The Future of POS: How AI & Machine Learning Will Transform Retail & Hospitality

Both retail and hospitality sectors are highly competitive. Every business, small or large, constantly looks out for ways to improve efficiency, boost sales, and access insights that can help them make decisions and get ahead of their rivals. AI, with its lightning speed and tireless productivity, presents a brilliant opportunity to reduce payroll costs, save time on admin, and enhance customer experience.

On the other hand, the point of sale (POS) industry is already the backbone of businesses worldwide. Though POS systems are constantly evolving, the core of the technology provides reliable tools such as payment processing, inventory management, and business reporting. Automation is already a big part of what POS does, but the introduction of AI presents new opportunities to improve processes that the industry is keen to grasp.

So, how are the retail and hospitality landscapes going to settle as AI technologies integrate with the tools these businesses use every day? What tools can you adopt that can help the way your business trades? That’s what we’re looking at in this blog. Below, you can read about:

• Defining the key terms

• How businesses are already using AI

• How AI and POS can work together to help businesses

• Potential shortcomings of AI in point of sale systems

Read on to find out how integrating AI and POS will help your business get ahead!

What does AI and point of sale mean?

Before we look to the future of integrated AI and point of sale, let’s take a moment to clarify what these terms mean.

Artificial intelligence (AI)

AI technologies are sophisticated computer programs or machines designed to “think” or “learn”. This machine learning uses algorithms to read data, measure outcomes, and make predictions. For a long time, AI was only seen in science fiction, but AIs like ChatGPT and OpenAI are starting to turn this amazing concept into a reality.

AI doesn’t think like a human yet, but has incredible abilities to analyse large amounts of data, interact with humans, and complete tasks in milliseconds that would take a human hours. It’s no wonder the business world is so eager to utilize AI!

Point of sale (POS)

Point of sale systems encompass the hardware and software businesses rely on to make sales. They do this using integrated card readers, cash drawers, and sales programs that scan barcodes, display menus, and tally up the baskets that customers accumulate.

However, point of sale systems also include more complex programs, from web builders, inventory, accounting, and payroll software, and other technologies that all come together to make one tool a business can use to run everything from one place.

Integration

Finally, integration is a crucial part of the point of sale system. Integration technology creates bridges between applications that allow the tools to work together. For retail and hospitality, this means linking a point of sale system to card machines and payment processing, ecommerce tools, accounting software, customer relationship management (CRM), and more.

Integrated technology, when it works well, creates across businesses and makes a complex operation feel easy to run. This makes the prospect of AI, with its incredible capabilities, integrating with the many facets of point of sale technology very enticing to everyone in the retail and hospitality industries.

How businesses are already using AI technology

While AI continues to develop and businesses are far from realizing its full potential, it has already had a big impact on trading and operations, and the statistics back that up.

Forbes reports that as many as 4 in 5 workers across multiple nations and industries are already using AI in the workplace. In retail and hospitality, this number is lower. Deloitte found 57% of retail and hospitality executives have implemented AI in some capacity, and for every retail and hospitality already using AI, there is another planning to adopt it in the near future.

In marketing, AI already has an enormous influence, with 92% of retail marketers using AI either to help with writing and data analysis, or as an automation tool. Over half of businesses using AI in marketing do so to boost customer engagement with targeted advertising and personalization strategies; a key tool that turns casual shoppers into sales.

Meanwhile, Mckinsey surveyed 25 different uses of AI, and found that AI is most used and most effective at redesigning workflows to improve efficiency. While there are many tasks that require a human touch, those tasks AI takes over are completed in better time, leaving staff free to focus on other tasks.

AI and point of sale: a match made in heaven

With surveys finding as many as 25 different key uses for AI in business, the POS industry is looking to integrate as many as possible into point of sale systems. This means your POS system could come to look very different in the coming years than the one sitting at your checkout today.

Let’s take a look at some of those uses:

Optimized pricing

With AI's ability to analyse everything from recent sales trends to customer data and business history, alongside its predictive capabilities, AI-informed pricing offers businesses the chance to make small adjustments that hit just the right note with customers.

