The POS Software Blog

The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

CategoryRetail management advice

Retail theft story: I don’t believe you!

May 30, 2023
2 Min read
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I don’t believe you.

That’s what a retail business owner told us when we told them that employee theft had cost their business more than $100,000 in the previous 12 months.

When we asked who worked four specific shifts each week and who had two weeks off a month prior, they knew we might be on to something.

Prove it.

They trusted their employee, a relative, more than they trusted us. It’s understandable.

So, we proved it. We then went back further in their data and proved that over three years the theft was more than $350,000.

This all started because of what they thought was a bug in our software impacting their business data.

It ended with the police laying charges.

Our POS software collects data that can be analysed to look for patterns of use that could indicate theft behaviour.

In a typical independent retail business, theft costs between 3% and 5% of turnover. Our software backed by our Theft Check service seek to reduce the financial imp[act on the businesses owned and run by our 3,000+ customers.

We are grateful to help independent retailers reduce the cost of theft in their shops.

Helping local small business retailers discover and manage theft situations is just one way we help our retailer community.

Our Australian sales number is 1300 662 957.

Our NZ sales number is 0800 444 367.

We’re not your average POS software company and here are 3 examples why:

  • Dead stock often represents between 5% and 12% of stock on hand in local indie retail businesses. Our software proactively helps retailers identify dead stock and stop making decisions that lead to dead stock.
  • We provide a free theft check service where we look at data patterns that can indicate theft. Our evidence has been used by police, prosecutors and accepted ax expert evidence in court.
  • Copying big retailers is not smart. Our software offers genuinely unique, and successful, ways you can differentiate to nurture deeper baskets per purchase and more frequent return of shoppers.

Sure, we do the usual of scanning products, tracking sales, supplier electronic invoice import, linking to Xero for accounting and linking to Shopify (and more) for online sales. It’s what we do outside the usual where our retailers can leverage real value, like our insights dashboard.

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The most important question every local indie retailer needs to ask themselves regularly: am I making money

May 26, 2023
2 Min read
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I was talking with a retailer the other day and was surprised to discover that they are advised of the profitability of their business twice a year, when their accountant meets with them, and even then, the information relates to a trading period from two or three months prior.

They have no processes in place to track and report profitability more frequently. They are not looking at GP% mix, say, weekly, looking for trends.

Their reasoning is that the accountant is the expert and that as the retailer they do not have the skills to understand the business performance at that level.

Not knowing business profitability at more frequent intervals and close to the actual performance is a problem for any business.

Gross profit is the pot from which the business pays rent, employees, loans and the owners. Not managing that in a timely manner can see a business slip away.

Too often I see local independent retailers get caught in a narrative no one has any money or the economy is really tough or we’re busier than ever or no that doesn’t sell. More than half the time the statements are checked with business data, which is rare in itself, the statements are not supported by the business data.

My point here is that what matters more than anything else about retail business performance is what business data report, your P&L, profitability reports from your POS software, your evidence. Your business data will guide better business decisions. Waiting a month or two for an accountant to provide their take on what they see is too long.

If you own a local retail business you need to be serious about your business data as it sets you up for trading profitably and selling more easily when that time comes.

So, are you making money in your shop?

Seek out that information and establish processes for you to have easy access to the information regularly. If you are not making money, your only option is to make changes in the business. There is never a real barrier to making such changes.

Fixing profitability starts with knowing where you are at.

Footnote: too many local retailers are drawn to gurus and smooth speaking experts when they ought be more locally and practically focussed on their business. Data is a boring topic, but it is the solid foundation on which valuable local small business retail success is built.

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LayBy opportunity for local small business retailers as the federal government is set to regulate buy now pay later

May 22, 2023
3 Min read
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With the federal government set to announce today plans to regulate buy now pay later (BNPL) products under the Credit Act, it could be timely for local independent retailers to pitch LayBy.

The use of LayBy dropped away as BNPL like Afterpay, Zip and others offered shoppers easy access to finance for immediate purchases. While BNPL is used for many products outside the scope of LayBy, I expect the use of LayBy to increase once the BNPL regulations are in place.

While the ACCC defines the LayBy arrangement, LayBy is regulated at the state / territory level. In Victoria, for example, the regulations cover the contract, cancellation, price chan get and more. The level of regulation varies between the states / territories.

In physical stores, the use of BNPL varies by retail channel, but it is a popular payment method, but often expensive to the retailer. Whereas credit card payments today typically cost retailers less than 1%, BNPL payment can cost as much as 6%. The benefit to the retailer is that there is no risk should the shopper default.

The anticipated BNPL regulatory changes give local retailers the opportunity to re-pitch LayBy. But first, we need to ensure our processes are fit for purpose, smooth, understandable, appealing to shoppers and economically viable for us. This is where retail management software like that from us here at Tower Systems comes into play.

Our POS software offers easy and consistent:

  • Structuring of terms and conditions.
  • Managing the appropriate deposit.
  • Setting of different expiry terms for a LayBy based on the products in the LayBy.
  • Tracking payments made by customers.
  • Following up any payments that are missed based on the agreed payment schedule.
  • Tracking where LayBy products are stored.
  • Easy editing of a layBy once commenced – by adding and removing stock.
  • Managing partial collection of items in the LayBy.

This structure is loved by many retailers using the LayBy facilities in our POS software. Some of our customers do thousands of LayBys each year.

Our advice to retailers is to focus on the expectation that all LayBys will be fully paid and collected on time, to consider LayBy as a positive service by the business and opportunity for the customer. Promote it. Welcome its use. Make managing it easy for you and the shopper.

Local retailers can make decisions around offering LayBy that could differentiate their businesses from bigger retailers.

We help our POS software customers with LayBy setup training and advice, so they can offer this payment method in a way that’s backed by consistency and certainty, offering a service that could help them win more shoppers.

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Retail management advice: how to encourage a deeper, more valuable, shopper basket in local independent retail

May 19, 2023
3 Min read
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Every retail business can sell more to every customer. This is easy when you have good business data curated by your POS software and use this to make good business decisions.

Making more money from every sale starts with good POS software for this will show basket depth, allied product opportunities and things to avoid. It’s smart to start with what is real in your business and to leverage this to greater success.

