Analysing Your POS Data: Process and Benefits

If you own a POS terminal or system for accepting card payments, you might not realize that many POS software solutions include tools for monitoring, reporting, and tracking. These features can simplify running your retail business and enhance efficiency.

Unfortunately, many business owners overlook these valuable tools. By using them, you can improve inventory management, gain insights into customer behavior, and make smarter business decisions. These steps can boost sales and support business growth.

The sales data your POS system generates can be a powerful resource for your business. In this blog post, we explore why it matters and how to leverage POS data analysis effectively.

What is POS data analysis?

First, let’s clarify what POS data is. It refers to key information about individual customers, transactions, products and employees. Most POS systems obtain data with every transaction and operation. Then, when needed, the software can generate detailed reports for evaluation.

Once the information is collected, POS data analysis comes into play, which refers to the process of reviewing and interpreting certain details to gain valuable insights into various aspects of your business. 

What your findings will be will depend on the data you’re analysing. There are several types of information that a point-of-sale software can collect, such as consumer, staff and product data.

Through point-of-sale data analysis, you can make smarter decisions to boost your business operations, improve gross profit and enhance customer experience, among many other benefits. We will discuss these advantages in more detail below.

What information does POS data provide?

POS systems gather data about transactions, including unique payment token, which is tied to specific customers or transactions, and non-unique payment token, which is less personalised and relates to multiple generic transactions.

However, a POS terminal can also collect data about buyers, employees and products. Therefore, there are several categories of data that can be obtained from a POS report. 

Here are the most common ones: 

• Sales data: Information about net sales and products sold, including the type and quantities, which helps identify sales trends, top-selling products and low-demand items.

• Customer data: Information about your loyalty program (if you have one) and customer profiles, including demographics and past purchases.

• Product data: Information about products customers returned, exchanged or refunded, which can help identify potential issues with quality or customer satisfaction.

• Inventory data: Data on inventory levels and stock movements, which helps identify when to restock or remove items.

• Payment data: Financial details, such as the payment methods used (e.g., cash, credit/debit card, loyalty card or digital wallet). 

• Staff data: Useful information for store managers about employee performance, such as the number of products sold, tips received and the times at which sales occurred.

• E-commerce data: For businesses with online retail stores, this data includes website visitors, conversion rates and online sales.

Many POS systems provide these insights in an accessible format, allowing businesses to act on them. Each type of data is useful for different areas of business management. Depending on your goals, you can prioritize one or several categories to improve performance. 

How to use your POS data analysis and what are the benefits

Analysing the reports from your POS terminals can give you a clear picture of your business performance and consumer behavior. These insights can be a goldmine for understanding how customers respond to your brand, from their in-store purchases to their interactions with your website. It helps you spot what’s working well and what needs improvement. 

When you know what’s driving sales and what’s holding you back, you can fine-tune your strategies. This is the moment when you can turn raw data into actionable data. 

For example, using customer insights, you can better manage inventory, adjust safety stock levels and even tailor your marketing campaigns to attract new customers and encourage repeat visits. All of this leads to driving more sales and boosting customer loyalty.

With data-driven decisions, you’re not just guessing. You’re making choices backed by real numbers, whether it’s about individual customer preferences or current market trends. 

Below, we will take a look at the key benefits in more detail.

Improve sales through POS data

Your POS system doesn’t just accept payments. It also generates useful information about customer purchases, like the products sold, their quantity, price, time of purchase, and even the geographical location.

By analysing POS data on a daily, weekly or even monthly basis, you can make more informed decisions that help improve your sales.

For example, if you know how much of a product has been sold and whether it was discounted or part of another promotional offer, you’ll be able to evaluate the success of your marketing plans. This allows you to see which strategies are working and which might need a little tweaking.

Effectively, POS data can also guide you towards making similar offers in the future, like reducing prices of certain products and targeting specific locations with personalised deals. By analysing these data sets, you can make your brand even more appealing, drive more traffic to your store and increase your overall sales.

Whether you own a restaurant or a retail store, understanding your product transactions can lead to offering great value and encouraging consistent sales growth.

Easily track inventory and optimise restocking

Tracking your inventory is another crucial element of running your business smoothly. After all, you need to know which products are in demand and how much stock you should keep on hand to avoid running out.

Analysing data from your POS system can help you feel prepared so you never miss out on sales or disappoint your customers. You can easily track which products are flying off the shelves and which ones are simply collecting dust. This way, you will know when to reorder and won’t be left waiting for lengthy shipments or facing stockouts.

Unlike payment token data, which only tracks payment details, analysing data from an individual POS checkout gives you a deeper understanding of your inventory needs. You can predict trends, track popular products and ensure you never run low on your bestsellers. 

By using POS data this way, you can ensure you’re always ready to meet the demand, keeping both new and returning customers happy.

Empower your staff for better performance

Another key reason to use POS data is the positive impact it can have on your staff’s performance.

Armed with this data, you can see which store associate or sales rep is performing well, and which may need additional support. The tipping features or multiple-operator modes available on some card machines are excellent tools for analysing POS staff data.

Once you have identified the struggles of your employees, you can provide further training or guidance to help them improve. For those who are excelling, you can encourage them to continue the good work and even consider promoting them.

When your staff understands the importance of output and volume of sales, you’ll have a much better empowered workforce working on your side to help your business grow.

Develop smarter business strategies

One of the biggest perks when you analyze POS data is the ability to develop smarter business strategies as it gives you a fuller picture of what’s working and what is not. By diving into customer behaviors and trends, you can make more informed decisions. 

For instance, POS data can help you identify the best times to run promotions and even determine the most effective pricing strategies.

You can even use POS data in combination with a control group to test different marketing tactics, track how customers respond and measure the success of new campaigns. This way, you’ll not only attract more customers, but you’ll also keep them coming back for more with tailored offerings.

Understand customer behavior

By looking at customer purchase history, preferences and buying patterns, you can uncover what drives their decisions. 

Understanding customer behavior is key to building lasting relationships and driving sustainable growth for your business. You can track how customers respond over time and fine-tune your approach to keep them coming back.

Use all the advantages your POS system offers

If you’re only using your POS system to accept payments, you’re missing out on its full potential.

Not crunching the data that’s freely available to you can cost you thousands in lost revenue for your business over the long run.

Take full advantage of your POS system’s value-added features and functionalities to better monitor your sales, improve inventory and stock control, as well as help your employees perform at their best.