Retail companies don't just implement
retail inventory control systems to harvest information and track inventory
and sales. They do it because it means cash. More cash than they get
could get out of their business otherwise.
Yes, there are operational benefits like
Price Controls, Employee Productivity, and Inter-store Transfer Reporting.
There are also productivity bonuses like automated tag printing and
scanning at Point of Sale, to name a few.
But the pressing reason to invest is
there is no other way to fine tune the performance of your business
to generate as much cash as through an inventory control system.
Consider
these points:
- Improve employee productivity
- Improve Turn Over Rate – the
single biggest value
- Decrease Theft
- Manage Return – the sale that
wasn’t a sale
- Improve Customer Loyalty
In More
Detail:
Staff
- How much time do you spend in a
week making and applying price stickers to your products?
- How many price stickers do you
change because of price changes or sale items?
- Improve staff schedules around
your slow and busy times of the day and week so that you know when
you need to add or take away a person from the schedule.
- Know exactly who your best
sales staff are from the point of view of
highest sales to least returns.
Inventory
- Do you know exactly how
long your items stay on the shelf so that you can order the minimum
amount of product thereby increasing cash flow while ensuring you
don’t run out between order cycles?
- How much stale product are you
carrying on your shelves? By way of example – if the minimum order
for a product is one case and you can order weekly, are you still
holding more than 1 case by the time the next order arrives?
- POS reports will help reduce the
amount of time you hold onto inventory.
- Small changes make a big difference.
Let’s say you stock 10 of product A. Let’s say 8 is really your weekly
supply (your re-order window). Eight or ten, what’s the difference?
How many times have you said to your vendor rep “give me 8… no make
it an even dozen”? Think of the cash flow savings by ordering exactly
the correct amount.
- Products that spend less time on
the floor are marked down less.
- Having better information on Turn
Rates will free up shelf space and allow you to add new & different
merchandise increasing customer interest. These new products
typically allow for higher margins than your staple products.
- Through inventory analysis you
can plan inventory purchases better by knowing what colors, sizes,
styles are more popular. For example how many size 10 women’s shoes
do you sell vs. size 3 or how many large
size ketchup do you sell vs. the smaller size.
- You know your store and you have
a pretty good idea of your inventory but by using exact data
you will improve turnover by a few percentage points. Think of what
that will do to your bottom line.
- Likewise knowing how most
of your goods are performing is not the same as being able to analyze
every last one of them. And even if it is only 3 or 4% of your
inventory.
- Sales analysis allows you to cut
back on weak products, eliminate under-performers and get stock levels
fine-tuned to maximize cash flow.
Manage Returns
- Do you know which products you
experience the most returns?
- For the same product – do you experience
more returns from one supplier than another?
- Do you experience more returns
from one staff member than another?
- Do you know why returns are happening
and can you improve the situation?
Security
- How much are you losing to internal
shrinkage – most people think it is lower than reality. Studies consistently
show more people will steal if they think they can get away with it.
By showing to your staff that you knowing exactly what’s on your shelves,
in the stock room and in the cash drawer will result in less theft.
Can you catch staff making fictitious returns or discounting product
for friends? The ability to audit and review transactions, spot check
inventory and monitor cash will deter employees from temptation.
- Inventory control will also help
track external shrinkage. Do you want to find out that a product
was “regularly stolen” at the end of the year or within one order
cycle or even quicker? Can you tell today if people are stealing
one chocolate bar every couple of weeks? Or do you just order more
bars? With inventory control your counts won’t match telling you
“you need to put the bars out front”.
Customer Loyalty
- Do customers sometimes have to
wait at your cash register while you walk back to find out the price
of a product?
- Do customers sometimes have to
wait at your cash register just because of a line up?
- Using scanning technology will
dramatically reduce both of these problems all while using
the scan codes printed on the products by the manufacturers.
- Is customer loyalty an important
aspect of your business? If so a POS system can track all their buying
patterns: how much, how often and what products. Once you’ve found
a repeat customer, someone who wants to buy what you’re selling, nothing
will help you keep him like a customer profile.
- This can guide you to when Sales
should be scheduled.
- This can also allow you to communicate
up coming sales to interested buyers: generate a list of customers
that historically buys flowers on February 14 and mail out a reminder
sales flyer.
Conclusion
A POS system will not suddenly
increase your sales by 30% (unless you were running your store really
badly).
A POS system will provide you with the information
to help improve staff, inventory, returns, security and customer loyalty
by a few percentage points.
You know your store – but without sales
analysis you can’t know every single item’s exact turnover rate.
Sales analysis will tell you that the
cans of soup deserve one more shelf space than the cans of beans or
that sweaters deserve more hanger space than
sweatshirts.
By having this information at hand you
can increase the efficiency of your store by a few percentage points.
Think of it as getting a 5% raise or more in your bottom line.
ALL
FOR LESS THAN $6.00 PER DAY
(per station oac)