In a many retail businesses, the top ten or so selling items will account for between 30% and 50% of revenue of the business.

Look at the top sellers report in your POS software and concentrate on the top selling items. Answer these questions about the top ten selling items from the last three months:

  1. Do you have appropriate impulse purchase products located on either side of each top item?
  2. Are the top items spread through the store, to maximize customer throughput?
  3. How often do you move the top items?
  4. Do you have the top ten items in multiple locations?
  5. What impulse purchase items do you have at the counter which will appeal to customers who purchase any of the top ten items?
  6. Has the list of top ten sellers changed in the last year? If so, how have they changed and what can you learn from this.
  7. Are there products which you do not currently carry which you could add to the store to sell with the top ten sellers?
  8. Do customers who purchase the top ten sellers ask for any other items?

The idea embedded in these questions is that you use the top ten sellers, or top twenty or top thirty, to focus your attention on items with which you can work to achieve more sales in your business.

By focusing on the top sellers and what you can sell with them you can increase the size of the average shopping basket.

If you can’t see opportunities for achieving more sales by placing products next to or with the top sellers then speak with your team and speak with trusted customers. Don’t rest until you unlock suggestions to try.

If what you try does not work, try more products. I know of retail businesses which have spent months finding add on items to work with their top sellers.

The key to this project is proper use of your Point of Sale software.  You need this to identify the top selling items and to track the success or otherwise of your project to sell more with your top performing stock lines.

There is plenty of additional money to be made from your top sellers. Invest time and attention on this project and get ready to bank the results.

If this all seems simple, it is. We have used this approach successfully in our own shops over many years. We run the shops to give us practical retail experience, so we can better serve our POS software customers.

Tower Systems is not your average POS software company.

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Small business retail advice: Your USP, Unique Selling Proposition, sets you apart, underpins the value shoppers see and feel in your business

May 18, 2023
3 Min read
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In his 1960 book, Reality in Advertising, Rosser Reeves, a respected US advertising executive, introduced the world to the concept of the Unique Selling Proposition, USP for short.

Reeves defined USP in an advertising context:

  1. Each advertisement must make a proposition to the consumer: buy this product and you will get this benefit.
  2. The proposition must be one that the competition either cannot or does not
  3. The proposition must be so strong that it changes consumer behaviour.

In the 1960s and 1970s, the concept of a unique selling proposition evolved from being essential to advertising to being essential in business. Finding your business USP was considered mission critical to businesses, retailers especially. Businesses drifted however and forgot about the importance of a USP.

Jack Trout told us just a few years ago that it was as relevant today. In 2000, he said that a Unique Selling Proposition was mission critical in business in his aptly titled book Differentiate or Die.

Differentiate of Die. There is no doubt about the call to action in the title, no doubt about the consequences of inaction.

Yet many retailers, for the most part, have remained still in the face of an onslaught of competition.

Retail is complex, challenging and changing rapidly today. The differences between competitors fewer. Retailers are surrounded by competition and it grows by the day. Yet many have remained still and done nothing.

Smart retailers are re-acquainting themselves with the writings of Reeves and Trout and leaning about the mission critical imperative of having a Unique Selling Proposition.

Differentiation could be service, products or location or a combination of these. Differentiation will most likely not be price as anyone can match this easily. Price is, after all, the last line of defense in any business battle. That said, there are some major price-focused success stories – Wal-Mart for example. It is rare in an independent retail situation.

To develop your USP, engage with your employees and other stakeholders. Take your time. Determine what you and your business stand for. Following open and honest discussion and debate, the USP around which everyone in the business can willingly congregate will emerge.

A good USP will not require an advertising campaign to communicate. It will become obvious through actions and decisions. By living the USP in every facet of the business you soon become seen as unique by shoppers and this can drive excellent word of mouth and success for the business.

While differentiation in retail is more important today than ever thanks to today’s economic conditions, the approach to the challenge is the same as in the 1960s.

if you are not sure where to start when considering your USB, look at your POS software and the data it curates about your business for in that data will be insights into your points of differences things you can cultivate to have a stronger USP.

Your POS software is a good place to start as your shoppers show you through their behaviour what they like and don’t like about your business.

Tower Systems offers this small business retail management advice because we are retailers too. we use our POS software every day and have done so for many years.

We serve local specialty retailers with locally made and supported POS software created in service of a defined range of retail channels.

Tower Systems is not your average POS software company.

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5 ways retailers can use the POS software from Tower Systems to pitch value to shoppers

May 9, 2023
3 Min read
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Plenty is being written about the economy at the moment and it is negatively impacting consumer confidence. There are things you can do with the Tower Systems POS software to show your business offering value to shoppers, and thereby nurturing more value for you.

And here in this post, value means the value shoppers perceive in dealing with your business. You could also use the term savings.

While value can be about price, it is often not as straightforward as that. Something could cost more but it could last longer or you might get more pieces than if you pay a lower price or there may be some other add-on that drives value.

While our POS software offers many ways retailers can pitch value to shoppers, here are 5 ways retailers can use the POS software from Tower Systems to pitch value to shoppers:

  1. Discount vouchers in Retailer are a perfect way to pitch value. A dollar amount discount is better understood than points. You can set the vouchers up in a way so costs are covered by benefits. Show your shoppers what they can save.
  2. Offer to fund raise for local charities, community groups and clubs. They could give their members a card that gets them, say, a 5% discount off purchasing from you while also earning for the charity a 5% donation. The goal here is to bring new shoppers into your business.
  3. Offering a coffee card type discount of, say, buy 9 and get your 10th free for habit-based purchases, like coffee, pet food, cards, magazines, fertilizer etc. can help nurture shopper stickiness to your business.
  4. Bundling products together into something that only your business offers can pitch a value proposition unique to your business.
  5. Volume pricing, where the cost of an item decreases as the quantity purchased increases, can help shoppers save and you sell more.

Your software offers more ways of pitching value to shoppers than these, and it helps you systemise pitching value. Being consistent about this is key to it working for you.

Consider this list of 5 a starting point, a jumping off point for exploring other ways for your business.

