8 POS Trends for 2021: Latest Predictions You Should Be Thinking About

A new version of this article, featuring the latest data and statistics, is available. Check out our report on POS Software Trends for 2022/2023.

The push for less human contact due to the raging pandemic has translated to the exponential growth of mobile point of sale transactions. Online retailers are cashing in heavily on escalating cashless transactions, expanding offerings to further boost their earnings. POS systems have gone from merely being a tool to record sales transactions to a robust platform in just a few years, one that can integrate your marketing, inventory, accounting, and data analytics. In the age of the pandemic, it has become an indispensable tool. Its evolution isn’t slowing down, hence the need to keep up with POS trends. What’s in store for POS tools in the months further ahead into 2021?

For that, you only need to browse below the key takeaways. In this article, you’ll learn how POS is critically relevant to customer experience like bread is to butter. Likewise, you’ll see how mobile is disrupting the game in payments and—where on earth is this disruption taking place the fastest? We have compiled more key insights on POS market trends, information that may prove useful to your presentation, report, or anyhow you use it.

The point of sale system is the very heart and soul of any business. In fact, according to a report from Grand View Research, the global point of sale terminals market is expected to reach $125.9 billion by 2027.

If your business is still using the traditional cash register with a card reader and no other payment option, then you’re already behind the times. Not accommodating your mobile paying customers is losing your customer base. 

One of the biggest POS industry trends right now is mobile payment transactions, which saw a 40.2% year-on-year growth. However, over 46% of retailers can’t accommodate these mobile paying customers because they don’t have the right system to help complete the transaction. 

Although retailers are incorporating these new methods of payment into their POS systems, 23% of them still can’t accept payment with the tool. Businesses that have not transitioned to this technology met the full force of the COVID-19 pandemic, many going down in bankruptcy. As the chart shows below, businesses that have invested early in mobile POS systems are better able to ward off getting in the red. This is especially true for businesses dealing with nondiscretionary goods/services. Those who are more in the market for discretionary products and services are hit hard by the pandemic, showing negative revenue rates.

So, the solution is clear: it is not enough to upgrade your system. Retail POS trends point to the fact that it’s also important to learn how to use it effectively. Doing so allows you to sell more products and bring in younger and more tech-savvy customers through your door. You’ll be making your life and theirs a lot easier by joining the mobile POS trends. And in grave situations like the ongoing pandemic, you are giving your business the best chance to survive, even thrive.

1. Mobility is now a priority

By 2025, mobile POS payments are predicted to reach $4,650,556 million and will have about 1,890.33 million users. These figures are already adjusted in line with changes due to COVID-19 (Statista, 2021). The change in predictions is understandable, as people are going to remain wary of close physical interaction with people they do not know for a while.

Additionally, though many customers still like to use their debit or credit cards in transactions, there are also shoppers who increasingly prefer wallet apps like Google Pay and Apple Pay. This trend is not likely to stop anytime soon, as it is propelled by the growing number of smartphones in the world. In advanced economies like Israel and South Korea, smartphone ownership is at the 90% threshold. Meanwhile, in developed and less developing countries, ownership is between 40% and 60% (Market Watch, 2021). There may be a huge difference, but those numbers still mean that there are numerous members of the population that have smartphones.

If the trend holds, half of the world’s population may be using digital wallets once 2024 rolls in. The need for mobility can only receive a boost. Plus, mobile POS meets the main requirement amidst the pandemic; it helps minimize human contact without inconveniencing customers.

The advantages of these systems are as follows:

1. Better functionality. When used at restaurants, these serve more than just a POS. They can also serve as a digital menu, where customers can input their orders. The orders will be sent directly to the kitchen, encouraging customers to order more.
2. A convenient way to pay. Rather than giving the card to a server and letting them run the transaction at the counter, customers can pay from the table.
3. It also serves as a static till. For retail shops that offer self-checkouts, you can use your mobile POS as a static till. So, customers can check out as they please.

2. Integrated customer loyalty program

When businesses show loyal customers that their loyalty is appreciated, they are more likely to come back for more transactions. This is beneficial to enterprises, as increasing customer retention by even 5% can drive profits up from 25% to 95%. Moreover, 75% of consumers prefer businesses that have rewards programs (SmallBizGenius, 2021) and 52% will join the program of a brand they patronize often (Yotpo, 2018).

