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Do we need pos in new retail?

Why is POS the Standard?

The POS replaced pens and paper, helping store managers to keep track of sales and update inventory. It is a small IT system that makes it easy for a shop to operate independently, and to synchronize data back into the corporate's global retail system. It is also crucial that a POS can work offline when connectivity (to the internet) is poor.


A POS enables the deployment of discounts and promotions digitally, so that shops do not have to keep track of every single promotion scheme, but to leave the hard work to the POS system instead. It also comes with a customer database, to help shops recognize and reward loyal customers.

Who is doing it without a POS?

Native New Retailers do not have a traditional POS system. Luckin Coffee for example, does not have one. Their customers would place their orders from the App on their phones directly, which removes the workload of taking orders from the staff, who can dedicate themselves to serving the customers better. It also creates a consistent experience for the customer with online ordering with options for delivery or offline pickups.

The inventory system, in this case, is entirely invisible to the customers, creating a much smoother customer journey. Customers simply couldn't care less about what your difficulty is as a brand, waiting for your POS to process all the information offline while they are ready to pay and leave is just not very attractive to them.

Why is it better without POS?

New Retail brands do not dedicate their stores to pure sales, but to experience. The POS should have nothing to do with experience, but everything to do with transactions. Futher more, the local inventory is not the only inventory available anymore, and a global inventory tracking system will not fit well into a POS system.

The POS is not usually an abundant resource. Hence waiting lines in offline stores are inevitable sometimes. Without having to rely on a POS allows a large number of customers placing orders at the exact same moment on their phones. Plus, a POS machine itself is usually a clunky piece of machine that creates a visual and physical barrier between the staff and the customer, which again, is creating unsatisfactory customer experience.

How to get rid of it?

Removing the POS without a better alternative is probably not a good idea. Brands can introduce new forms of check-outs, and gradually measure the adoption of the new model. Once they see some positive results, they can then further rollout such options in the new stores they open and collect more feedback from their customers. The POS can then slowly retire once the other options are fully operational and well-received by their customers.

Native New Retail brands start without a POS. They push their business model hard to capture every transaction from the App, and offer a better customer experience through their loyalty program with the customer data of preference and purchase history they collect from the App.

The possibilities of managing transactions via the customers' smartphones are endless. Providing your customers a single, consistent channel of purchasing will not only allow you to provide better services for your customers, but also make the customers feel a stronger sense of ownership of their personal data, even when it is shared with your brand. 

If you are a New Retailer, or a New-comer into the Chinese Market today, the incentive for you to deploy a POS system is non-existent.

Author: Jackie Fong

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