Tower Systems offers business management advice like this to all of its POS software customers, taking the POS software help desk experience beyond the technical and onto the shop floor, to help our local small business retailer customers to themselves get more value from their use of our POS software.

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7 ways retailers can use POS software from Tower Systems to help improve the value of their business

May 8, 2023
3 Min read
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When we talk about the value of a retail business we mean what the business is worth when it comes time to sell, which is dependent on the profitability of the business as reflected in the profit and loss statement.

Value is the key business measure here and while there can be non-monetary value perceived by the owners and other stakeholders, it is the value as seen by others, as through P&L results that is the common measure.

Using POS software from Tower Systems, retailers can drive value. Here are 7 ways they can do that:

  1. Dead stock. In the average indie retail business, dead stock is equal to around 3% of turnover and often around 12% of total current inventory investment. Using our software, it is easy to identify dead stock. That’s the first step to converting it to cash.
  2. Stop running out of stock. Selling out of items that will sell costs the business  money.  In a small retail business we looked at recently, sell-outs cost more than $3,000 in a year, or $1,500 in gross profit, all because of poor re-ordering management. Your Insights Dashboard has this information.
  3. Bloated roster. Some prefer to spend money on people, so they have time to themselves for relaxing, golf or to sit in the back office, where no customer purchases from. We often see a bloat cost equal to around 10% of the roster.
  4. Wrong trading hours. Some stay open too long while others are not open long enough. Either way has a cost to the business.
  5. Being blind to theft. Theft in local indie retail costs on average 3% – 5% of turnover. Our software can help you see it, track it, and mitigate against it.
  6. The wrong product mix. GP% is a key measure of retail business performance. Often, we see retailers chasing transaction volume and not watching and chasing GP%. Growth in business GP% is often more valuable than transaction growth.
  7. Reordering. Ordering based on data reduces mistakes. It’s better, too, than letting a supplier order for you. The software can help you with reordering, so there are fewer mistakes, fewer sell-outs, less dead stock.

This list is incomplete as our POS software can help cultivate value in plenty of other ways. We created this list to provide our customers with a starting point, some low hanging fruit.

We shared the advice with our customers via our regular customer email and our regular print newsletter. This is another example of the proactive approach we take to guiding our customers to achieve more from their use of our POS software.

While, for sure, our help desk answers support questions and helps with technical queries, we often go beyond with business advice that crosses the intersection of the technical; aspects of the software and the use within a retail business of the software to better serve the business and its owners.

7 ways retailers can use POS software from Tower Systems to help improve the value of their business is all about showing our POS software user community ways they software they already have can be used to help cultivate business value.

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Why we don’t claim our POS software is the best POS software

May 5, 2023
2 Min read
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It’s funny seeing POS software companies claim their software is the best. They could not know. We for sure do not know if our Tower Systems retailer POS software is the best PSO software, and here’s why:

Only someone who has used in real life and over some time all the software to which it is compared could really know.

We have not used other POS software. We’;re sure our competitions have not used our software, or other software, too.

A retailer who has used two or three software products could not know how a product they have not used may or may not serve their business.

The thing is, when it comes to POS software marketing, there is too much hype in our view, a lot of businesses saying their software is the best.

It’s why we don’t say our Tower Systems POS software is the best and the same reason we do not say it is perfect for you.

Only you can know what POS software is right for your business.

Here’s what we do know though, as retailers ourselves (currently 3 physical shops and 4 online retail businesses), we know that our POS software is a good fit for our needs, and they are complex needs. As retailers ourselves we use our software every day, at volume, in several specialty niche retail areas.

So, we can certainly speak to our own experience, about how our POS software is serving our needs, and we can show prospective retailers how our POS software works, we can show them in any of our shops. We welcome people to work in the shops and use the software first hand before they make a decision if they want.

We’re not aware of any other Australia POS software companies in our specialty retail; channels who own and run retail. businesses as live labs for testing and enhancing their software and for offering prospective customers a live business in which they can experience the software first hand.

We reckon our Tower Systems Retailer POS software is good. It’s up to you to see if it right for you. We are happy for it to be compared to anything. We welcome such comparison and with co-operate in any way we can to help you do this.

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Advice for local retailers on how to deal with EFTPOS fees

May 3, 2023
5 Min read
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It’s an easy complaint for a retailer to make – my EFTPOS merchant fees are too high, it’s not fair, time for me to consider another supplier or to consider charging customers a surcharge.

Customers hate surcharges, especially if there is another retailer selling what you sell who does not charge a surcharge.

Every method of payment has a cost, including cash. In my experience working with retailers, the cost of cash is higher because of theft. However, it is not easily seen, especially in retail businesses that do not research or teach theft.

Here are some business ideas for addressing the cost of EFTPOS:

  1. Promote cash payment – if you want the costs associated with cash of course.
  2. Be clear as to the cost of using a card. You could apply a surcharge, which I think is a ridiculous idea though.
  3. Price knowing that cards will be used by customers. Build the cost into your pricing model. Keep the bump under 1.5% and it is less likely to be noticed.
  4. Lower a cost elsewhere to cover the cost. Shaving a hour of employee rostered time can save you around $30.00, that’s equal to purchases of $3750.00 on a card – depending on the type of card used.
  5. Increase sales. While you should be focussed on this anyway, increasing sales helps you address the EFTPOS cost and more in the business.

If you are annoyed/upset/angry about EFTPOS fees, I’d like to gently and respectfully suggest you look at parts of your business over which you have control and that offer a better return from your physical and emotional attention. These are things that I regularly see ignored in favour of complaining about someone or something else:

  1. Dead stock. A problem not seen is not a problem to too many. In the average indie retail business, dead stock is equal to at least 3% of turnover.
  2. Stop running out of stock. Manual process for stock reordering, by retailers and suppliers, regularly result in sell-outs, and, therefore, missed sales. Every time that happens it is a cost to the business. In a retail business I looked at recently, the cost of sell-outs was more than $12,000 in a year, or $6,000 in gross profit, all because of poor re-ordering management.
  3. Bloated roster. Some prefer to spend money on people so they have time to themselves for relaxing, golf or to sit in the back office, where no customer purchases from. I often see a bloat cost equal to around 10% of the roster.
  4. Wrong trading hours. Some stay open too long while others are not open long enough. Either way has a cost to the business.
  5. Being blind to theft. Theft in local indie retail costs on average between 3% and 5% of turnover. Not watching for it, tracking it and mitigating against it has a cost to the business.
  6. The wrong product mix. GP% is a key measure of retail business performance. Increasing yours beyond what is traditional for your channel provides you with a buffer. For example, transaction count / sales can decline and you can be okay. Measure GP%. Set a goal. Chase it. The air is cleaner in above average.
  7. Ignorance. No, it’s not bliss. There are insights in your software that can guide better decisions, faster decisions, more financially rewarding decisions. Yet, too many in retail don’t want to know. That failure costs them plenty.

