
Point-of-sale (POS) systems have become essential tools for retailers and business owners. Even more essential though are the POS analytics available to help you take advantage of data you never would have even considered 20 years ago.
However, in today’s competitive business landscape, having a basic POS system may no longer be sufficient. To stay ahead of the game, businesses need to leverage the power of data analytics to gain deeper insights into their customers’ behavior, optimize their operations, and drive growth.
What that means is you need to do your POS system research to discover the best POS system for you and your business. Because if you can use reporting and analytics to not only make more money, but make your life easier, it’s a no-brainer.
In this article, we will explore the role of data analytics in POS systems and how it can transform your business. We’ll cover the benefits of using data analytics in your POS system, the different types of data you can collect, and the tools and techniques you can use to analyze this data.
In this way, you can greatly increase your profits by boosting your sales, cutting expenses and lowering your labor costs.
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Benefits of Using Data Analytics in Your POS System
Improve Sales Performance
One of the primary benefits of using data analytics in your POS system is that it can improve your sales performance. By analyzing your sales data, you can identify your best-selling products, optimal pricing strategies, and top-performing sales channels. This information can help you make data-driven decisions about your inventory, marketing, and pricing to increase your profits overnight.
Increase Customer Satisfaction
Another benefit of using data analytics in your POS system is that it can increase customer satisfaction. By analyzing customer data, you can understand their preferences, purchasing patterns, and pain points. This can help you tailor your products and services to meet their needs, improve their experience, and build loyalty.
Identify Trends and Opportunities
Data analytics can help you identify trends and opportunities in your industry, such as new products, emerging markets, and evolving customer needs. By analyzing market data and consumer behavior, you can stay ahead of the curve and adapt to changing market conditions. This can help you identify new revenue streams and grow your business.
For instance, Lightspeed POS has the capabilities to show you the slowest and busiest times during the week, as well as during the day. Check out the snapshot of their heat map.

The darker the area, the busier the restaurant, based on sales. The lighter the shaded area, the slower the restaurant is.
As you can see, if you hover over a time of day, a snapshot overview will pop-up showing you Average Sales overall, Average Transactions, Average Sale per table and the percentage of Repeat Visits. Why is this valuable?
First, you can schedule your best, rockstar employees on the busiest times, and your weakest ones on the slower times. In addition, you can spot your slow times and create a plan to get more people in during those times.
For instance, on the heat map we can see that on Tuesday during the day, almost nobody comes in. It’s all shaded (or not shaded) white. Is there a promotion or special you can run during this time to get more people in? Having analytics like this allow you to run a better business.
Optimize Your Inventory Management
By tracking your inventory data, you can identify slow-moving items, forecast demand, and ensure that you always have the right products in stock. This can help you reduce your inventory costs, minimize waste, and avoid stockouts. You can also use this data to optimize your supply chain, reduce lead times, and improve your operational efficiency.
Types of Data You Can Collect in Your POS System:
Sales Data
Sales data includes information about the products sold, the price of the products, and the sales channel. By analyzing this data, you can gain insights into your sales performance, identify your top-performing products and sales channels, and make data-driven decisions about your pricing and promotions.
Again, let’s look at another highly effective report from Lightspeed. This is called “The Magic Quadrant” and it allows bar and restaurant owners (and chefs) to analyze which dishes are working and which aren’t.

Here we see points of data on a chart divided into four quadrants: Greatest Hits, Hidden Gems, Underperformers and One Hit Wonders. Again, if you hover over a data point, information pops up to show how many times the dish was ordered, as well as the percentage of guests who returned after ordering that particular dish. Here’s how the Magic Quadrant works:
Greatest Hits: These dishes are not only ordered a lot, but they have a high percentage of guests who return after ordering it (high popularity, High customer retention rate). There’s no mystery here. These dishes stay on the menu.
Hidden Gems: This quadrant is filled with dishes that don’t get ordered much, but when they do get ordered, people come back (low popularity, high retention rate). This means we need to do a better job of describing the dish to make it sound more appealing, or we need to highlight it in the menu. Anything to get them to order more so it moves into the Greatest Hits category.
Underperformers: The dishes need to be removed from the menu. Guests rarely order them, and when they do, they don’t come back (low popularity, low retention rate).
One-Hit Wonders: These dishes get ordered a lot, but guests rarely come back after ordering a One-Hit Wonder (high popularity, low retention rate). These too need to be removed.
Armed with information like this allows you to absolutely murder your competition when it comes to putting together a menu of Greatest Hits. If you’d like to see everything that Lightspeed POS can do for you and learn more about them, you can sign-up for a free demo here.