Thus, it can only work in a store’s favor to create a loyalty program and to integrate it with their POS. While most businesses would provide cards for stamps and stickers, it is still a good idea to have a digitized rewards program. That is because some customers may forget to bring their rewards cards. By having a digitized rewards scheme, stores can connect customer’s transactions to their rewards IDs just by keying in their registration numbers or their names. This move can motivate customers to patronize a business more often.

Plus, it is possible to add a referral scheme to the rewards program. This means that businesses can attract additional customers through their existing patrons.

Moreover, this direction ties up well with cloud POS and provides additional benefits:

1. Continuous loyalty. When customers know that they can gain points from their transactions even without their cards, they would be encouraged to visit their favorite stores more often.
2. Customer retention. Maintaining good relationships with existing customers is crucial to a business. With a loyalty program, shops can entice patrons to transact with them more often.
3. Streamlined customer data. A digital rewards program allows businesses to learn more about their buyers. Because of this, they can easily see what products are most popular among consumers. Thus, they can make more strategic promotions to attract additional purchases.

3. New ways to improve customer experience

One way to improve customer experience is by making it easier to conduct transactions. That is why it’s also important to have a reliable billing and invoicing program together with your POS sale.

A study indicates that the US is next only to Canada and South Korea in using debit and credit cards for contact transactions. However, it lags behind in contactless card transactions, with just 0.32% of transactions carried out through contactless cards. In comparison, Australia, the United Kingdom, Canada, and South Korea lead by 27.64%, 23.27%, 22.85%, and 20.82%, respectively.

Here are some other ways how an improved POS affects the customer experience:

1. Faster checkout times. People always have somewhere they need to go. When they drop by your place of business and make a purchase, they want to spend as little time as possible there, especially during the checkout line. That’s why some companies adopted different POS systems. Even using mobile devices like tablets and mobile devices to make transactions faster.
2. Available payment options. Thanks to the rise of debit and credit card payment methods, there are fewer people using cash today. According to a survey, 46% of US consumers rarely use money anymore (CreditCards, 2019). So, if you’re still using an old-school cash register, you are already missing out on a lot of business. 
3. Inventory management. Managing inventory takes time and effort. But through a reliable POS system, you can easily keep track of everything in your store. It will also be a lot easier to answer customers asking about particular products in stock. 
4. Gather customer feedback. Suggestion boxes are a great way to get a pulse on how your customers like the service provided. Now, you can get the same feedback through your POS system, making everything digital.

4. More businesses are transitioning to cloud-based POS

61% of quick-service restaurants in the US have embraced cloud-based POS (Pymnts, 2018). In fact, 60% of new merchants are asking for cloud POS rather than legacy POS (Reforming Retail, 2018).

Cloud-based POS is currently one of the leading POS technology trends today. Forbes reported that 61% of merchants are looking into getting cloud-based POS for their business (Forbes, 2018). 

Additionally, it’s predicted that there will be a 50% increase in cloud-based POS adoption before the end of 2021 (Reforming Retail, 2018). So, now is a good time as any to embrace the change. Merchants are liking these advantages of having a cloud-based POS: 

1. Simplicity. Client-based POS requires time to set up and learn. Not to mention, it needs an IT team to help with its maintenance and when there are problems with the system. Cloud-based POS replaces all of that with a single app. Any update will come from the cloud to whatever device you are using. It makes the entire process a lot simpler, making it easier for merchants to handle.
2. Flexibility. If budget is a concern, you can make the transition to the cloud-based system slowly. Adopt the system in stages and only pay for the methods that are currently in use.
3. Functionality. Most cloud-based POS can integrate with the programs that your business is already using. If this is the case, then an open API POS is best suited to your needs.

5. Asia Pacific Countries lead the world in using mobile payments.

Asia Pacific countries have fully embraced the use of mobile payment methods. eMarketer found that more than 45.2% of China’s population uses mobile payment every day (eMarketer, 2018). 