The items on the above list are all on the retailer to address. The benefit is that addressing these results in a stronger, leaner and more valuable retail business.

Adding a surcharge to each EFTPOS transaction is an easy step, but the wrong step in my view as doing that could shield you from more important and valuable business moves you can make.

…

One of us here at Tower Systems ate at a Melbourne restaurant recently while in the city for the Comedy Festival. The bill was $195.00. They only took payment by card. They presented the EFTPOS terminal. After navigating the tip screen on the EFTPOS terminal a message appeared: If you proceed a surcharge may apply. There was no option but to proceed. The surcharge was $2.14.

What was annoying was that paying by card was the only option and that they control the prices of what they sell.

Maybe we are ignorant about restaurant management but this place could have charged 10% more on each item and not charged a surcharge and customers would be happier than with them now. In fact, customers would probably have been more likely to return than now.

We think EFTPOS fee question is more one about acting on what we can change rather than what we cannot change.

We worry too much about price in local indie retail. A retailers we know selling a range of products widely available increased their price by 10%. Unit sales continued on their upward trajectory. This business now makes more GP from each item sold. The owner does a back of the envelope calculation about the value and tips the additional GP into a bucket, a buffer if you like, for when they see something not going their way.

…

In the Tower Systems POS software you have facilities for addressing the 7 points listed above. If you’d like help navigating these, please reach out.

We are keen for you to maximise value from your Tower software.

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POS software EFTPOS machine options that help small business retailers save money

April 18, 2023
3 Min read
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A modest Aussie gift shop was paying more than $9,000 a year for their POS software from a US company by way of EFTPOS fees. They went with the company because the software was free.

It was only when they needed the software to do something that it did not do that they started looking around.

The owners of this awesome local gift shop were shocked to discover that switching to us cut their POS software and EFTPOS costs in half. It was a bonus that our software had the additional facilities they were seeking.

The cost of ownership of POS software is something retailers need to consider if they are required to use EFTPOS services provided by their tech company.

There may be circumstances where it works well operationally and financially. There will be other circumstances where it does not.

This is why we say to local small business retailers, do your research, be sure you understand the total cost of ownership. What is pitched as FREE is unlikely to be free as every company needs to make money.

EFTPOS machines connected to POS software are a valuable tool. Partnering with a POS software company that connects with multiple EFTPOS machines offers the retailer choice and from choice flows competitive opportunity.

Tower Systems connects with multiple different EFTPOS machines through its POS software. retailers choose what is right for them. The company has offers available, retailers are also welcome to choose their own. The key is to make an informed decision about what is right for the business.

And, thanks to smart POS software EFTPOS machine integrations, charging a surcharge can be done, mistakes are reduced, end of shift reconciliation is easier and handing EFTPOS transaction queries is managed with ease. The EFTPOS machine POS software integrations from Tower Systems serve many different retail channel requirements.

The key, though, is retailer choice.

As our gift shop customer found, the saving could be worth thousands of dollars to the bottom line of the business. “Who’d have thought that something promoted as free cost more than something not wormed as free”, the gift shop owner commented to us after making the shift and experiencing the significantly lower operating cost.

We own and run retail shops ourselves, where we use our own software. We see first hand the value of getting a core cost such as EFTPOS fees right for the business. We know that smart retailers appreciate choice. That’s what we offer a Tower Systems, choice.

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Retail business cash flow advice: using POS software to improve your position

March 29, 2023
2 Min read
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Every day in local small business retail it is vital to focus on cash flow, vital to know where you are at, how you are tracking and what you are doing to maximise your position.

Poor cash flow = poor business performance and rocky roads ahead.

Too often, local small business retailers leave tracking business cash flow to accountants and others who may not be in the business on a day to day basis.

Managing cash flow in local small business retail is a day to day task.

Using the smart POS software from Tower Systems you have access to tools and facilities that help you navigate to a better cash flow performance for the retail business. You don’t need to be an accountant or someone with good financial skills. What do you need to be is an engaged retailer.

In our POS software we help you:

  • Make better business decisions. Decisions like inventory purchasing, shop floor placement, trading hours, loyalty rewards and more.
  • Identity poor performing inventory. Knowing what is not working can stop you reporting that mistake.
  • Knowing when you are likely to sell out. Many retail businesses bmiss absolutely for certain revenue by not having in stock inventory when shoppers wish to purchase.
  • Do more business with more valuable suppliers. Tracking suppliers by financial benefit helps you make more money with and from them./
  • Motivate employees. Employees can make better decisions for your business if you empower them with knowledge.
  • Calibrate business settings to benefit cash flow. When you open and close, who you roster, when you discount, when you price inventory at a higher price … these are all decisions that can be informed by data collected and curated by smart POS software.

These are just some of the ways the Tower Systems POS software can help a local small business retailer improve their cash flow position.

The real benefit when it comes to cash flow and our POS software is the business insights and advice we can provide to those interested. We have hands on retail experience and we will gladly engage this with and for any retailer in our community keen to improve their position, including their cash flow position. We will talk with and work with, one-on-one, with any retailer in our community to help them.

We’re a full service POS software company helping thousands of retailers, and we love it, every day!

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5 ways small business retailers can deal with high EFTPOS fees

March 27, 2023
3 Min read
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EFTPOS fees are a cost in retail since you pay your EFTPOS provider, often your bank, a fee for every transaction paid for by a card.

