How IoT Integrations Can Revolutionize POS

7 November 2024
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Over the past decade, we’ve seen point-of-sale break out of its mould and become about a lot more than just sales. With the ability to connect the likes of inventory management and CRM software, kiosks that serve just as well as customer information points as they do self-checkouts, and the added flexibility of mobile POS, people have started to use the phrase ‘point of service’ as a more accurate description of what modern POS systems do.

The innovation in what POS can do and what that means for both business operations and customer experiences is showing no signs of slowing down. One particularly exciting avenue of exploration is the alignment of POS with Internet of Things (IoT) technology.

IoT simply means a network of devices. But unlike the regular internet, these devices (or ‘things’) need not be computers or in anyway computerized. All they need to be capable of doing is generating data that can then be shared across the network. In practice, that means that IoT usually refers to a network of sensors.

If you can collect data about something, which is what sensors do, you can extend the principles of digitization further and further out into the non-digital, physical world. That’s what makes IoT so exciting. In the context of consumer-facing sectors where POS systems are used, that opens the door to learning more about your customers, boosting efficiency and creating innovative new experiences that help to take customer satisfaction and loyalty to new levels.

Here are some examples of what that can look like.
Real-Time Inventory Management
POS systems are already widely connected to inventory management systems so inventory data is updated with every sale. IoT integrations take that a step further. With on-shelf sensors, you can also track shrinkage from theft, improve security, and also identify when items are taken and then misplaced elsewhere.

IoT technology can also make replenishment faster, more accurate and more efficient. Data from sensors can create alerts every time stock levels reach a certain point so you know exactly when to replace items. Employees picking items from stock rooms can refer to on-shelf data in real time. And these principles can be applied to stock room shelves, too, so you know exactly when to reorder and in what quantities, as well as to warehouse operations.
Tracking Customer Behavior
One of the things brick-and-mortar operators always see as a disadvantage versus their digital counterparts is how difficult it is to track customer behavior. Online, every click, every page visit, every item to added to a basket can be tracked and used to build detailed pictures of consumer habits and preferences. These insights can then be used for everything from merchandizing and pricing decisions to targeting and personalization.

IoT technology makes this possible in physical spaces, too. With sensor arrays around a retail store, for example, you can create ‘heatmaps’ showing the locations that get the most traffic and which items get the most attention. This can then be used to make data-informed decisions about store layout, where to place which merchandise for maximum sales impact, how to reduce bottlenecks etc.

Combined with mobile apps and CRM systems, there is also the potential to make personalized recommendations or offer targeted promotions via push notifications based on what customers are looking at on shelf in real time.
Faster Payments
We’ve already seen Amazon push the envelope with IoT technology to create its famous ‘no’checkout’ Amazon Go concept stores. These are based around on-shelf sensor technology which logs what customers take off the shelf, and then charge to a payment app so they can ‘just walk out’.

Even if the no-checkout concept is a step too far for most businesses, IoT technology could be used to drastically speed up the checkout process by totalling up the items customers intend to buy before they reach the POS. With no need to then scan in the items, all they would have to do is pay and move on with the rest of their day.