The trend is slow to come to the US. Even with the world’s highest smartphone adoption rates with 77% of the population using one (Merchant Savvy, 2020), its mobile adoption rate is only at 29%, well behind China’s 81.1%.

The 2019 mobile POS transaction value is estimated to be around  $745, 796 million. However, debit and credit cards are still the most popular methods of payment in the US. That could soon change as there is a 16.2% year-on-year growth of mobile POS payment users (Statista, 2018).

Here are some reasons to consider taking mobile payment options for your business: 

1. Makes transactions easier. Accepting mobile payments for your business is easy. It mostly consists of scanning codes or tapping the smartphone on the terminal and authenticating the transaction. It will require little training for your staff and they can adapt to it fast.
2. Improves customer service. One thing nobody likes is waiting in long lines at the store. Accepting mobile payment methods allows lines to move faster and gives your customers a sense of satisfaction.
3. Transactions are safe. Mobile payments are safe to use. A lot of these systems are EMV compatible and use the latest secure credit card processing technology to protect you and your customers.

6. AI Integration

Because of the added benefits of having AI integration, 15% of businesses in the US are already using AI-enabled POS in their stores (Adobe, 2018).

What’s more, 30% are already planning to make the jump to AI-powered POS within the next twelve months (Adobe, 2018). If you’re worried about customers after the upgrade, don’t fret.

A study found that 40% of 18- to 24-year-old consumers would let artificial intelligence shop for them; granted that it understood their preferences. With that said, there should be no problem with customers adjusting to AI in stores considering its benefits:

1. In-store fraud detection and prevention. Prevents fraud and ensures customer information is secure through AI. They can detect and prevent fraud and ensures that the information entered is safe at any time. It sends alerts for any suspicious activities. The system can even keep track of employee behavior to make sure they are doing their job.
2. Better shopping experience. Online shopping has set the bar for the shopping experience. The convenience and intuitive suggestions it provides prove to be useful to shoppers. Through the use of an AI, you can attain the same experience in-store. The AI can personalize a customer’s behavior and offer relevant product displays based on their past purchases.
3. Keeps track of inventory. AI lets you know your customer’s buying habits. That way, you can order more of what’s being bought, increasing profits. It also helps to reduce inventory loss, as it detects checkout errors or when a cashier forgets to scan an item.

Best POS Software

1. Toast POS is a solution that can serve as your one-stop application for managing your restaurant. It lets you customize your menu and even create time-specific menus.
2. Vend is a highly customizable POS that can work with other business systems and hardware. With this, you can create a connected and streamlined process from the front-end to the backend.
3. Square is a mobile POS system that works with either Android or iOS. It comes with a Square magstripe reader, which truly lets you take your business anywhere.
4. TouchBistro is a well-known POS application for iPad. With this, you can organize your menu, track inventories and orders, and process payments.
5. Oracle Food and Beverage is a reliable POS platform designed for different kinds of food establishments. It provides a rich experience with its advanced management tools.

7. Better ways to collect data from your customers

Customers want to make their shopping experience as flawless as possible. That’s why according to a survey, 83% of shoppers are willing to provide their information in exchange for a personalized experience (Accenture, 2018).

This trend makes it easier to collect the necessary data from customers. POS systems have a feature similar to some of the best business intelligence tools in the market. It can help you process the data from your customers to create the best experience.

According to a study, 50% of retailers are still using spreadsheets to analyze their sales data (TotalRetail, n.d.). Change may soon be coming as 81% of businesses are looking to get a unified commerce approach to their business by the end of 2020 (Windstream Enterprise, 2018). 

Smaller businesses can take advantage of the situation by using a comprehensive POS system and utilizing all its features. Here are some other benefits of using this trend for your business: 

1. See buyer habits. Get insights on what your customers are purchasing more of. This gives you an idea of what they are going to buy next based on their most recent purchase from your store.
2. Improved marketing strategy. After gathering buyer habits, you can then create a comprehensive marketing strategy that can help promote your brand and products.
3. Actionable data. More advanced POS systems will not only gather data for you but present it as well. It can come up and present real-time data in an easy-to-understand format like a graph. That way, you can quickly see what needs to be done in terms of improvement and more.