These EFTPOS fees tend to frustrate retailers, especially small business retailers. They eat into revenue, and they impact profitability. This is especially true for the cards that deliver a higher frequent flyer or similar points value to the shopper. Where the shopper benefits the retailer carries the cost.

While retailers can add a fee to any transaction that includes EFTPOS costs, to cover the costs for the business, in this small business retail advice from us today we share 5 ways small business retailers can deal with high EFTPOS fees. This is actionable advice regardless of the POS software you run. It’s based on years of retail experience and in the belief that the best success we can drive for ourselves in local small business retail is that built on a series of reliable small steps, rather than one big step.

Here are our 5 ways small business retailers can deal with high EFTPOS fees

  • Price creep. Look at her you price items. Consider shopper psychology. Consider what people will pay for items. Consider your loyalty program and the value you give back to your shoppers. Often times, considering these factors, retailers can find some modest price increases they can achieve to bank margin that pays for EFTPOS.
  • Grow the basket. Look at your shop and counter configuration. Ensure that you are doing everything possible to guide shoppers to add more to their basket than planned for that visit. Each time you help a shopper spend more than intended is margin dollars you are backing to pay for EFTPOS fees.
  • Bring shoppers back more often. Run a limed based loyalty offer where benefits expire in a few weeks. Give them a reason to come back sooner, more often than they might otherwise come back.
  • Buy better. Embrace settlement discounts where you can. never pass on a discount you receive to shoppers through lower prices. Use data collected and curated by your POS software to spend less on slower turning items and more on faster turning items. The faster the turn the more value you achieve.
  • Review your roster. Next to occupancy cost is the cost of labour in local small business retail. Either trim the roster to reduce costs or reconfigure how labour is used to derive more value for the business.

In making these suggestions we are encouraging local small business retailers to be more active in business decisions, to take a broader view in an effort to reduce any pain felt because of EFTPOS fees.

Sure, it is easy to complain about the EFTPOS fees and look for a cheaper bank – and that may provide relief. More valuable longer term relief will come from better business management and this can be driven by deeper engagement with your POS software.

It is important that you understand the total cost of EFTPOS fees. Sometimes costs can be hidden. For example, it may be that you get a terminal for free and a promise that all fees are surcharged to shoppers, but that may have a business cost, turning off shoppers who do not like surcharged added at the point of sale.

Here at Tower Systems we make POS software for local small business retail, specialty retail. We back this with personal service designed to help retailers deal with the every day, like EFTPOS fees.

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Here’s an easy local small business retailers can better connect with their community

March 24, 2023
3 Min read
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Community connection is vital in local small business retail, authentic community connection at a level that is loved by folks in the community.

Back in the day, sponsoring a local sports club, donating prizes for a raffle or helping the local Rotary or Lions were the go to ideas for retailers. And while those ideas continue today, there are another local small business retailers can engage in providing community support that is funded buy the community itself.

Through our loyalty tools and, in particular the discount voucher tech we offer, local small business retailers can reward shoppers and they can offer in store a way for these shoppers to pay it forward, to support a local charity or community group organisation.

The Grill’d burger chain was an early adopter of something similar with their bottle caps and giving customers the caps to vote for one of three local charities the store would donate cash to.

Our suggestion is to invite shoppers to donate their discount voucher to one of several local charities in your business, which you could have every month or so, accruing the value of the vouchers for a gift card donation to the charity, or you making a cash donation of a portion of the voucher value to the charity.

It pitched well this could see people who support the local charity shopping with you so that funds are raised for the charity.

We know form years of data that around 20% of all vouchers handed out to shoppers are used by those shoppers within 28 days. This means there are other vouchers that expire unused. A nuanced campaign in-store connected with loved local charities and community groups could drive engagement, do good in the community and show the business as community connected in a fresh and loved way. That is the goal here.

Of course, the execution will be different in each location. Our job as a tech company is to provide opportunity. Our job as retailers ourselves is to share what we have seen work well, and what we have learned.

Your job as a local small business retailer is to make decisions that are right for you and your situation.

Using the discount vouchers generated by the software in this way, to support loved local community groups and charities, could be the reset you want, the engagement driver the business needs. The beauty of it is that it is low cost, self funding and truly community focussed.

We are grateful to the feedback from our customers and this has guided our own activity in this space of local community group connection.

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6 best-value insights that will benefit any local small business retailer

March 22, 2023
5 Min read
6

Retailers in local small business shops can feel alone sometimes when working on their business. They can sometimes get lost in a cave of thoughts without seeing a way out.

We thought about this and considered the thousands of different retailers in our POS software user community, and we developed the Insights Dashboard in our POS software, to deliver easy access to local small business retail insights that any retailer could leverage, regardless of size, location, specialty area or setting.

We wanted to ensure that what we delivered would be useful regardless of level of business management literacy and financial management literacy. We wanted to deliver the insights without the retailer having to seek them out. We wanted to genuinely add value to what a local small business retailer could gain from using our POS software.

So, via the Insights Dashboard in our POS software, we provide insights in six broad areas – with the insights delivered visually.

Where Are We Today 

Gives you a snapshot of the overall sales & liabilities as it stands today.
 
You can access additional options by clicking the … symbol next to Todays Sales.
  1. Date Range – Expand the sales period covered by changing the start & end dates.
  2. All Locations – Multi-store locations can use this option to include/exclude other locations from the sales figures.
  3. Show Gross Profit Values – This option will show / hide GP values in the Daily Sales Dashboard, which you can access from the Point of Sale screen by pressing [Ctrl] + [D] on your keyboard.

What’s Not Selling 

This gives you a visual understanding of what is not performing in your business.  Deadstock in any business is lost cash.  This report gives you the ability to make decisions on this underperforming stock whether it be discounting or other stock reductions strategies to unlock this lost cash.  
 
You can click any stock item listed to show a graph of sales of that item broken down by month.
There are a number of options available to filter the stock items that appear in the list:
  1. Date Range – Limits the list to stock that has not sold in the amount of time specified.
  2. Listing Bottom – Maximum number of items to list.
  3. Rank By – Determines the order that items appear on the list in.
Click the … symbol for additional options:
  1. Departments – Select between showing stock from all departments or tick the desired departments from the list.
  2. Suppliers – Select between showing stock from all suppliers or tick the desired suppliers from the list.
  3. Exclude Recently Added Items – Exclude stock items that were added to your system inside the time period chosen in the drop down box.

