<?php
$row_values = [
    'POS RETAIL|INVENTORY STANDARD',
    'POS RETAIL',
    'POS RETAIL|',
    'INVENTORY STANDARD'
];

$items = [];

//get all items from database and explode the concat values.
foreach ($row_values as $row) {
    $items = array_merge($items, explode('|', $row));
}

//get only the distinct items.
$items = array_unique($items);

//remove the emtpy items.
$items = array_filter($items);

//initialize the list.
$list = '<option value="">SELECT SOFTWARE / HARDWARE</option>';

//create the list of unique items.
foreach ($items as $item) {
    $list .= "<option value='$item'>$item</option>";
}

var_dump($list);