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POS System health check: Five compelling questions that invite a review of your Retail Management System

September 12th, 2012

Category: ERP Enterprise Resource Planning, Point Of Sale Systems, Retail Business Tips

Testing Blood Pressure - CloseupThis article lists five questions you need to ask about your current retail system to assess whether it has the capabilities to support your business in what is now a fast-moving, no-holds bar, retail terrain.

We ask whether your current system has the strength and flexibility to:

1. Easily handle the demands of a New Retail era?
2. Support the new customer paradigm?
3. Provide insight into business performance?
4. Support business viability and growth?
5. Simplify your working life?

1. Does your current system easily handle the demands of a New Retail era?

There is a lot of talk about the New Retail era – brought about by the advent of e-commerce and more recently, innovations like smart phones and social media networks. These have produced a different retail environment where experiential brand building, community-based marketing and omni-channel retailing, are taking centre stage. For those that have taken up the baton of the New Retail era, its business as usual while for others stuck in the old way, it’s rather gloomy as seen by collapses and departures like Darrell Lea or recent Harvey Norman results showing profits down by 40%. The view, according to recent articles on both retailers is not so much external forces making things tough for them but rather their inability to adapt to change.

While the New Retail era is demanding merchants rethink their strategy in a big way while still keeping a tight rein on business operations, it is also challenging retail software vendors to step up with sophisticated, yet easy to use ‘automation’ that can handle ‘new’ retailing demands. To that end, ask yourself: Does my current retail software enable me to do the following:

1a.   maximise return on investment in stock?
1b.   run a lean and cost-efficient business?
1c.   easily manage multi-sales channels?
1d.   execute modern marketing concepts, e.g. advertise targeted promotions by SMS or email
1e.   easily analyse sales, stock and financials to assist with astute business decision-making?

If you answer ‘No’ to any of the above questions, it might be time to update your retail system.

2. Does your current system support the new customer paradigm?

There is a new customer paradigm operating and at its core is the understanding that in the New Retail era it is the consumer that holds the power and not the retailer. This growing power has created a new breed of consumer: opinionated and influential; savvy and well-informed; inundated by more choice than ever (think comparison shopping sites); and most significantly they expect to receive highly personalised service on the shopfloor or online. Today, appealing to the new breed of consumer is only possible utilising robust automation, as illustrated by Fashion giant Zara, who consistently analyse their POS data in order better anticipate customer demands and preferences. To that end, ask yourself: Does my current retail software enable me to do the following:

2a.   integrate all my sales channels (shopfloor, online, eBay, comparison sites, etc.) to streamline operations, and maximise sales from all channels?
2b.   provide integrated Customer Relationship Management (CRM) so I can build an effective customer loyalty program, and easily execute targetted and timely promotions?
2c.   determine Customer Lifetime Value by customer, by customer source (in-store, online, comparison site, etc.) so I can determine the real Return on Investment, per sales channel.

If you answer ‘No’ to any of the above questions, it might be time to update your retail system.

3. Does your current system provide insight into business performance?

In this New Retail era, it’s either sink or swim, so it’s essential to keep a watchful eye on business performance across sales, staff and stock holdings. This helps you make more astute business decisions ‘on-the-fly’ and also when planning for the future. To that end, ask yourself: Does my current retail software enable me to analyse the following:

3a.   profit earned from a promotion
3b.   profit earned per salesperson per hour worked
3c.   my best/worst categories/departments/stores/suppliers
3d.   true profitability of stock (e.g. GMROI).

If you answer ‘No’ to any of the above questions, it might be time to update your retail system.

4. Does your current system support business viability and growth?

At the very least you’re focussed on keeping your business stable with an eye on future growth, a challenge in an unpredictable global economy. This means you need a system that is robust and flexible enough to handle changing consumer tastes and preferences, and unexpected competition from overseas brands. If you’re utilising outdated POS, it could mean you’re incurring higher operational costs due to inherent system inefficiencies. And if you’re utilising very basic POS it probably doesn’t allow for transactional data to be analysed – helpful if you’re looking to maximise business health and performance.  To that end, ask yourself: Does my current retail software have the following capabilities?

4a.   enable me to quickly scale my business up or down without incurring high technology investment (think Retail Software in the Cloud)?
4b.   Provides me with insight into financial performance, overall and across stores/branches and departments, which helps me to better forecast budgets and sales?
4c.   comes with the latest software functionality that meet new retail demands (i.e. ability to seamlessly integrate bricks and mortar with online operations)?
4d.   is supported by a ‘help desk’ and support services to maximise use of software features as retailing and customers place new demands on my business.

If you answer ‘No’ to any of the above questions, it might be time to update your retail system.

5. Does your current system simplify your working life?

A good retail system should simplify managing operations, so you spend less time working in your business and instead have more time to work strategically on your business – especially important if you’re focussed on increasing market share or want to implement expansion plans.  To that end, ask yourself: Does my current retail software simplify things for me in the following way:

5a.   automates as many transactional processes as possible
5b.   provides a high level of automation for superior management of stock across multiple sales channels?
5c.   provides a unified view of my multiple income streams (from bricks and mortar, eBay, online store, Facebook, etc.)?
5d.   enables me to have a holistic and integrated view of my operations (view comprehensive reporting features), so I can make informed business decisions quickly?

If you answer ‘No’ to any of the above questions, it might be time to update your retail system.

While retailing today is challenging, it’s also an exciting time as long as you have the right support networks and software tools. Ensuring you invest in a sophisticated retail management system will help you transition into the New Retail era with confidence.  You may want to find out more about CONTROL Retail Management System which answers ‘Yes’ to all of the above questions.  Contact us or phone Bernie Hogan on 1300 646 536.