What Am I Missing Out On 

This give you a list of items that have sold out and potential missed opportunity. The visual sales history will assist in ensuring the right items are restocked to ensure future revenue is not missed out on.
 
You can click any stock item listed to show a graph of sales of that item broken down by month.
There are a number of options available to filter the stock items that appear in the list:
  1. Date Range – Limits the list to stock that has sold more recently than the amount of time specified.
  2. Listing Bottom – Maximum number of items to list.
Click the … symbol for additional options:
  1. Departments – Select between showing stock from all departments or tick the desired departments from the list.
  2. Suppliers – Select between showing stock from all suppliers or tick the desired suppliers from the list.
  3. Exclude Recently Added Items – Exclude stock items that were added to your system inside the time period chosen in the drop down box.

What Sells With What 

This gives you an insight to consumer basket analysis. Through this you will see exactly what stock items sell with other stock items and from this you will be able to leverage upsell opportunities, co-location and promotion opportunities.   This also shows the sold alone percentage so you can see item upsell efficiency.
 
You can change the period of time in the Date Range to limit the data to the period chosen. The ten items displayed are the ten best selling items by quantity for the selected time period.

Is Theft An Issue 

This provides a in-depth visual overview of all the retailer audit log records by reason, number of occurrences by time day. This will assist in identifying staff theft/training issues that may need to be addressed within the business.
 
You can change the date range to limit the data to the time period chosen. Changing the time increment alters the lengths of time each day is broken up into.
You can view more complete records by using the Audit Log directly. Please contact Tower Support for help using the audit log.

When Are We Busiest & Quietest 

This is a visual overview used to detect any quiet or peak times in your business by displaying over the week as well as detailed by hour.
 
You can change the week ending date to see data from other weeks. Next to chart value type, you can choose to measure by sales value or number of sales.The top graph shows sales broken down by day of the week. You can change the type of graph used to display this data by clicking the diagram type in the bottom-right. The bottom graph shows sales broken down by time of day. You can change the type of graph used to display this data clicking the diagram type in the bottom-right. You can also view this data as a table by clicking the table symbol in the top-right.
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Tips on common pitfalls retailers make when having websites developed for their businesses

March 15, 2023
3 Min read
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Too many local small business retailers make common mistakes when having websites developed for their businesses. We see this often when called in to fix issues with a website created elsewhere. Our web dev team provides a thorough honest assessment of websites and lays out a pathway to a better solution for the customer.

It surprises us to see some awful websites, built on plenty of mistakes that stem from poor outlines of requirements.

For what it’s worth, here are the top 7 mistakes we have seen retailers make when setting up a website for their business.

  • Not knowing the target customer. The target customer for a website connected to any shop should not be considered to be the person walking through the r=front door. rather, it should be the person you want to reach, the person who would never walk past your shop. Knowing who they are, where they are and what they could be looking for is key.
  • Making the website a copy of the physical shop. If you copy what you sell in your shop online you are not likely to find new customers and the best website for a shop is one that finds new customers for the business. Nice is best. Niche is appealing and easily found through online searching. Stand for something – not not everything you currently sell.
  • Thinking it is easy and once the site is live you are done. Creating and maintaining a website is hard work, relentless work. Think of a website and a hungry beast, and you have to feed it.
  • Believing a web developer knows what is best for your business. Web developers are not retailers. They may have opinions about what looks good or works well, but do these opinions match the needs of your business. It is best to find a web development who genuine understand your type of business and what you want to achieve online.
  • Failing to understand the total cost of ownership. Paying for a website to be developed is on thing. What is the cost of maintaining it. be sure to have this documented before you begin because once you are into it you are on the hook for future costs. Knowing this upfront is key.
  • Different is good. Too many retailers are lazy, loading images and product descriptions from suppliers. Search engines see this duplication and mark sites down that copy others in terms of content. The more of your own content the absolute better for you and for your business. Sure, this is hard work, but it pays off.
  • Your website is not a destination. Okay, it is a destination for online shoppers, hopefully. But, it is not your online end point. The website will have to evolve and, eventually, be replaced. Go into it knowing it will not be your final online presence, that it is, rather, a stepping stone on a pathway.

Take your time to figure out what you want, but not too long as what you launch will quickly change as change is critical in retail business websites.

Footnote: we know about this because we  have created plenty of websites for our retail businesses and for hundreds of our retail POS software customers. The most useful ones have been those that failed. The successes are terrific. But it’s the failures that are educational.

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Tower Systems helps independent retailers to expand and find new shopper traffic

March 2, 2023
4 Min read
T

Efficiency is the name of the game in local independent retail today.

Efficiency of retail space. Efficiency of inventory investment.l Efficiency of tech infrastructure. Efficiency of labour.

While specialisation is important in retail, finding allied specialty areas that expand the appeal of your business is important today, as that can address efficiency opportunities like those noted above. Through our POS software we help with this and through our business management support and advice we can reveal allied product and category reach opportunities.

We are grateful to help local independent retailers with this. We use the data we can access and share this with retailers.

In the big retail, mass retail, spaces we see fresh examples of expanding into new product categories.

Two stories in recent days reinforce the extent of change in retail and remind all of us in local indie retail to consider change as well.

Bunnings announced the addition of 1,000 pet related lines.

Bunnings gears up to be dog’s best friend with expanded pet range
Emma Koehn

Hardware giant Bunnings is hoping shoppers will add dog food and toys to their shopping lists when heading in store as the retailer launches a significant expansion of its pet merchandise business.

Bunnings will throw down a competitive challenge to specialty pet retailers, which have boomed since the COVID era, when it expands its range from a couple of hundred items to close to 1000 products from late March.

This is a smart move because the majority of pet related purchases are habit based and habit based shoppers are tremendously valuable. Their regular shop is valuable in the context of what else a business operates.

It’s kind of I told you so but around 5 or 6 years ago we suggested the pet category to another retail channel.

