A Day in the Life of a Small Business Retailer
The above infographic came to us from Software Advice, a site where retailers can review POS options. We spoke with their retail market researcher, Justin Guinn, about the data he uncovered and what the implications are for merchants today.
Q&A with Justin Guinn:
Your research uncovered how many retailers have POS software, and how many don’t. What did you find?
Our research found that 64% of single-store retailers don’t currently have POS software in place. This was quite surprising given the many benefits POS systems offer to retailers. These systems streamline tedious tasks and free up time for retailers to spend developing their business.
The infographic you put together shows what daily life is like for a small business retailer with and without a POS system. What are some examples of how having a POS in place can help out a store owner on a daily basis?
Given the majority of retailers are operating without POS systems in place, they are relying on manual methods to complete tedious tasks like counting inventory and analyzing sales data. Manually counting inventory is the bane of so many retailers, but it’s crucial for a successful business. From a customer perspective, we found that 83% of people will stop shopping at a store if they experience their desired item being out of stock. Thus, accurately counting inventory is critical for successful retail businesses, and relying on manual counts might not be the best way to move forward.
Not only do POS systems automate tedious tasks like inventory management, they also enable retailers to gather, manage and utilize valuable customer data. This information can be used to engage customers and build loyalty programs. Our research shows 66% of customers are likely to stop shopping at a store if they’re not recognized for their loyalty. With such a large chunk of loyal customers who are ready to hit the door, a POS system is an easy way to curb that frustration.
Apart from those features, we know that EMV is important, but would you say that merchants need more from the actual checkout process than just accepting chip cards?
EMV compliance should have been a top priority leading up to the October 1, 2015 deadline. Now that we’re past the liability shift, it’s imperative for retailers (especially those with high priced items) to become compliant. However, this compliance shouldn’t be the only factor for retailers considering a POS system. Benefits of POS adoption extend far beyond EMV compliance. For example, manual checkout processes are inefficient and can create long lines during rushes. We know from our research that 82% of customers are likely to stop shopping at a store after experiencing a long wait. Not only that, but manually checking out customers opens the door to a greater chance for employee error with ringing up customers. These pricing errors add up, cutting into retailers’ bottomlines. POS systems expedite the checkout process and greatly increase the accuracy, proving them invaluable to retailers.
What do you think is holding a retailer back from adopting a POS system?
Retailers are obviously apprehensive about adopting POS systems, hence why so many don’t have one. This could be because the spend seems too expensive, but that’s typically not the case. The market is flooded with more-than-affordable SMB-focused POS systems.
Another likely reason retailers haven’t adopted POS is because they’re “comfortably disorganized” in their ways. If those ways are working, it’s hard to see why they’d need to change. But be assured, manually managing a retail operation will lead to cracks forming over time. Not to mention, it really puts a low ceiling on the potential for growth.
Finally, most retailers are likely overwhelmed with the POS adoption process. There are a number of systems on the market offering different features and specifications. In the free consultations we have with retailers everyday, we hear that, and understand the struggle merchants face with their tight margins. Once we have that 15 or 20 minute meaningful chat, most retailers walk away understanding the benefits they’ll really gain from a POS system. That way, they can move forward with confidence and adopt a POS.
Ask yourself the questions below and if you cannot answer them quickly then you owe it to yourself to evaluate your options and use tools that will help you be more successful.
Below are some common questions that retailers keep asking themselves and we solve that within our solution:
- Do you know what the value of your inventory stock is?
- Do you know how well the styles are selling?
- Do you know what style colors & sizes are selling well?
- Do you know WHEN to mark down items (timing is everything)?
- Do you know how many times you mark down these items and are the mark downs eating into your profit margin?
- Do you know your top selling items?
- Do you know your top selling Departments, categories & subcategories?
- Do you know what your profits are on a daily or hourly basis?
- Do you know who your top customers are? how many times have they shopped with you?
You need Retail metrics to keep an eye on your profit margins.
Capture maximum margins using retail metrics before you start marking down products.
- IMU (Initial Mark Up),
- BOH (Beginning On Hand),
- AUR (Average Unit Retail),
- Mark Down
- Sell Through %
and many others will give you the pulse of your boutique operation on a daily basis & help in maximizing profits.
And many more profit busting questions….