POS systems are incorporating this handy tool to help users delegate pricing choices to AI. The AI then fixes price points based on all the business data the POS gathers, which managers can’t read without a lot effort! Not only does this save time, but it also guarantees your business makes the most informed decisions available.

Inventory analytics

In addition to helping set price points, AI’s ability to read POS data can be used to prevent dreaded stockouts. POS reports already store your sales history, but finding time to look at what sold more or less in previous years can be difficult. AI can delve into previous years and compare more recent sales trends to make more accurate sales forecasts and let you know what you need to stock up on!

Smarter, more human chatbots

Given how flexible most POS systems are, leading providers implement chatbots to help guide users to the right places and answer any questions they may have. But as AI-intelligence improves the quality of those interactions, and as self-service kiosks become more commonplace, hospitality and retail businesses are looking to implement their own chatbots.

With chatbots entering more businesses every day, AI has the potential to improve those interactions. This is true for marketing, ecommerce, as well as in-store chatbots: the better and more human the chatbot becomes, the more positive those customer experiences will be, leading to better CRM, improved customer loyalty, and more sales.

Where AI could fall short

Despite the long list of benefits that AI brings to your POS system, there are also good reasons many business owners are hesitant to implement it into their operations. These include:

• Data quality: While AI is amazing at reading and presenting data, it cannot help your business if the data is inaccurate or incomplete. Sales not entered into the POS or entered incorrectly will give the AI the wrong impression, which means the conclusions it comes to could lead to poor decisions for your business.

• Implementation and maintenance costs: AI technology is still new, and is therefore expensive, and requires regular updates and tweaking to keep it functioning well. This is particularly true if a business is smaller or running on older POS systems that will need updating to a system sophisticated enough to integrate with AI.

An example of AI and POS in action: Epos Now

If you haven’t seen what AI and POS can do together before, take a look at Epos Now’s point of sale system. Epos Now has integrated AI, helping businesses all over the world run efficiently and make better day-to-day decisions.

Epos Now has been pushing the boundaries of POS since 2011, and has integrated with leading business software providers, as well as developing in-house payment processing, ecommerce, ordering software and much more. This means, when it comes to building efficiency into your business, an Epos Now system is a good place to start. These point of sale systems can help with:

Comprehensive business management
With an Epos Now system, you do more than run your checkout. You can do everything from payroll and inventory to loyalty programs, accounting, and multi-channel trade.

Built-in efficiency
Thanks to tools like AI and other automated processes, many daily tasks are taken off you and your team's hands and are handled by your POS. This includes automatic inventory management and low-stock checks, finance tracking, data transfer, and payroll calculation.

Smarter business insights
Epos Now POS keeps track of everything going on in your business, from products that aren't selling to the days and hours where you're under or over-performing, as well as storing details of every sale you make. It then turns those into easy-to-digest business reports that help you take care of your business's needs.

Adaptability and growth
Opening a second site? Want to start delivery? How about staff or stock changes? No matter how your business changes, Epos Now POS systems not only change with you, they make it easier to make any changes you want to make! Add an extra system, download from the AppStore, and make easy amendments to your staff and stock list.

Conclusions: an exciting future for AI and POS partnerships

AI has the business world buzzing. Conceptually, it’s one of the most exciting technological developments since the internet revolution. But when we look closely at the business world, and especially its integration with the POS systems retail and hospitality businesses rely on, we can see the ways that AI and machine learning can reshape the way people trade.

From predictive inventory management to dynamic pricing, from instant chatbot interactions customers love to fully-informed business insights, AI tools stand to make businesses faster and smarter across the board.

But despite the high rewards, there are still risks involved and industries are still adapting. This makes it important to keep a lookout for further developments in both AI and POS which can make the integration smoother and make you confident that when you implement AI in your business, it drives growth and enhances the work your staff are already doing with a little artificial aid.