The other move in by Chemist Warehouse, into optical.

Chemist Warehouse and Peter Larsen join forces to ‘disrupt’ optometry industry

MYLES HUME
February 15, 2023, 3:18 pm 847

The first store in Melbourne is the start of a mass rollout to take place in the coming years.
Australian pharmacy retailer Chemist Warehouse has entered the optometry market, opening its first store in the Melbourne suburb of Malvern and appointing prominent industry figure Mr Peter Larsen as its managing director.

On 15 February, Optometrist Warehouse announced it had opened its first location at 120 Glenferrie Road, with plans to “disrupt the industry” in the coming years.

“Initial expansion plans include the opening of a handful of stores in 2023, followed by a mass network rollout which will see Optometrist Warehouse become a household name and the go-to optometry service provider within the Australian market,” a press release stated.

We noticed the Chemist Warehouse move as one of their first locations is two doors from one of our shops.

These are thought out moves, designed to reach new shoppers, to strengthen existing, well-established, businesses. In each case they target product / service categories served by vertical businesses, specialty businesses focussed only on these niches. It’s those narrow-focussed businesses that are at risk.

This is why we think it is vital that any local indie retail business draws shoppers for many different reasons, and not just the usual 3 or for product or service categories that we see are typical in a newsagency business.

So, our question today is what moves are you making to attract new shoppers? You have to have made or be making moves because you need new shoppers, especially new shoppers who would not usually shop your shop.

It’s not too late. There are plenty of opportunities. The moves by Bunnings and Chemist Warehouse should wake some local retailers up, and help them see the opportunities out there.

Retail is changing in 2023 at a faster pace than in recent years. We need to change.

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How we help retailers deal with increased rent and other occupancy costs

March 1, 2023
2 Min read
H

Retail occupancy costs are on the rise and try as retailers might to negotiate them down, in this property marketplace it is challenging to achieve the level of reduction or management that you may want.

This is why it is valuable to leverage your POS software to help you better deal with an increase in rent, an increase in occupancy costs.

In our Tower Systems POS software and in the training, advice and support that we produce our small business retailer customers, we help deal with the matter of retail occupancy cost.

We do this by helping the retailers buy better, turn inventory faster, drive more value from each shopper visit and manage business overheads, such as labour costs, more efficiently for the business.

Combined, following the advice and using the support that we offer, retailers can position themselves better for rising occupancy costs.

The occupancy cost of a business is the combination of all costs associated with leasing retail space. It includes the actual lease cost plus all outgoings plus GST. GST is included because of how the occupancy cost calculation us used, as a percentage of revenue, including GST.

Occupancy cost is typically the top one or two operating costs for an average local retail business outside of inventory cost. Labour being the other top cost.

Recommended Occupancy cost benchmark: between 9% and 11% of revenue where revenue is product revenue. This can vary by business type.

Explanation. The 9% to 11% suggested band is based on the margin we see as common in local retail businesses businesses.

Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation. However, the 9% to 11% band is recommended.

It is vital to the health of any retail business to manage the lowest possible occupancy cost. It is for this reason we recommend a low and viable base rent and a fair annual increase.

So, managing the business to pursue efficiency in inventory, space and labour usage is key. This is where our Tower Systems POS software can and does help thanks to the business training and the practical retail business support that we provide.

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Small business retail advice: beware the payment redirection scam

February 27, 2023
3 Min read
S

The emails of one of our customers was recently hacked on their business computer.

The hacker saw that we had quoted of supplying a new laptop a month ago. The hacker pretended to be us in an email to our customer and convinced the them to direct deposit money into a bank account they provided.

We only heard about it weeks after the deposit, when our customer contacted us asking where the laptop was. By then, the money, and the hacker, were long gone.

Hackers are sophisticated and clever. They make themselves look legitimate for people uncurious about emails and calls they receive.

In this instance, there were 3 indicators in the email from the hacker that it was a hack, 3 indicators we saw the moment we saw the email they had sent to our customer:

  1. The email named one of our staff members but had a dodo mail email address clearly visible.
  2. The grammar was poor – much worse than our usual typos (sorry for them). For example: all program has been loaded as well. The singular program is the giveaway here.
  3. We never ask for direct bank deposit by email.Our customers can shop with us online through a secure platform, or we issue an official invoice with payment details. Our invoices have a secure payment link.

What happened to our customer was what is called a payment redirection scam. We have provided our customers with advice on reasonable steps they could take to pursue what has happened to them, even though the chances now of resolution are slim.

For more, read about the payment redirection scam: https://asic.gov.au/about-asic/news-centre/news-items/asic-warns-small-businesses-to-be-vigilant-about-payment-redirection-scams/

While the advice from the ASIC and other government agencies is straightforward, it comes down to being vigilant, careful and questioning, especially before you part with any money.

For our customer, the hack was before they received the email. It could have been days or weeks before. Protecting against this involves the most basic of care – clicking only on links you absolutely trust and being careful as to the websites you visit from the business computers.

The Australian Cyber Security centre run by the Australian Signals Directorate offers excellent advice on protection against email hacks. We share this link with our customers as they are the experts. It’s best to share government provided expert advice rather than write our own. This way we are sure the advice is current and best practice. We particularly like:

  • Consider introducing an approval process for requests that ask to change payment details or make a large transfer.

  • Verify any such requests by calling the sender. Call them on a known and verified phone number (not a phone number from the email, as this could be operated by a cybercriminal). Speak with the sender over the phone to verbally confirm the request or change.

  • Ensure workers have clear guidance to verify account details and to think critically before actioning unusual requests.

  • Have a reporting process to report threatening demands for immediate action, pressure for secrecy or requests to circumvent protective business processes.

In terms of what we do at Tower Systems, we never ask our customers to transact with us insecurely. Payment is always through a secure platform, a trusted platform that protects our customers and protects us.

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Retail management advice: make every day your payday

February 20, 2023
3 Min read
R

Too often we see retailers running their businesses with the belief that they will make their money when they sell their business. These folks tend to bot worry about the day to day as much.

It’s a mistake.

For years, we have written that retailers need to make every day their payday.

