If you want to improve your business with no-charge, you should take care of POS Data analysis.

POS Data

Some retailers grumble that “Point of Sale (POS) System is just like a cash register in modern life, without any little innovation in our business”.

Oh no, what a big misconception.

The ones who grumble about POS System like that, perhaps, have never discovered and leveraged all amazing feature in Point of Sale, or maybe they ignore the most basic yet powerful feature of POS – which is POS DATA.

During each transaction, your POS is recording multiple bits of information that you could use to improve your business. POS data is a potentially powerful and free tool for merchants looking to optimize their business — and it’s just sitting on your checkout counter, waiting for you to dig in. 

On the other hand, you may ask, which data should you be looking for? While every business will find some data points more relevant than others, there are a few common views of info that most merchants will find useful.

Move on and see how to explore the power of POS Data!

Table of Content


  1. What is POS Data?
  2. Basic POS Data Analysis
    Top Seller Products
    Sales Trend
    Returns, Refunds, and Exchanges
    Customer Insights
    Staff Performance
    What to Buy
  3. Advanced POS Data Analysis

What is POS Data?

POS Data definition

what is POS data

The POS Data, basically, can be shown as “a load of information that is automatically gathered during customer checkout”.

A basic flow diagram of POS data

The information includes business insight data – such as Inventory Status and Business Management, and customer insight data – such as who is buying, why they are buying, what they prefer to buy, when they buy, where they buy (online, offline or in which stores) and a lot of more useful data relating to customers.  

But what you will do with a whole lot of these data?

Why analyze POS Data?

Every day, point-of-sale (POS) terminals collect enormous volumes of data. However, it is just RAW data, which means, it has very minimal use at best.

The data needs to be integrated into one place to bring the retailers stellar scope of their business, which leads to maximum utility.

After analyzing, POS data can show you the way to track and forecast your stock counts, optimize your marketing campaigns, give you deep insights into your ideal customer and much more.

To be more specific about why and how, and how to analyze effectively POS Data.

Let’s catch a closer look below!

But first: Check out this ultimate guide to know how to utilize POS report for your business.

Basic POS Data Analysis

1. Inventory

You can sell a lot of products but still not gain any profit yet? The main reason is that you lack Inventory Analysis – being inactive with stocks left and stocks ran out.

That being said, the innovative POS technology gives you an “easy-to-track” number on the POS screen with each category/product. You, and your staffs, can easily track the inventory status right on a screen.

Moreover, the POS inventory report shows the trending of each product, and help you calculate the forecasting product number.

And, how you can leverage this amazing feature on POS?   

How this POS data help you improve your business:


A terrible word ?!

Out of stock

To avoid the mistake in ordering out-of-stock products, the POS system will automatically update stocks in real-time and hide unavailable items for online customers. The system also instantly notifies your sales staff if the number of items added to cart is higher than the available quantity in the selected warehouse.

Besides, some modern POS systems provide forecasting feature for the business. If the numbers of items in the warehouse is lower than a particular mark, then the system will automatically notify you and your staff. So that, you can easily import items in time to meet customers’ demand.


How wasteful is that with unsold items! You paid for these products, but they’re not giving you anything in return by sitting in a back room or on your store shelves. These dead stocks are slowly but surely draining valuable finance which can be put towards growth.


That is why you need to analyze the Point of Sale data.

The system will show you the exact number of items on the screen, and give you a Product Trending Report. Via these numbers, you can identify these items and avoid making mistakes of ordering these items too much. Or else, you can decide to stop importing these items to your stores.

In a nutshell, having this information helps you identify inventory problems so that you can make the appropriate decisions and optimize what you have on-hand.

Stocks in multi warehouses/locations

You have a lot of jackets in your store A, while, you are running out of jackets in store B. So, what will you do now? Call “emergency” to the warehouses, suppliers, or move jackets from store A to store B? No matter which solutions you choose, it is easy to see that without POS system, those solutions seem “so ineffective”.


The POS system will help you collect the data on the availability of different products, locations or the movements between locations. All the data is visible for both you and your staffs (based on your setting, your staff can or can’t have the permission to see this data). So, it’s very simple to control stocks if you have the multi-warehouse or multi-location.

In another case, if your customer wants an item which has different size/color from the one on the store shelves, in an eye blink, the POS will access your inventory counts to see if it is available.


Omnichannel POS

Bridge the Online and Offline Gap and enhances the omnichannel retail experience


2. Top Seller Products

You have a “hot” item in your store. Unluckily, you don’t know it on time so the number of products you imported was not enough for your customers’ huge demand. Do you want to continue staying in that case? Seriously, NO.

Knowing what products are selling is just as important as knowing the products that are not selling.

Let me show you a tip below!

How this POS data help you improve your business:

Mostly, a regular POS system can give you a sale analytics report, which lists the products that have sold over a specific date range.

Let’s think about the use of POS data on a continuum:  Start with top-line sales and inventory reporting. Then move down the product hierarchy and the store hierarchy to more detailed reporting. The most useful and actionable insights are usually found when you dig into greater levels of detail.

For example, if you identify top-selling stores and then correlate that to demographic information for those stores, then you can begin to understand the consumers visiting those stores.

top seller products

Similarly, if you dig deeper into the “Top Seller Products” data, you can see what attributes you have in common, which helps you improve “Product Recommendation” button or in case, you are still running out the “hot” product.

In brief, the simple way to improve the aggregate sales is to find areas of efficiency and invest in them. To find areas, don’t ignore “Top Seller Products” data! You can see what products are flying off your shelves. Then, you may buy more or showcase it in a certain section of your store or offer a special promotion to maximize its visibility.

