Retail businesses require expansion, in terms of increasing physical locations or getting more customers into the store. But there are several other ways of boosting profits that involve payments management and analysis, though these are often overlooked by most owners.
Apart from the cost of owning and maintaining a point of sale solution, software subscription costs can also be a significant drain on your resources. Instead of using multiple tools for the purpose of checkout, inventory management, customer data management, in-store analytics, online storefront and so on; consider going for an integrated, iPad-based point of sale system.
You can save yourself the hassle of managing multiple software tools and also ensure that your shop always stays ahead of the competition with free, continuous software updates by your iPad based POS.
If all the buzz about big data in retail is to be believed, tracking these metrics (preferably in a customized dashboard) will go a long way in ensuring your stores sustained success.
Another important element is average basket size and average ticket size, and both involve payments data. Average basket size refers to the number of items getting sold in a single purchase. It is the equivalent of total units sold divided by the number of invoices. Depending on the kind of business, average basket size can be a very important metric. For instance, this metric is more relevant to, for example, a pet store selling small-ticket items as opposed to a jewelry store selling distinguished merchandise.
Average ticket size is just the amount of money that each buyer spends on average per visit. This figure can be influenced by offering volume discounts, point of sale promotions, and personal recommendations by the sales person (up-selling/cross selling). Keeping a variety of products and having all the sizes available also contributes in increasing the average ticket size.
Merchants also need to keep tabs on conversion. Wouldnt it be great if you could earn more revenue without incurring additional promotional and advertising costs? Conversion optimization is a great way of achieving that. Analyzing the elements that influence a visitors purchase decision and taking steps to make sure that all their considerations are taken care of is crucial.
Evaluate whether your store layout, product range, promotions and checkout processes are in line with what the customer is expecting. You can do this by collecting first-hand feedback and aligning changes in that direction to ensure superior user experience.
Conversion percentage is calculated as the number of purchases divided by the number of footfalls x 100. "Footfalls" refers to tracking the number of visitors to a store. Whether its the shopping season, a new store location, the new display window design, or that loyalty program that you recently launched, footfalls will provide you with the cognizance of whats working and what needs to be improved. Once you know your footfalls, its important to track whether these are generating dollars for your business.
On the cost side, inventory management is a key metricand is often part of new tablet-based point of sale systems. Theres an opportunity cost for the stock that remains unsold on the shelves. If you have some SKUs that are somewhat high-ticket and taking up valuable display space for weeks or months, consider replacing them with products with more sales. Prior to the recession, small retailers seldom felt the need to achieve efficiency in operations, since sales figures more than made up for such operational inefficiencies. The economic downturn was a wakeup call for small businesses. They realized that they could no longer focus only on their products and customersthey had to pay attention to the "geeky" stuff such as data analytics as well.
Employee management is also part of performance. You might have heard of this earlier: happy employees lead to happy customerswhich means a thriving business. But employee attrition is severely counterproductive to this equation. Recruiting and training a new employee costs huge resources in terms of money and time, though retaining an existing employee is usually much cheaper.
David Bozin is vice president of growth development at Bindo.