POS modernization boosts retailer performance – here’s how
A new study reveals retailers that upgrade their POS technology can obtain a number of benefits across the enterprise.
A vast majority (85%) of surveyed retailers that have recently modernized their POS systems say their return on investment either met or exceeded strategic expectations. Retailer respondents to “Retail POS Modernization: Strategic and Financial Case for Transformation,” a conducted by Coresight Research for unified commerce solution provider Aptos, that have modernized their POS systems reported a 1.2-percentage-point average increase in in-store conversion rates.
In addition, respondents that modernized their POS reported a 4.3% increase in average transaction value and 68% of respondents running cloud-native POS reported a moderate-to-high positive impact across operational efficiency, inventory visibility, customer experience and sales performance.
The study also found that retailers that have already modernized consistently report stronger outcomes than expected by those still planning to invest. The largest gaps between realized benefits and objectives are in improvements in store productivity — 49% of modernizers achieved this outcome compared to 24% of planners expecting it; mobile checkout enablement — 44% vs. 20%; improvements in store conversion rates — 44% vs. 27%; and improved real-time inventory visibility — 50% vs. 36%.
Coresight Research modeled the impact of POS modernization for a hypothetical retailer with $1 billion in annual revenue and 750 stores, estimating $4.4 million in annual cost savings and $39.6 million in annual revenue uplift. The savings were based on reductions in costs associated with hardware, software, maintenance and IT support, with the revenue gains achieved through increased average transaction value, in-store conversions, network uptime and omnichannel orders.
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Many retailers lag in POS
Currently, 22% of respondents operate hybrid or fully on-premises POS environments, while 36% use cloud-hosted systems that Coresight Research says stop short of the flexibility, modularity and continuous-update capabilities that cloud-native platforms provide.
Core POS systems in use today have been implemented on average for 4.3 years, with 30% of respondents operating systems that are at least five years old.
“Modern POS platforms, typically characterized by cloud-native deployments, microservices-based architectures, mobile-first development and API-driven integration, help retailers adapt to the changing role of stores as well as shifts in consumer expectations,” the report states. “Retailers that view POS modernization as simply a checkout upgrade risk undervaluing its strategic and financial impact.”
The report is based on a survey of 150 global retail decision-makers involved in POS strategy, selection and modernization.
