Make Better Use of What You Have

By  Mark Lotstein, President, Retail Optimization Group LLC

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Over the past few years, we have worked with many clients who had implemented scanning and back-office software but were not getting the full use or return on investment from it. Whether you own one store or 100, I can almost guarantee that if you have scanning and back-office software, you could get more out of it by taking some basic, easy steps.

Check Your Software Version

When was the last time you upgraded your software? Do you have the latest version? Many times store operators purchase software and just don’t stay up to date with the latest version. This can be a big mistake. Recently a number of back-office-software companies have made major changes to their programs. Some of them include ADDS, CMI, Datamax, S2K and SSCS. With each of these software programs, the newest versions have made their products more intuitive and easier to use. They also have added significant new functions and features that really can make a differ­ence in your ability to better control your business and increase profitability.

Use Your Reports

How many different reports does your software offer? Do you know what information each report provides and how it can help you? I used to sell software, so it has always been a point of frustration to me how few users truly understand the reports available within their software. Here are some reports many programs offer that can help you make more money:

  • Margin Report: What is your margin on an item-by-item basis within each department? Have you ever looked at margins within a department item by item? If you haven’t (or at least haven’t recently) you may be very surprised at what you find. Example: If you have three types of mint gum, and one makes you 47%, another 45% and third 38%, do you really want to carry the third brand?
  • Cost Increase Report: Compare current item purchases to the last time you purchased the item to show you the cost increase and change in margin. Mar­gin erosion is one of the biggest factors in lowered store profitability today; if you have this capability in your software, it will have a major effect on your bottom line.
  • Movement Report: What is selling and what is gathering dust? If it’s not sell­ing, there is no need to stock it. There are always new products to try, and we all know space is at a premium. This report, run quarterly on the department level, is a no-brainer.
  • Inventory Days on Hand Report: The item may sell at a good turn rate, but if you get deliveries every week, why do you have a four-week supply of the product in stock? That’s doing nothing but tying up your money.
  • Cashier Tracking Report: View how many customers each cashier serves during a shift, the average value of their transactions and the number of voids, error corrections, etc. Compare to that of the other cashiers to help with better training, determine if someone is stealing, and do a bet­ter job of managing staffing levels.
  • Training and Communica­tion with the Software Vendor: Are the people who use the software in your office fully trained on it? Or did the original user of the software leave the organization, and the person now using it has never been trained by the software vendor? How often do you speak with the software vendor about how you are using the software, issues you are having and functions you wish the software could support? This is an area often overlooked, and it shouldn’t be. Most software ven­dors want to help their customers, and also change and update the software based on customer feedback.

There are many other ways to get more out of what you have. If you have questions, would like other ideas on this topic or would like to share any feedback with me, please email me at mark@retailopgroup.com.

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