8. Faster payment processing

Aside from a personalized shopping experience, customers want transactions to be faster. One way of making sure that transactions are faster is by upgrading older POS units and adding features.  In 2019, the leading POS purchasing plans for merchants are new POS solutions, with 51% looking into the change (Hospitality Tech, 2019).

Bigger businesses have more people coming in and making purchases, which is why 46% of store owners are looking to add new modules to keep up with the current demand (Hospitality Tech, 2019).

Lastly, with the rise of mobile payment options, retailers and restaurants alike are looking to accommodate the trend. This is why 39% of business owners want to get a POS for mobile devices.

With more payment options and registers open to paying customers, you can expect payment transactions to go faster over the next few months, resulting in happier customers overall. The benefits are aplenty:

1. Contactless payment. These payment options include smartphone payment options that support RFID like Apple Pay, Samsung Pay, and Google Pay. It’s a faster way for users to pay and get on with the rest of their day.
2. Mobile payments. Similar to contactless payment, mobile payments also offer a faster way to pay for items. But instead of waving the device over the POS terminal, customers will need cellular data to complete the transaction.
3. Improved POS systems. A good reason to go over the POS technology trends is to discover the best POS systems available today. You can get the perfect POS software for your business and allow upgrades necessary to improve business.

Use POS Beyond Transactions

Having a state-of-the-art POS system for your business means you can do more than collect payment. Together with a CRM platform, you can gather and analyze customer data more efficiently and more accurately.

Trends are trends for a reason. If you don’t take these on for yourself, your competition will—and most likely, leave you in the dust.

With a state-of-the-art POS system, you’ll be able to handle more transactions on a day-to-day basis as well as cater to younger consumers using the latest and most advanced payment methods like mobile payments. In fact, you can even improve your business process with some of the top accounting platforms of today.

Meanwhile, transitioning to a cloud-based POS will reduce your costs and offer better management of your data. 

Once you have all the data you need, use that to help you figure out what your customers want and how you can deliver it to them. 

If you’re a restaurant, you’ll need specific POS features. You can check the best POS software and find the one that suits your needs. 

References:

1. Acenture. (2018). Personalization Pulse Check. Accenture
2. Adobe. (2018). Study Finds Investments In Customer Experience Are Paying Off. Adobe
3. CreditCards. (2019). Payment Method Statistics. CreditCards eMarketer. (2018). The Mobile Payments Series: China. eMarketer
4. Forbes. (2018). What Is Cloud Point Of Sale, And How Is It Different From ‘Traditional’ POS? Forbes
5. Grand View Research. (2020). POS Terminal Market Size Worth $125.9 Billion By 2027 | CAGR: 7.5%. Grand View Research Hospitality Tech. (2019). POS of the Future Predictions & Insights. Hospitality Tech
6. Market Watch. (2021). Mobile POS Market – Growth, Trends, Case Study Analysis, COVID-19 Impact, and Forecasts (2021 – 2027). Market Watch
7. Merchant Savvy. (2020). Amazing Stats Demonstrating The Unstoppable Rise of Mobile Payments Globally. Merchant Savvy
8. POSIM. (2021). The Top POS System Trends for 2021. POSIM
9. Pymnts. (2018). NEW DATA: The 15 POS Features QSRs Need To Succeed.
10. Reforming Retail. (2018). Have We Reached Peak Legacy POS? Reforming Retail
11. SmallBizGenius. (2021). 40 Amazing Customer Loyalty Statistics in 2021. SmallBizGenius
12. Statista. (2020). Mobile POS Payments: Worldwide. Statista TotalRetail. (n.d.). Study: POS Holds the Key to Faster Sales Growth. TotalRetail
13. Windstream Enterprise. (2018). 2018 POS/CUSTOMER ENGAGEMENT SURVEY. Windstream Enterprises
14. Yotpo. (2018). The State of Customer Loyalty in 2018. Yotpo

By Allan Jay

Allan Jay is FinancesOnline’s resident B2B expert with over a decade of experience in the SaaS space. He has worked with vendors primarily as a consultant in the UX analysis and design stages, lending to his reviews a strong user-centric angle. A management professional by training, he adds the business perspective to software development. He likes validating a product against workflows and business goals, two metrics, he believes, by which software is ultimately measured.