The cost-of-living crisis is putting businesses in a double bind. On the one hand, with energy and other commodity prices soaring, companies are seeing their own costs rising and their margins eroded.

At the same time, their customers are feeling the pain, too. Consumers have less in their pockets to spend, so naturally they become more cautious and buy less. Across the board, retailers, restaurants, bars, hotels and leisure and entertainment venues of all types are therefore seeing their revenues decline.

Just when you really need income to increase to cope with rising costs, you may well instead be seeing sales slide the other way.

This isn’t a situation business owners can stand by and watch unravel. The big question is, what can you do about it? Taking steps to help customers save money with smarter purchasing decisions is one way to protect revenues. And your POS systems have a key role to play.

Bridging the affordability gap

It’s hard for businesses to cut costs in the current climate. Working hard on cutting deals with suppliers or finding alternatives will only get you so far when inflation is so high.

A lot of businesses are therefore looking at what they can do from the other side – keeping customers spending. This normally boils down to holding or even cutting prices, even if that means eating further into margins. At times like this, it can be better to turn a small profit with steady sales than risk seeing revenue take a steep dive by raising prices to offset costs.

We’re seeing businesses frame this in a particular way – ‘helping customers with the cost-of-living crisis.’ Another way of describing it is ‘bridging the affordability gap’. It demonstrates how tuned in companies are to the importance of maintaining strong relationships with customers through tough times. If you look after them, they will look after you.

Examples include Halfords dropping prices across motoring categories and strengthening its price guarantee on MOTs, as part of a strategy focused on keeping car maintenance and road safety affordable. Curry’s, meanwhile, has not only frozen prices on a range of appliances, but also introduced a deferred payment scheme on home essentials.

And then there’s the pizza shop in Edinburgh that has taken the extraordinary step of handing out free pizzas throughout January.

Information, savings, loyalty

Keeping things affordable in difficult times is of course the crux of any effective support businesses can give to their customers right now. But it isn’t all about slashing prices across the board. What modern customers want just as much is clear, readily available information that will help them buy within their budgets.

This expectation has been conditioned by the internet age. The first response of the modern consumer to having to tighten their purse strings is to get online and shop around for the best deal. But it is something businesses can help their customers with in store, too.

Think about the way self-service kiosks can be deployed, for example. As well as being there to process transactions, they are primed to serve as customer information points, too. A customer might be embarrassed to ask a member of staff if there are any cheaper alternatives to a product they are looking at. But at a kiosk, they can do their own research. Just as they would at home on their smartphone or laptop.

Similarly, it has been demonstrated that kiosks can boost upselling through automated prompts, because they consistently offer the right suggestions based on purchasing patterns. But what about flipping this round to ‘downselling’, or telling customers they could get a better deal on the purchase they are about to make by flagging up special offers etc?

Some business owners might baulk at this and argue that the objective is to increase not decrease average order size. But there’s a balance to be struck here – businesses actively seen to be saving their customers money at the moment will go a long way to strengthening loyalty and encouraging repeat business.

This doesn’t just have to happen with kiosks, of course. POS terminals at staffed checkouts can just as easily be set up to prompt cashiers into flagging up deals to customers. POS is also the natural point of contact to administer loyalty programs from. Take up and active use of loyalty schemes is on the rise as people look for any benefits, they can get through the cost-of-living squeeze.

All in all, POS has a bigger role to play in any business’s relationship with its customers than simply ringing through sales these days. Modern technology ensures POS creates opportunities to inform and empower. In the current economic climate, it makes sense to harness these capabilities to help customers save money. The payoff is protecting sales volumes and earning loyalty.