You know that your POS system is a wealth of knowledge, and you’re not one to scoff at learning a new retail strategy, but a POS power user?
Who has time for that? The thing is, you do! Superior POS systems are configured in ways that all you need is a few minutes a day to learn and take advantage of all your system has to offer. But since we know time for all small business owners is tight, we took the liberty of putting together for you a few of our favorite strategies. You’re welcome.
1. Create a Sales Forecast
If you are using a cloud-based POS system, you should be able to easily take a look at your year-to-date sales volume and compare it to last year. Establishing a baseline for the current year’s performance compared to last year’s is necessary for forecasting sales in the future. If sales are trending downward, will this continue? Likewise, if your sales are up 15 percent, you need to determine if this trend will continue. Establishing a baseline forecast will help both you and your staff understand your goals going forward. If you’re interested in diving deeper into the world of sales forecasting, check out Your Foolproof Strategy to Forecasting Retail Sales.
2. Track Your Customer Activity
The lifeblood of your small business is understanding what your customers want. After you know that, you can focus on determining how to deliver to your customers exactly what they crave. Using your POS system as a CRM (Customer Relationship Management) tool can help you determine what your customers will purchase before they even step foot in your store. Pulling a Customer Activity report can help you do just that.
This report can come in many forms, but at the bare minimum, it should show the top customers in terms of frequency of visits and purchase amounts. It should also track the number of new customers you’ve added. A POS system with email integration makes it easy to send out custom messaging and email marketing campaigns. If your point of sale system doesn’t offer these features, you might want consider making a switch.
3. Run X and Z Reports
We are all about empowering employees — no one likes to feel as if they have to keep a hawk eye on their employees at all times. And we know that employees appreciate the trust. But sometimes, keeping a close eye on staff activity is going to be an important factor for your success. Enter the ‘X’ report. This report will provide your cash drawer balance at any point in the day. It’s cumulative, meaning that it does not reset to zero, but simply keeps a running total of activity at the register. If you’re running ‘X’ reports, you’re going to want to run ‘Z’ reports as well. A ‘Z’ report is generated when you want to know the final balance of your cash drawer. Like the ‘X’ report however, ‘Z’ reports do not reset your drawer to zero, so you want to run this report at the end of the day or after each shift. Each of these reports tell the story of your cash drawer activity and what your employees have been doing at the register. When viewing these reports, verify that the amount listed matches the amount present in the drawer to ensure the integrity of your employees. Granted, mistakes are inevitable, but frequent ones or — even worse — purposeful theft, can ruin your bottom line.
4. Use Well-Defined and Unique Item Descriptions
You might already be doing this, but just incase, make sure that you’re creating well-defined and unique item descriptions for all of your products. We can’t emphasize the importance of this enough. Item descriptions that are vague or too similar to other item descriptions are not only confusing, but can lead to major (we repeat major) inventory and ordering mistakes. To get yourself in the habit of creating unique item names, we recommend coming up with a consistent template for how to label your products. For example, are you selling mugs with various kittens on them? Make sure that each mug is marked in your inventory with the size of the mug, color of mug, breed of kitten, and vendor. It might look something like this: Size_Color_Breed_Vendor. This way, even if you wind up with three different mugs that all have images of Maine Coon kittens, you’ll be able to distinguish between them. Prefer to use a modifier other than vendor? That’s fine too. Just make sure that your inventory list is consistent and that all — we repeat all — employees find the system intuitive and easy to use.
5. Run Inventory Reports and Trigger Points
With the exception of service businesses, inventory management is one of the most important, but also laborious, tasks for small business owners. If you’re tracking inventory quantities on paper, you’re doing yourself a major disservice. Not to mention piling a load of extra work onto your plate. Robust POS software has reports that track your inventory quantities and update in real-time as each item is sold. You can also enter a minimum quantity or ‘trigger point’ to alert you when specific items are running low, a great tool to ensure that you’re never caught without a product. After all, there really is nothing worse than losing a sale because you simply ran out of stock.
So does that power user status feel different? Yeah, we thought so! Adopting retail strategies by leveraging POS tools is one of the most time-efficient initiatives you can embark on. While learning all your system has to offer can often feel like a marathon — like most things in life — it’s all about the journey, not the destination. So keep your head down and keep selling!