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In This Issue:
Feature:
The Art of Running a Sale
Did You Know:
Including Technology in Your Retail Business
Meet the Maker:
Balboa Baby LLC
Trade Show Info:
Latest News about Juvenile Product Trade Shows
Baby Buzz:
Product News & Press Releases from the Juvenile Product Industry
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Including Technology in Your Retail Business
My father has been a single store retailer in the New York area for over 50 years. Even now, at the age of eighty-one, he still goes to the store every day and makes a respectable living. I grew up re-stocking shelves, ringing sales, straightening up the dressing rooms, and going on buying trips to lower Manhattan. Neighborhood retail is in my blood—there’s no denying it.
In the interest of full disclosure, I must reveal that despite having a retail IT specialist in the family, the only technology my father includes in his business is a customer list that my sister typed into a Word Processor, so he doesn’t have to hand address the semi-annual mailings he sends out. I feel bad about this, as I can see how hard he works manually performing tasks the computer could do far more easily and accurately.
I enjoy talking about technology and the various ways it can be helpful. This, in fact, is the main subject I’ll address in this article.
Why should you include technology in your retail business?
Small retailers succeed because they have a real sense of what their customers want. They know their products and they know their audience. Let’s face it: if all that consumers cared about was low price, the world would be one big Wal-Mart. The good news is customers also like to be catered to. Technology is a poor substitute for the intimate knowledge you have of your customers, but technology can be a great time saver. As an alternative to you figuring out how much of an item to buy through guesswork or a calculator, a computer system can show you how much you bought of a similar item last season, how many you sold, and how many were left at the end. It’s a pain in the neck to do this manually, especially if you carry a broad product mix. Technology can help you figure out how much to buy and which items make you the most money. If you buy smarter, you will have less clearance left at the end of a season and more money to build your business.
It sounds simple but in order for technology to help you with this task, you’ll have to add automation into some other parts of your business to gather background data. As it turns out, adding these other technologies will also bring benefits.
What technologies do you need?
The good news is that the biggest technology companies in the world, like IBM and Microsoft, have recognized that there’s a huge market for them among small and medium-sized retailers, so they are going out of their way to make technology affordable and attractive. This means that relatively sophisticated computer hardware and software that was once only available to large chains is now available to the small and medium sized business owner.
It all starts with capturing accurate information at the Point of Sale. Computer-based cash registers and their associated software have come down in price by over 75% over the past few years and have become much easier to use. The other goods news—a good Point of Sale (POS) system will make it easier for your employees to record sales information accurately. You will exchange a day of training an employee for valuable knowledge on what is selling. This knowledge is the baseline information you will use to more quickly determine how much to buy next time around.
Once you know what is selling, you need detailed information on what you are buying. Having an accurate purchase order management system, which includes accurate styles, costs, quantities ordered and received, and initial retail price information sets the table for figuring out whether you’re winning or losing. As a side benefit, having information at your fingertips on how much you spend with any one supplier can give you valuable ammunition in getting price breaks. It’ll also help you insure that you’re paying for what you actually received, compared to what the vendor says he shipped, or what you originally ordered.
Accurate sales and purchase information drive the analytics you will need to decide how much to buy. With baseline information in place, you can quickly cut to the chase—how MUCH of any one item should I buy? If two items sold in the same volume, which one did I make more money on? Business analysis tools are the “secert sauce” that will free you from the drudgery and guess work of planning a season’s purchases within a predetermined budget.
Use technology to understand your customer’s purchase patterns. Finally, we come full circle back to customer service. My father’s mailing list would be even more effective if he kept track of what those customers bought, when their children’s birthdays are, and other relevant facts. He could keep this information in an automated “tickler file” and send them a courtesy note. Inexpensive customer relationship management (CRM) software is available today that allows retailers to do just that. These system components: Point of Sale, purchase order management, business analysis tools, and Customer Relationship Management are key to getting control of your business and can help you get your head free of details and into every retailer’s most important job—pleasing your customers.