A Point of Sale's Value is in the Using [GUEST BLOG]

By Evan Wise
Managing Director- Management One®

Point-of-Sale (POS) systems are a valuable tool and a necessity for running a retail store today.  YOU CAN'T WIN THE GAME IF YOU CAN'T KEEP SCORE! ALTHOUGH RETAILERS SHOP FOR A SYSTEM WITH THE MOST BELLS AND WHISTLES AND NEAT FEATURES,  many have not progressed  beyond printing price tags and ringing up customer purchases.

Customer tracking
While all POS systems have the ability to track basic customer information like Name, Address, Phone Number and Email address, most systems have the ability to track customer types (Surf, Skate, Snow, Bike), birthday, anniversary, etc.

Use your POS system to  track your customers buying habits.  Your customer's purchases will give you a wealth of information from which to do selective marketing.  Here are some examples:

·         Reward your best customers by sending a thank you gift card or certificate. Invite customers that haven't made a purchase in the past 12 months back to your store
·        Send a  Birthday card with a special offer or incentive.
·        Specific merchandising  to customers that bought a specific item, vendor, style, color or size  There are many creative variations of ways to use POS information  to enhance sales,  loyalty and rewards programs.

Merchandising Analysis
Your POS system  gathers data that feeds a merchandise planning system which is the foundation for your assortment planning.  Use your POS system  to identify groups of like merchandise (Departments, Classes or Subclasses) and drill down from there.  Develop or find the reports that will provide that information:
·         Sales and Inventory Report to evaluate your sales, markdowns and inventory levels.
·         Best Sellers/Worst Sellers Reports to find items that need to be replenished (Best Sellers) or to identify items to promote or markdown (Worst Sellers).  It is best to make these decisions based on gross margin dollars or sell through percent.   Unit sales can be distorted as a best seller is not something that was sold through markdowns.
·         Vendor Analysis Report to find  the vendors that performed the best within a group of vendors within a department, class or subclass.
·         Vendor Performance Report (shipment) report to help identify vendors that ship the highest percentage of what you order.  Size Analysis Report could be a helpful report to compare the sizes you sell to the sizes that are remaining in your inventory.
·         Many other reports will help make the right decisions for your business!

Success means knowing the right amount to buy in each classification.  That is called open-to-buy (OTB) planning and depends on accurate sales forecasting in each category. Many POS systems offer an option to develop OTB plans. A caveat is that these systems are very simplistic in their ability to forecast sales accurately and therefore the OTB plans can be way off.  An OTB planning professional can develop more accurate forecasts and OTB plans to assure you not only get the right goods, but that you get the right amounts (correct stock to sales ratio for each classification each month)  and flow them into the store at the right times. That assures fewer stockouts, lower markdowns and the availability of cash to pay the bills when they come due.

Store Management
Most POS systems offer analytical reports to help you fine-tune the operational functions of your store including tender types, salesperson productivity and sales by day and/or hour.
·         compare actual store deposits to recorded tender transactions to help you identify losses, theft or bank errors.
·         Salesperson Report would help identify your best salesperson by amount sold, number of items sold and even number of transactions.  Use this to track sales performance against the goal set for each salesperson each month.  When you measure results you improve results.
·         Time Period Reports could help identify the best days and times during the day for store activity.  A great report for planning days off and break times as well as scheduling sales staff.

Your POS system is a great data collection vehicle, and if used properly can be used to lead you to develop information that can impact the actions you take when running  your business.  But remember, it is only a machine that relies on human interaction.  Maintaining accurate information is paramount and that only happens when the input is accurate.

Your POS system is the start of success.  If you drop the ball before the goal line you won’t score.

 

 

 

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Point of Sale Reports: Preparing for the Holiday Season

By: Jamie L. Novick of Next Step Retail Solutions  

Traditionally retail is seasonal, Spring begins in January, Summer in April, Fall in July and the Holiday season in October. Accordingly, receipts are planned and floors are set.  Yet, when we look at the numbers from each season, retailers are finding a larger and larger percentage of yearly sales are done in Q4 / Holiday.

In some cases more than half of a total year’s revenue will come from the last three months of the year.  In today’s marketplace Q4 can start as early as August. How you prepare for this make or break Q4 / holiday season as a retailer in today’s economy is more important than ever. Not only do you have to be priced right and merchandised beautifully, but the buying decisions you made 6-9 months ago need to count! You have a very limited amount time to sell product and you need to move it fast!

So, how do you prepare? Preparation starts in the reports. For the apparel and accessory retail clients we consult we impress upon them how imperative it is that they are aware of what reports are available from your POS systems. Clients need to know how their product, merchandising, pricing and overall store demographics are impacting sales. By running key POS reports that capture daily, weekly, monthly sales and the inventory by department, style, size and color levels you will be able to better manage your inventory and positively impact your current and future sales.

From a visual merchandising perspective, retailers often focus on making the new receipts the biggest focus. This is important but keep in mind you should also run reports that show what styles are doing the majority of your business and what styles are taking up most of your OTB (Open to Buy) dollars.

The traffic driven into your store during the holiday is a key time to move through older goods. Customers do not know the difference, for example, between a basic black top that is 1 day or 100 day’s old. Especially if you make the old look new by re-pricing and with smart merchandising.

You need to have an awareness down to the SKU level of what you have on hand in units and dollars as you enter this holiday season. The time to start pulling reports and strategizing about how you are going to merchandise all of your product new and old is now! My clients are amazed when we look at the bottom 25 styles not the top 25 styles. Best seller analysis is important but so is inventory analysis.

For help with your POS report interpretation or to discuss your merchandising strategies as you enter your most lucrative season please feel free to contact me.

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