% of US consumers now use contactless payments. A POS system that lets you accept these payments shows customers you’re up with the times. Plus, it speeds up transactions compared to traditional chip cards.
Imagine running a busy coffee shop where the morning rush is no longer a headache because people can pay with a quick tap of their Apple Watch. That’s a smooth operation.
Cloud-based POS for remote management
Some business owners have to work on the fly, and that’s where cloud-based POS systems come into play. With this feature, they can access real-time data and manage operations from anywhere with an internet connection.
Want to check in on your retail stores quickly while on vacation in Santorini? A cloud-based POS can do that, plus you can monitor sales, adjust products, or review staff performance remotely.
Omnichannel capabilities
Customers expect an effortless shopping experience, whether in-store, online, or on their phone. An omnichannel POS system can tie everything together and create a consistent experience across all your sales channels.
For example, a customer could start an order online, modify it in-store, and complete the purchase through a mobile app, with all interactions synced and visible in the POS system.
Data security and compliance
Advanced systems offer robust POS security features like end-to-end encryption and fraud detection algorithms. It also keeps you compliant with industry standards like PCI-DSS, so you can protect sensitive customer data and maintain trust.
Overall, a POS system with strong security features can help a business prevent data breaches and avoid costly fines for non-compliance, giving customers peace of mind when making purchases.
Get started with Shopify POS
Looking for a new POS system with all the best features for retailers? Shopify POS has you covered. From inventory management to customer insights, it’s packed with tools to streamline your operations and boost sales. Explore Shopify POS today and discover how it can take your retail business to the next level.
POS requirements FAQ
What are the functional requirements of a POS system?
The functional requirements of a POS system typically include inventory management, sales processing, payment handling, and reporting capabilities. These core functions allow businesses to track stock levels, process transactions efficiently, accept various payment methods, and generate insights from sales data.
What is a POS qualification?
A POS qualification refers to the certifications or training programs that validate an individual’s knowledge and skills in operating point-of-sale systems. These qualifications can be offered by POS software vendors, retail associations, or educational institutions, and they demonstrate proficiency in using POS technology and understanding related business processes.
What does POS mean?
POS stands for “point of sale,” which refers to the place where a retail transaction is completed. It often describes the hardware and software system used to process sales, manage inventory, and handle various aspects of customer transactions in retail environments.