3. Sales Trend

You can hardly improve your business if you don’t know your sales trend.

Tracking and Storing all the purchase transactions is a basic function of POS system. you can easily export a POS report of your sales trends by product type, region, or time period. It is also one of the most important reports for the retailer to know the valuable insights into the inner-workings of your business.

sales trend

How this POS data help you improve your business:

The POS systems usually allow for flexible, customizable views of time periods, which include latest 52-, 26-, 12- and 4-week, fiscal year and calendar-year-to-date time periods, along with the comparison with the last year.

When looking for trends or patterns in your sales data, you can determine both opportunities and unexpected problems. You can track if one particular product is increasing or decreasing in sales. If it’s declining, you can make timely decisions such as to cut prices, market more, or stop selling the product. If an item is selling off the shelves, you can be sure to stock inventory accurately across channels.

Make sure that you are looking at both shorter- and longer-term trends when looking at your business. Shorter-term trends can proactively help you to fix issues before they extend into longer-term trends.

Sales trend analysis also helps you determine if you’re meeting your sales goals by providing an easy measurable way to track your process. You’ll actually know if you increased sales from last year and by what percentage. If didn’t meet a goal, you can drill down to sales of a specifics product or location to see what is stopping you.

All retailers should have the ability to become data-driven businesses. With the right capabilities, you can have confidence in the decisions you make because they are backed by your own data.

4. Returns, Exchanges, Refunds

Returns make you worried!

Refunds make you sad!

Exchanges make you dizzy!

They are nightmares?

Why don’t you change all these “nightmares” into the lucky sign to your stores?

Using your POS data can help you gain some serious insights into the reasons behind refunds, exchanges or even returns

How this POS data help you improve your business:

The POS system will “take note” for you which products are exchanged and returned, how many times, and how many items. It will show you via regular reports on these activities.

What you need to do is taking a look at the specific products that are regularly returned or exchanged, and make note of the reasons. Is a product defective? Or is there an item not meet-customer-need?

Better still, don’t ignore the type of refund customers prefer. Most POS systems allow merchants to refund past orders to the original payment method or make exchanges for store credit. You may recommend them to use Store Credit, which makes them think about buying other products in your store.

This kind of POS data can help you make small changes, like eliminating certain products from your shelves, that could make a big impact your revenues.

5. Customer Insights

Whenever a purchase is made online or in-store, POS systems can collect the valuable information of this customer, such as names, addresses, email, phone numbers and past purchases. This data is very important to help you understand their insights and make them more loyal.

How this POS data help you improve your business:

How can you make decisions on marketing?

Answer: Via POS data about Customer Profiles and their Order History.

customer insights

The cost to have a new customer is often more than to keep the ones you have. Thus, if you want to grow your business, use these databases in your marketing plan to let your existing customers know that you appreciate their time and loyalty. For example, send them a discount or tell them about the upcoming sale or special offer via their email, phones, or writing a letter to their house.

With their past purchases and order history, you can build the ideal customer profile and understand the customer’s buying habits. This data is very important to plan the successful marketing campaigns by offering the personalized messages via the direct emails or in the recommended products part on the website to upsell and cross-sell.

6. Staff Performance

staff performanceIn a small or mid-size business, managing the staffs is the toughest jobs for you. However, not all POS Systems notice this case. So, the best POS systems will have an employee ranking report to help you track the sales of each staff.

With Magestore POS system, the store manager can not only track the sales by staff daily/weekly but also know what products they’re successful at selling.

How this POS data help you improve your business:

With the employee ranking report, you can easily know who is performing well and who isn’t, who need an additional training to upgrade their skills and who will receive a reward for their productivity.

This data is useful to help you manage your staffs, understand their skills and encourage them to improve their performance (and improve your business, too).

7. What to buy

Determining which items to buy and how many is something that is difficult for every business. And no point of sale system will do all the work for you. But it can make educated suggestions based on information that is already in the system.

By looking at sales history, along with current stock quantities versus optimum stock quantities, the best point of sale software will produce you the best plans for your business. Even better, it will help you handle the problems effectively in real time.

Advanced POS Data Analysis

Advanced POS data analytic

In addition to basic POS Data analysis, you should also notice about advanced analysis, which is more detailed, deeper and fits your business

Because each business has its own features, goals, strength, and weakness, it is hard to describe clearly how you can take a clear vision about data analysis.

However, we have a small report about how the top ways a business look to analyze data in an advanced way and extract more value from POS Data:

  • Better tracking of new product launches
  • Improving promotional effectiveness
  • Improving forecasting to reduce safety stock levels
  • Optimizing merchandise assortment
  • Strengthening relationships with retail buyers
  • Improving on-shelf availability


Scanning POS data is a free and easy way to have many powerful ideas to improve your business, including in-depth insights, profit, stock levels, promotion, loyalty program,…

It may have time to learn to analyze POS data. But when you’ve mastered it, the analysis and insights you gain will make it all worthwhile.

If you want to know more about POS reports, check out our latest guide called POS Report for Retail Managers. With it you can control and improve business performance with reports and analytics.


Kate N. is now working as a Retail Solution Specialist at Magestore. She has 3+ years of experience in brand management, marketing, and customer's insights. Kate loves to travel to experience new cultures and discover what is happening with retail all around the world.

1 Comment

  1. Charles Kendricks Reply

    If you know the POS data analysis it will help you increase your business revenues and decrease costs. and also you need security for your POS.

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