This is an important message as it focuses on the goal of driving business value. Too often, we see retailers working about, being focussed on, the wrong things, things that do not directly affect business value.

Make every day your payday.

It is a simple mantra that is worth repeating daily. It should guide every decision. Does this, or that, add value to the business. It it does hot, why do it?

There was a time when small business retailers could rely on selling their business for a handsome increase on the price they paid thereby providing a good pay day, when businesses sold for a good multiple of net earnings.

No more. Today, the best way to extract value from our businesses is to make every day your pay day, to not rely on your pay day being the day you sell the business. In fact, the typical shop today will sell for somewhere between 1.5 and 2 times actual net profit as shown in the business P&L.

The P&L matters as this is what you need to be guided by in all business decisions and actions.

The challenge is how do you do this?

Retailers need to look at their businesses differently. This starts with the mindset of every day being your pay day. Each decision needs to be considered in this context, in the context of the P&L impact.

Focusing on profit today will give you a better result today and make your business more valuable tomorrow.

Here are some suggestions for making every day your pay day:

  1. Run with the leanest roster possible. Just about every retail business we review has capacity to lower labour costs.
  2. Ensure you can sell when the business is closed. Yes, this means sell online.
  3. Promote the business outside your usual foot traffic area … increase your customer base.
  4. Promote your business outside the brand people know you as. or example, online pitch under a brand other than your shop brand.
  5. Have your best people working the floor, helping customers spend more.
  6. Have stunning displays that attract people from outside the shop.
  7. Have compelling displays in-store that encourage people to browse beyond their destination purchase.
  8. Always have impulse offers at high traffic locations.
  9. Charge more every time you can. Loyalty programs such as discount vouchers, bundling into hampers, multi buys such as 2 for 3 and other opportunities enable you to do this by blocking price comparison.
  10. Buy as best you can.
  11. take settlement discounts every time you are able.
  12. Measure product category performance by gross profit. Quit the categories that are not paying for themselves.
  13. Promote outside your store using online and social media opportunities.
  14. Leverage adjacency information. Chase a deeper basket – people purchasing more each visit.

Be responsible for the profitability of your business. Don’t blame your suppliers, your landlord, your employees or some other external factor … it all comes down to you – the decisions you make and the actions you take.

If you relentlessly pursue profit with a clear focus you are likely to see profit grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.

Doing all this relies on your measuring the performance of your business. The Tower software helps with this. It is easy.

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Checklist for anyone considering buying a retail business

February 19, 2023
3 Min read
C

We are grateful to work with many people before they buy a retail business. Over the years, we have curated advice for buyers. Recently, we have seen an increase in acquisitions. here’s our fresh advice:

Local retail businesses  are appealing, and, looking out in the market, there are some excellent opportunities.

A common question we are asked by people who find me through this blog is what should I ask for when looking at buying a shop?

The question itself, when asked, indicates how green a prospective purchaser is when it comes to purchasing a business. Our first advice is that they better understand the retail business of today, to understand what they could be buying into.

Here is an updated list of data we suggest prospective local retail business purchasers access from the vendor or their representative:

  1. P&L from the accountant for the last two years. i.e. not a spreadsheet created for the purpose.
  2. A list of add-backs used to achieve a profit figure on which the asking price is based.
  3. Tax returns for the same two years. While note always appropriate given business structures, they can provide a cross check with the accountant P&L.
  4. Sales data reports, for the last two years, from the POS software in use – to verify the income claim. This source data is key.
  5. Sales data reports from the other sources to verify the income claim.
  6. BAS forms to confirm data in the P&L.
  7. A list of all inventory in the business including the purchase price and date last sold for each item. And, copies of invoices from which you can randomly select to verify.
  8. A copy of the shop lease.
  9. A copy of any leases the vendor expects you to take on board.
  10. A list of all forward orders placed on behalf of the business.
  11. A list of all employees: name, hourly rate, nature of employment, start date, accrued leave and accrued long service leave.

This is good basic information, a starting point, which will enable any purchaser to undertake reasonable assessment of a business.

Our advice to retailers looking to sell who may be concerned about this list is: think about it now and focus on your business so the data we have listed looks good. The time to prepare your shop for sale is every day you are in the business.

This is why we say every day is your pay day. Run a smart, lean and profit focused business and you will have a good pay day today and a good one when you come to sell.

The most appealing businesses are those that are easier to run and are making money.

Sure a purchaser can turn a business around. They should get the rewards if they are expected to do that for your business.

The price you can sell your business for will be based on what it is making now.

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2 minute read: map your shop layout by GP contribution and see your business differently

February 13, 2023
2 Min read
2

A few minutes spent analysing space allocation performance could reveal opportunities to embrace.

With retail space usually costing between 11% and 15% of (non agency) revenue, it is usually the next highest cost outside of the cost of stock itself.

Retailers often argue that rent should be lower. It could be that a different view of shop floor performance helps you achieve a better return.

  1. Take a blank sheet of paper, ideally A3, and roughly sketch out the layout of your shop, marking in display units, shelving, the counter – everywhere you have product. Include your back room if you have stock there.
  2. Colour-shade the layout by department.
  3. List the departments on the side of the floor plan.
  4. Calculate the percentage of total space used for each department. This does not need to be accurate to two decimal places. List this next to each department you have listed.
  5. Use your POS software to report on gross profit dollars earned by each department over the last year, or calculate it from sales figures knowing the average GP% per department.
  6. Calculate the percentage of total gross profit contribution earned by each department and list this next to the floor space allocated to each department – on the floor plan map you have done.
  7. Circle in green those performing the best, where the GP% contribution is more than the GP% space allocation, and in red those performing the worst.

Typically, a business owner doing this for the first time will have an ah ha moment, seeing something they had not realised. 

We have seen business owners make changes including to floor layout, quitting suppliers and increasing stock weight for some departments.

You can take the analysis a step further by looking only at one department and

analysing performance by category, using the method outlined above.

Our specialty retail POS software can help with this and more business performance analysis.

Our goal is to help you run a more appealing, successful and valuable retail business. As retailers ourselves, we use our software this way every day.

We can help if you are interested.

Find out more:

Thanks for reading.

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