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This article examines how SME retailers could tap their retail
management systems to help increase sales and margins.
Intensify sales training
Know what your staff is selling and when. Run a report on 'employee's
sales by merchandise categories'. This allows you to narrow down
on who needs more product training and in which products. All shopfloor
personnel can be transformed to sales. Yes, everyone on the shopfloor
can be trained to sell, including the cashier. Use this report to
identify training needs and boost sales.
Increase customer traffic through targetted
mailings
Customers remember you when you remember them. Do you know who your
customers are and what they want? If your system can track their
sales history with their demographics, you can send birthday greetings
or targetted promotions to them.
Eliminate slow movers, stock fast movers
Identify your fast and slow moving items, so that you can clear
the slow movers, at cost if necessary, and reinvest the money in
fast-moving inventory. For seasonal items, recognise slow movers
early in the season and try to push them out early when items are
more 'saleable', to avoid drastic clearance markdowns at the end
of the season.
Reduce markdowns
Set minimum and maximum stock levels so that you do not overstock
which you may need to mark down significantly later. Most systems
can generate purchase orders automatically when the reorder levels
are triggered. Identify unprofitable vendors and merchandise from
vendor and merchandise profitability reports. Generate comparison
data amongst vendors to negotiate for better discounts.
Reduce shrinkage
Most retail owners say that normal 'shrinkage' (ie. stocks lower
than what they should be) rates run between 3% and 5% of sales.
A competent inventory control system should lead to a 2% decrease
in shrinkage (or 2% increase in sales) as:
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Stock levels are monitored continuously.
Tighter inventory control is a deterrent to theft and fraud.
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There is a lesser chance of Point-of-Sale
mis-pricing and other errors, intentional or unintentional. |
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Orders are tracked, reducing missed orders
and improper shipments. |
The Retail Management Solutions team at Stone Forest IT helps
retailers manage retail operations more profitably through Retail
Pro®, a proven management software that is suitable for the small
single store to large multi-store environments. Retail Pro® manages
front to back-end retail operations seamlessly, from inventory control,
purchasing, receiving, tagging, distribution, point of sale, customer
management to reporting and analysis.
Year published : 2001
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