September 1, 2012

Sold on POS Systems


Retailing is one of the oldest trades known to mankind. I remember the days when some retailers used to collect money, place it in a shoe box, and then count it up at the end of the day. As long as the business stayed small, they kept in touch with the transactions and had an understanding of the business.

I went to a shop recently where the sales assistant made the sale, and then wrote down the article she had sold before she handed it to the consumer. The consumer stood there and got frustrated while she managed her stock control system by hand. I, for one, would avoid that retailer in the future.

The irony is that in 1879, when Dayton, Ohio, inventor James Ritty invented the cash register, he was not intending to improve the customer experience. He invented it to stop staff stealing the money.

We have come a long way since then, and now my local hardware store has a self-scanning system.

If you cannot measure, you cannot manage
Every retailer is aware that retail is detail. Detailed information that can be measured, and provides information to run the business, is valuable in these more difficult trading periods.

Modern retailing is a combination of the art of display and the science of retail management.

The Point Of Sale system (POS) is vital to running a business. It has long moved on from a piece of equipment solely used for taking money. Like the smart phone, many people will argue that the thing they do least on it, is to phone somebody. The POS is exactly the same. The right point of sale system is not a cost to the business, it is a saver of money. No point of sale system should be looked as a cost. If it is, it is the wrong system, or is being used in the wrong way.

Before you purchase a system you need to list the things you want it to do. Only then can you talk to an agent and get the advice you need to ensure you are getting the system best suited to your business.

Maximising stock turn
How many products have you got in stock, how many have you sold, and how many do you need to buy? This is one of the real challenges of a retailer. In the old days, the only way of getting a real picture of what was going on was to go out and physically count items in inventory. This was laborious, time wasting and rarely accurate.

This is one task that can be made a lot easier. The key is to make sure you are inputting accurate information, and then you can get accurate information out. I have clients who tell me that they reduced their stockholding by at least 20 per cent, once they had introduced a POS system that could monitor nursery or garden centre stock management. This is a substantial saving, and means that product also looks fresher, as the slower movers are identified and managed accordingly.

One of the easiest ways of improving performance in your business is to know how you are performing.

Once team members can work out the average sale per customer and the average sale per square metre, they can put actions into place to increase those performance indicators. I remember working with a garden centre where the owner did not believe that the staff should be provided with performance figures. His concern was that they might tell his competition.  After convincing him that it was essential to let the team know the figures, he told the team and planned to introduce a training program. Once the team knew the figures, and even before he introduced the training program, the average sale went up 15 per cent. The team had a measuring stick they could use, and started wanting to help customers more, and watched the customer count and average sale increase.

Retailing today is tougher that it has ever been. Retailers need to be able to share ideas and information to judge how they are performing in comparison to the overall industry. This is where benchmarking is such a valuable tool. Once you can measure yourself against the rest of the industry, you have reassurance of how you are performing. If you are underperforming, you can instantly do something about it.

Benchmarking is one of the most valuable tools that you can have as a business. It helps and reassures you that you are performing at peak performance.

To the retailers who have not developed a point of sale system for their own business, there is good news and there is bad news: The good news is that you must have a system to move your business forward, and the system is an investment that will save you a lot of money over the years. The bad news is, that for the first year, it takes a lot of time and effort to get to where you want to be. “Do not give up” is the only advice I can offer. The longer you leave it before you jump into a POS system, the more difficult it becomes. If you have not jumped, my advice is, “jump now.”
John Stanley is a consultant, author, trainer and speaker specializing in perishable retailing. Many of his clients have gone on to win industry awards after his coaching.