About Retail Automation In General
What are the benefits of computerizing a store?
The number one job in retail, of course, is serving the customer. A point of sale system is a tool which makes that job faster, easier and more profitable, but there has to be a cost benefit to computerizing. With today's technology the benefit is there as long as the retailer commits to using a system's full potential. Computerizing your business does not necessarily give you an advantage over your competitors - you may have to do it simply to stay competitive. Three areas where immediate benefits can be seen are:
- Increased margins due to better inventory management and reduced shrinkage.
- Increased sales due to prompted suggestion selling, staff performance tracking and targeted marketing.
- Speed and accuracy in the chores surrounding reports, invoicing, purchase orders and inventory control.
Is it best to start with the accounting system and tackle inventory control later?
Computerizing the accounting functions will have a very small impact on your profitability but inventory is your number one asset. Managing it well is a key factor to business success. Good inventory control means balancing the expectations of your customers and your bankers, so you have to avoid being either under or over stocked. Some systems offer both inventory control and accounting modules but most successful retailers use completely different systems for each one. This is because software that tries to do it all usually ends up doing some of it badly, and the few that don't are extremely expensive. If you computerize your inventory control first you will get a much better return on your systems investment. Timely details about sales, inventory, invoicing, margins, orders and customers will help you earn more money than a new accounting system will save.
Is taking inventory more complicated once a POS system is installed?
No, it can be done much faster and more accurately if the POS system can read data from a hand-held barcode reader. These units are carried to where the stock is and the counts are scanned or punched in. The information is later transferred to the computer by cable. The computer then pops up a table showing where the shelf counts do not match the computer data and gives you a chance to correct it quickly and easily.
What are the advantages of having bar codes on the stock?
Barcodes greatly increase the integrity of the point-of-sale transactions. If cash personnel have to enter a stock code for each POS transaction the chances of making mistakes are higher. Good retail management software should print barcode labels in two sizes and can automatically print a label for every item in the last shipment. Since the UPC barcode is industry assigned, you should use another barcode scheme for your own stock such as Code39. There is no problem associated with having UPC and Code39 labels in the same store because barcode scanners can auto-recognise which type of label they are reading.
What reports should we look for in a good system?
There should be a dozen to choose from, though most retailers use only three of four on a regular basis. Which ones you use will depend on the nature and style of your business. Better systems can limit the scope of a report to a given department, supplier, stock code range, etc.
Does entering a customer name and address take too long and annoy the customer?
It might, and it is important to be very sensitive to a customer's reluctance. However, this information is so valuable that not trying to gather it may be a mistake. Experience shows that it costs a lot more to get a new customer into your store than getting an old one back. This kind of marketing has proven to be the most cost-effective way to drive up sales. Better software systems allow for a variety of customer data and mailing capabilities which can identify customers by last purchase date, birthday, purchase history, customer type and salesperson. This is powerful information for the retailer because it gives us the ability to target promotions where they count, measure advertising results, purge inactive names from mailing lists and do follow-up phone calls. Once people are in the system they do not have to be re-entered, but can be called up by name, phone number, company or customer number. A good system will also give you the option to avoid re-typing the city, state and zip code for every new customer.
How long does it take to get a point of sale system up and running?
The setup phase can be a headache if it is not properly planned and then rushed through. Don't decide on Saturday that the system has to be installed and fully integrated into the business by Monday. Allow lots of time for you and your staff to get used to a new routine. It would be ideal to run the new system in tandem with the old one for a week or more, but this is a luxury that many stores cannot indulge in. The POS system should start providing useful information about inventory control and customers after a month of full-time use.