EPOS stands for Electronic Point of Sale and we all know important it is for a small business to operate — but what actually is it? That’s precisely the question I’m going to answer in this article.
In days gone by, your typical retailer would have had a till, some maybe even had a till system incorporating a payment terminal. Nowadays larger retailers instead have an EPOS system which is an all-singing, all-dancing version of that till and much, much more.
Whereas traditional till systems only record sales information, EPOS systems can then generate detailed reports and interact with other business systems. In this article, we’ll look at the component parts of an EPOS system, the advantages EPOS systems offer businesses and how you should go about purchasing one.
What does an EPOS system look like?
An EPOS system is a collection of hardware and software that allows you to run your business more efficiently. On the hardware side, an EPOS system will typically contain some or all of the following.
Precisely which pieces of hardware your EPOS system includes will depend on your particular business needs. For example, a greengrocer will need scales but may not require a barcode scanner.
On the software side, EPOS systems can hold their data either on your local servers or in the cloud. EPOS software also integrates with many other systems, meaning that data is automatically shared across your business without the hassle of manual updates.
Typically EPOS systems include some of the following software or software integrations:
- Stock systems
- Customer marketing and loyalty systems
- Staff management systems
- Accounting systems
Advantages of EPOS
There are multiple benefits of an EPOS for business owners and, more importantly, for their customers. This goes way beyond the obvious ones like saving staff time and the accuracy of reconciled data. Here are some of the most significant advantages.
#1 Help stock control
Traditional POS systems don’t care what stock you’re selling. All it needs to know is the price. That means it’s down to the merchant to perform manual inventory management checks and keep track of what’s running low.
Thankfully, modern EPOS systems integrate with digital stock systems. When you sell an item, it’s automatically deducted from your stock count, reducing the delay and risk of human error.
This helps merchants keep a close eye on their stock levels and reduces the risk of running out of something completely.
#2 More accurate reports
This is linked to the improved connectivity of EPOS systems over POS systems. While some POS systems did have reporting functionality, they simply can’t compete with the ultra-connected EPOS alternatives. A lot of EPOS systems will have in-built reporting dashboards that provide merchants instant insights into daily sales totals, best-selling products, peak times of day, salesperson performance and so much more.
Many EPOS systems will even integrate with accounting applications, meaning all your sales data is automatically entered. That reduces time spent on manual data entry and massively increases the accuracy.
#3 Flexible pricing
Because everything is digital, it’s a lot easier to edit pricing data for one-off events or campaigns. Using an EPOS system, you can instantly change the price of an item for 24 hours and then instantly change it back when the deal has expired. Compare that to old POS systems where you’d be manually altering prices on product labels!
#4 Improve your customer experience
A good EPOS brings two main benefits to your customer experience. First, it looks professional, which presents a great image to your customers. It sounds superficial but having a dated, old-fashioned POS system can really put off potential customers.
Second, modern POS systems are faster than old ones. Instead of manually entering the price of each item, you can whizz everything through your scanner and let the EPOS calculate the total. Then the card terminal is usually connected so the transaction is queued up almost immediately.
Even if you only save 20 or 30 seconds per customer, it adds up quickly and results in fewer long lines of frustrated customers. And if you think that customers don’t care about long lines, consider this statistic. A jaw-dropping 90% of shoppers will avoid a shop if the queues look too long.
#5 Track customer data
Because EPOS systems record everything, you can get a much better insight into your customers. For example, you can track what customers buy then use that information to customise tempting promotions or offers.
#6 Support marketing
This is another benefit from improved integration across services. Most EPOS systems will integrate with third-party marketing platforms, helping you make better, more informed business decisions.
Choosing the best EPOS system
There are a plethora of EPOS systems available on the market and given their wide variety of features and peripherals, how do you go about choosing the right one for you? Here are some key considerations
#1 Renting or Buying
This isn’t a straightforward calculation. First, you have to decide whether you should rent or buy your EPOS and both have a number of advantages and disadvantages. Renting, for example, doesn’t involve a large upfront investment, support is usually first-class and you can usually swap out your system when your business grows.
Buying, on the other hand, means you’re running costs are virtually nothing after you buy the system. You can also adapt or use the EPOS system however you choose and the whole system counts as a working asset.
Ultimately, there’s no one right decision. You need to look at your business circumstances and make an informed choice.
As I mentioned before, EPOS systems can include a number of different peripherals like barcode scanners, scales, receipt printers and scales. Before you go to buy your EPOS, sit down and think about what you really need in your business. That way you’ll avoid throwing all your options in the cart and ending up with a super expensive EPOS you barely use.
#3 Software and Integrations
As I’ve discussed in the benefits section above, a lot of an EPOS’s value comes from its own software and its third-party integrations. If you’re looking for an EPOS system, it’s important that you actually get a demo of the software to see how it feels to use in the real world. The in-built software is only half the question though. You’ve also got to think about how each EPOS system you’re looking at integrates with key third-party systems like marketing platforms and stock management tools.
With EPOS systems, the hardware is almost always easy to customise. Just pick up a new component, plug it in and off you go. The software, on the other hand, can be more problematic. If you will need to customise your EPOS — for example, adjusting the menu system or restricting access to certain members of staff — check whether you can do it before you buy. While bespoke customisation is usually possible, it’s likely to cost you a lot of money.
Traditionally, merchants have had one fixed checkout and customers came to them. Nowadays, however, merchants are experimenting more with mobile checkouts. For example, a lot of high street fashion retailers have EPOS software installed on tablets or phones which their sales staff wear on lanyards. This is one of the things you need to decide right at the start as most EPOS systems aren’t portable.
#6 PCI Compliance
It’s almost a given these days that all EPOS are fully PCI compliant but I still recommend you check that is the case before buying a system. You should also check what ongoing responsibilities you will have to keep your EPOS system compliant and secure.
#7 Support and Maintenance
Businesses simply must ask about the support and maintenance policies behind each EPOS system. Why? Because when an EPOS system goes down, you lose your ability to accept payments.
Some important things to consider include your EPOS provider’s support hours, level of support, support channels, whether it’s third-party or in-house support and what’s actually included in their support agreement.
Common mistakes when buying an EPOS
Few people have much experience in buying an EPOS system. After all, merchants tend to buy a system and stick with it until it literally stops working. With that in mind, here are some common mistakes I see merchants making when they are buying an EPOS for their business.
#1 Buy hardware first
Some merchants think that they can buy a bunch of hardware, piece it together then install any old software they can find. As you might have guessed, this tends not to work. In reality, a lot of software only works with specific pieces of hardware.
#2 Buy the cheapest hardware and software
Have you heard the old adage Buy cheap and buy twice? Well, it’s just as true with EPOS as with anything else. Cheap EPOS systems might be good enough to get you going but they are rarely powerful, flexible or reliable enough to cope with a rapidly growing business.
Buying the right technology might cost you more upfront but you should make it back your investment over the course of its life.
How much does an EPOS system cost?
At this point, you’re probably wondering how much all this will cost you. While it’s a little like asking, “How long is a piece of string?” I’ll try and provide some answers below.
- £1,000: And entry-level system usually based around a tablet like an iPad. The iPad is usually paired with other core components like a cash drawer, receipt printer and card machine.
- £2,000: At this price, you can pick up an industry-specific (e.g. hospitality, retail, etc.) EPOS system with software that’s designed for your industry.
- £3,000: Advanced EPOS systems will cost over £3,000 and are usually customised to your precise business environment.