How a POS system can maximize your store's profitsHow a POS system can maximize your store's profits
POS programs can offer serious profit-boosting potential, helping to manage categories, control inventory, monitor success of sales and promotions, and even track employee performance. Here, three experts share the best ways to use a POS system to bolster your business and, ultimately, put more money in your registers.
January 2, 2013
Whether you are a point-of-sale pro or are just now thinking about swapping old-school calculators and price stickers for a slick, storewide system, you know that POS programs can offer serious profit-boosting potential. At the very least, they make checkouts quicker and more efficient, but they also can help you manage categories, control inventory, monitor success of sales and promotions, and even track employee performance. Here, three experts share the best ways to use a POS system to bolster your business and, ultimately, put more money in your registers.
Identify top sellers, slow movers.
From our POS data, we categorize products into tier 1, 2 or 3, based on the velocity of movement. If a product is below a 3, it’s not a good seller, and we consider discontinuing it. We strongly emphasize keeping tier 1 and 2 items well stocked, and we label shelf tags with these numbers so our supervisors can quickly walk the floor and focus just on top-tier movers. As a result, we have significantly reduced inventory but increased sales.
Use POS data to monitor the movement and duration of promotions and assess their margin success. From this info, you can create promos at lower margins, gauge velocity and determine whether the lower margin drove sales and more dollars into the bank.
Learn from other retailers.
Get outside your own business and find retailers who are willing to share their ideas and walk you through their POS systems and processes. We’ve leaned on other, progressive retailers along the way, and now I regularly get calls asking how we do things. I like to pay it forward and help them out, so we’ve had retailers spend half a day with us while we show them our operations.
–Dean Nelson, owner of Dean’s Natural Food Market in Ocean and Shrewsbury, N.J.
Get a jump on ordering.
Features such as suggested ordering let retailers determine purchase orders based on inventory that was sold within a specified time period. Suggested ordering can calculate trends from historical data while looking at factors such as seasonality of products, lead time from suppliers and next order date to accurately project the best possible order. This helps ensure that the right products are on your shelves at the right times.
Tap into mobile functions.
Auto-Star recently added the ability to send retailers important information such as net sales and daily cash reports via email or text message. Reading real-time reports on your mobile device allows you to analyze and respond quickly to sales and customer trends—even when you’re away from the store.
Rely on your vendor.
Count on your POS vendor to continue working with you after the sale by providing ongoing training and software support. Our clients can contact us to answer questions, walk them through problems or dial into their stores. A good vendor will keep up to date with industry trends, listen to your feedback and provide upgrades.
–Autumn Schweitzer, marketing representative at Auto-Star Compusystems in Medicine Hat, Alberta, Canada
Do your legwork.
Understand the amount of work involved with implementing a POS. Do as much preparation as possible up front, such as creating signage and completing other peripheral duties, some of which will be new to you. Make sure all of your employees, whether they work the registers or in the back office, know how to use the POS properly and can read the system output.
Match the system to your promotion types.
When putting in a new POS, be sure it can handle the promos you want. For instance, if you do a lot of buy-one-get-one deals, the system needs to do these at the register so that it tracks products properly and you don’t have to perform manager overrides while customers stand waiting.
Prevent theft, abuse of pricing power.
Make sure security software monitors your POS to help with loss prevention. Does one associate consistently have voids? Your POS should be able to tell this. Or, if your system includes guns that can change prices, perhaps an employee lowers a product’s price to “help out” a friend who stops by and then he quickly brings the price back up. A good, secure POS system would identify this activity right away.
–Pat Fitzpatrick, president and CEO of Atlanta Retail Consulting in Atlanta
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