Customer Data
Customer data includes information about customer behavior, such as their purchase history and preferences. By analyzing this data, you can gain insights into your customers’ behavior, identify trends and opportunities, and make data-driven decisions about your marketing and customer experience.
Such opportunities allow you to massively grow your sales.
Employee Performance
By tracking employee performance, you are once again able to schedule your strongest employees during the busiest times and your weaker ones during slower times.
Looking at these two server reports from Lightspeed, you can see how easy it spot your rockstars.

There’s very little mystery here. Servers that sell the most per check should be working the busiest times so that you can maximize your sales.

Same here. Servers who are turning and burning and have the fastest table-turn time are making you the most money. Get them on your busiest shifts and get the money rolling in. Without data like this, how would you even know who to schedule when?
Inventory Data
Inventory data includes information about the quantity and availability of products. By analyzing this data, you can optimize your inventory management, reduce your inventory costs, and improve your operational efficiency.
Using a POS system for inventory can be a bit misleading though. They claim to have “real time inventory”, but this simply means that every time an item is sold through the POS that the ingredients included in that item will be depleted in the inventory.
For example, let’s say the recipe for cheeseburger was set up in your POS system as: 1 bun, 1 hamburger patty, 4 oz. cheddar cheese, 1 leaf of lettuce, 1 tomato slice, 2 pickles. That means every time a burger is rang in, these items will be depleted from the inventory totals in the POS system.
What they fail to tell you is that if employees are stealing or the portions being used are being overserved, or there is waste, it isn’t being accounted for in the POS system. You have to have an actual inventory system like Bar Patrol Inventory App to count your inventory quickly and to keep your inventory accurate.
With that said, having accurate inventory analytics is one of the most important reporting tools you can have, especially for tracking bartender pours.
Transaction Data
Transaction data includes information about the payment methods used and the time and location of the transaction. By analyzing this data, you can gain insights into your customers’ behavior, identify trends and opportunities, and make data-driven decisions about your marketing and operations.
For instance, using Lightspeed’s “Guest Book” allows restaurant owners to view each guest individually so you can see exactly who you are catering to. With Guest Book, you can view a guests most ordered items, total visits, average spend, sales per cover, average tip and lifetime value. These are remarkable insights that help you grow your regulars like crazy.

Tools and Techniques for Analyzing Your POS Data
Reporting and Dashboard Tools
Reporting and dashboard tools allow you to generate custom reports and visualizations to track your business performance in real-time. By using these tools, you can monitor your sales, inventory, and customer data, and make data-driven decisions about your operations.
Data Mining and Machine Learning
Data mining and machine learning techniques allow you to uncover hidden patterns in your data, predict future trends, and identify opportunities for growth. By using these techniques, you can gain valuable insights.
What is the Best POS System For Reporting and Analytics?
In this situation you would normally have a few different systems factor in, depending on your restaurant needs. Which means “best” becomes a subjective concept. Simply not true in this situation. The POS system with the best reporting and analytics, hands down, is Lightspeed POS.
You might have guessed that, considering all of the examples in this article using Lightspeed reports.
The reason it’s the best is because Lightspeed recently partnered with Upserve POS, which was known in the industry to have the #1 reporting and analytics for all restaurant POS systems.
Now that Lightspeed has acquired these remarkable analytics from Upserve (and because of everything else Lightspeed can do), they have easily become the best restaurant POS system on the market.
Unlock the Power of Your POS System with Data Analytics
By leveraging data analytics in your POS system, you can gain deeper insights into your business operations and drive growth. By understanding your customers’ behavior and optimizing your operations, you can increase sales, improve customer satisfaction, and identify new opportunities for growth.
To get the most out of your data, it’s important to choose the right tools and techniques for your business needs. This may involve investing in reporting and dashboard tools, data mining and machine learning, predictive analytics, or visualization tools.
Ultimately, the key to success with data analytics in POS systems is to remain focused on your business goals and use data to drive decision-making. By staying ahead of the game with data-driven decisions, you can position your business for success in today’s competitive marketplace.
What are the Top 4 POS Systems?
Overall, after all my thousands of hours using and testing POS systems and speaking with owners and managers, I have found these four POS systems to be the cream of the crop. You can click on any of them to schedule a demo, which I highly recommend doing.
#2 – GoTab
#3 – Toast POS System
#4 – Rezku POS System
Thanks for being here. We’ll see you next time.
TheRealBarman Team