Home > Software Categories > Retail POS

What is point of sale (POS) software?

The term “point-of-sale” has traditionally meant the cash register — the place in a store where customers purchase goods. But new business models and emerging technologies are redefining the nature of retail, and by extension, retail POS software. The global market for retail automation is projected to reach $275 billion in the next five years, reflecting a compound annual growth rate of 16.7 percent. As retail management software and POS tools continue to evolve, buyers will likely fall into two main categories:

  • New or growing businesses that don’t have a centralized tool for processing transactions, managing inventory, etc.
  • Established businesses that already use point of sale software, but aren’t happy with their current product due to inefficiencies, limited access, or performance issues.

This guide will help you understand current features and trends in POS tools, how they can benefit your business, and how to choose the best one.

Find your new POS software

POS software comparison

The products listed below all include some form of ecommerce, customer loyalty, and inventory feature options.

CRM Retail Appointments and reservations
no no no
yes yes no
no yes no
yes yes no
yes no yes
no no yes
yes yes yes

What are some POS features?

POS software is used to process customer transactions, accept payments, and update inventory levels for a retail establishment. Depending on the vendor, businesses can choose between on-premise, cloud-based, or hybrid deployment models. Cloud solutions are generally less expensive on the front end, support greater mobility, and require less IT maintenance. However, some business may choose on-premise or hybrid solutions to ensure offline access in the event of an internet outage, or to secure deeper integrations with POS hardware (barcode scanners, card readers, cash drawers, etc.).

When it comes to features, the software market is highly diverse, with products ranging from best-of-breed payment processing apps to comprehensive product suites known as retail management systems (RMS). Although best-of-breed apps tend to excel at specific functions, a growing number of businesses are moving towards integrated solutions that offer end-to-end functionality. The obvious benefit of an integrated system is that it links POS transactions to other back-end processes like inventory, accounting, and customer relationship management (CRM). According to a recent study by Boston Retail Partners, in the next four years there will be a six-fold increase in the number of retailers using unified commerce platforms.

Most retail POS solutions address the following areas of functionality:

Transaction and payment processing

Clerks and sales associates can enter items, calculate total purchase cost, process multiple payment sources (card, check, cash, etc.), and print customer receipts. They can also use the system to issue refunds for returned merchandise or void transactions performed in error.

Customer relationship management (CRM)

While most POS systems don’t include full-featured CRM software, they usually have some ability to store basic customer data, such as name, contact information, and purchase history. This data can be used to personalize the shopping experience, build marketing campaigns, and access specific transaction details without a paper receipt.


Better inventory management is one of the biggest opportunities for retail establishments to improve their bottom line. American retailers have lost an estimated $224 billion by keeping too much inventory in stock, and $45 billion by not having enough. While standalone inventory management software exists, most POS software can update inventory levels in real-time, at the moment the transaction occurs, so you’ll always have an accurate count. Many retail management solutions also incorporate ordering and demand planning tools to keep the shelves stocked through automatic replenishment.

Reporting and accounting

Managers can use POS systems to regularly generate reports and track financial performance for single stores or across multiple locations. These reports satisfy record-keeping and tax requirements and provide insight for future business planning, hiring decisions, and clerical problem solving. Many POS systems also integrate with full-featured accounting software suites.

Hardware integration

Although many retailers are now using consumer devices to process transactions, it’s still important that solutions support proprietary hardware used to scan items, print receipts, and accept payments. For retail establishments with smaller inventories or mobile sales operations, this can be as basic as a card reader + receipt printer + tablet setup. Larger stores may require more specialized hardware, such as barcode scanners, scales, tag deactivators, and inventory PDAs.

In addition to these larger functional areas, a retail POS solution may offer some or all of the following features:

Looking for demos of Retail POS software? Check out our Retail POS Software YouTube Playlist!

What are the common uses of POS software?

Point-of-sale software can be used anywhere goods or services are sold, whether it be a brick-and-mortar store, a mobile retailer, an e-commerce business, or some combination of the three. Retail stores, restaurants, personal service companies, gas stations, and admission-based attractions all use POS software.

Some businesses may only use software to handle basic transaction processing and store sales records, while others take a more comprehensive approach, using POS data to inform financial planning, marketing campaigns, and inventory management.

What are the common uses and major vendors of restaurant and bar POS systems?

Restaurant POS systems do more than work as a digital cash register. These tools often include reservations and seating charts that hosts can access through tablets or desktop stations. Restaurant management software built into the POS software can track food and beverage inventory alongside sales and revenue to increase order efficiency and better understand food cost margins. Bar point-of-sale systems can lower wastage margins and improve bartender accuracy through data tracking.

In addition to back-of-house data, these tools often bring value to customers with handheld payment stations that mean customers never let their cards out of sight. Many restaurants also use these tools to maintain email marketing and customer loyalty programs.

Top vendors of restaurant and bar point-of-sale software include:

Common uses and major vendors of ecommerce POS software

Retailers looking to move their business online and companies that start out as online retailers will need an ecommerce solution to manage inventory, create products, display products to website visitors, and process payments.

Ecommerce point-of-sale can come as a standalone software that the retailer can license to add into their existing website, a total website builder, or a specialized set of tools within a larger POS or CRM system. Companies with an existing website may consider adding a store to their site to offer products and payment options. WooCommerce is an ecommerce software built specifically for WordPress sites.

Other retailers may want to build their site from scratch using a website builder that is specifically designed for ecommerce, like Shopify or BigCommerce. These tools prioritize making well-designed product pages and fast payment gateways.

Large corporations with existing customer bases and inventory tools may want to search for an ecommerce POS that works with their existing systems. Salesforce CRM offers an ecommerce tool that integrates with existing CRM information, and NetSuite ERP has inventory and ecommerce tools.

Common uses and major vendors of POS software for personal service companies

Personal service companies provide niche services to individuals, including yoga studios, massage therapists, wedding planners, and dog walkers. These businesses don’t necessarily require a full-blown accounting software and can use their POS system to make payments and track invoices. Some personal service POS systems make appointments and provide scheduling features, while others are simple payment gateways. These tools can give personal service businesses a direct correlation between their work schedule and their revenue.

Major vendors of personal service POS software

TechnologyAdvice is able to offer our services for free because some vendors may pay us for web traffic or other sales opportunities. Our mission is to help technology buyers make better purchasing decisions, so we provide you with information for all vendors — even those that don't pay us.
In this article...