The retail and Point of Sale (POS) software market is highly fragmented and has many vendor options. While there are a few large retail software vendors for larger companies, the retail software vendor market in tiers 3, 4, and 5 (See Tier Chart) is dominated by many different smaller vendors that focus on different industries (such as restaurants, retail stores, etc.). While some vendors offer an integrated accounting and POS solution, others offer POS solutions that integrate with some of the more general financial/ERP software systems such as Intuit Quickbooks, Sage MAS 90/500 and Microsoft Dynamics products.
The following are some of the key retail functionality that you should consider as you evaluate retail software solutions.
- Peripheral Hardware – Retail software products have integrated with hardware vendors to provide peripheral POS compatible hardware such as touch screens, printers, bar code scanners, scales, line displays, cash drawers, and magnetic card readers. Some of this hardware will also attach to tablets, and smart phones. These peripheral devices interface with the retail and business systems to offer a completely integrated retail system that eliminate the need to manually enter data from one system to the other.
- Bar Code – Bar codes allow the tracking of inventory from the moment it arrives from suppliers, through the stocking and inventory process and sale of the merchandise. This functionality has revolutionized product and inventory controls in a retail organization. Both internal bar codes and universal UPC codes can be printed and used.
- RFID – Retail software is moving towards the development of wireless technology such as Radio Frequency Identification (RFID). RFID uses intelligent computer chips placed on the tag of a merchandise item which then communicates with a handheld device, such as a tablet, smartphone, other handheld device, or central computer. The benefit of this technology is that inventory stocking and locations can be maintained in real time. The computer can automatically reorder inventory that is low as it has a constant, real-time view of inventory levels. Physical inventory counts become unnecessary as the computer has a view of the entire inventory on hand. Another key advantage is that security is improved as the RFID chip communicates its location in the store. POS registers may eventually become unnecessary, as RFID technology provides the ability to automatically charge a person’s credit card as they pass an RFID scanner with the item they are purchasing.
- Floor Layout Planning – Floor layout planning assists the retailer with the optimization of the layout of the selling floor to increase sales and improve convenience for consumers. An example of this is the placement of smaller, low priced items at the register to induce impulse buying by the consumer while they are waiting to check out.
- Store Opening & End-Day Reporting – This functionality allows sales associates to conduct the steps for sign-in and store opening. It also includes the store closing at the end of the day with the ability to view and print journals from any register by batch and/or receipt number, and run X, Z, and ZZ reports. Retail software maintains transaction history along with an audit trail of voided receipts, date and time changes, etc. Other audit functions are standard reports such as cash receipts balancing, bank reconciliation, and detailed audit reports.
- Time Clock – POS terminals/registers/handheld devices can function as an employee time clock by allowing sales associates to check in and out of the register. The central computer can then identify the sales associate that is operating each register and integrate to the back office general ledger and payroll software.
- Lookup – For customers needing assistance, retail systems offer the ability to lookup items and display the item’s picture, description, location, and price. For retail chains, this lookup capability allows visibility to other stores to direct customers to nearby locations that may hold an item that is out of stock. Inventory searches can be done using “wildcard” information such as partial words, and attributes can be searched such as keyword, color, size, vendor, price, etc.
- Customer Information – Retail software offers visibility of customer information (buying history, payment history, customer contact information, demographics, total sales, number of visits, and last visit date) at the POS terminal/device. This provides more personal service, enables the sales associate to suggest add-on items and sale items, provides volume discounts, and makes it possible to do automatic discounts and deferential pricing for special customers.
- Customer Checkout – POS software customer checkout functionality includes easy data entry via hot keys and shortcut keys, unlimited line item entry, the automatic computation of tax, post voids and process returns. Another great feature is the ability to serve others while keeping a stalled transaction on hold and to continue making transactions should the in-store network go down. Handheld devices such as tablets offer the ability for sales associates to check people out at any location throughout the store.
- Multiple Payment Types – Retail software offers the ability to accept multiple forms of payment like cash, check, credit card, gift certificates, gift vouchers, coupons, government stamps, and store credit accounts. POS software also includes credit card swipe links to online credit authorizations. POS systems allow partial payments of transactions, allocation of a payment to multiple transactions, the processing of deposits on orders, layaways, and in-house credit.
- Receipts – Retail software ensures that each receipt clearly identifies the register to which the receipt is associated. Some products sequentially assign numbers for each receipt. Other products include intelligence with the number such as the register and the year that the transaction occurred. POS systems include the reprinting of receipts, printing of kit components on a receipt, customization of receipts with a promotion for new products and specials.
- Polling – Periodic upload (polling) of each store’s POS system can be set up to allow the headquarters to have a real time view into the operations of the stores and enable management of company wide changes such as sales and promotions. It also enables the headquarters to plan for the chain as a whole including the movement of inventory. Althernatively, if you have implemented a Cloud solution (access the system through the internet) then your data will all be stored at a central location, eliminating the need for polling.
- Inventory – Retail systems enable the visibility of inventory at a single store as well as for the company as a whole including all stores, warehouses, and in-transit inventory. They allow the transfer of inventory between stores and commitments of “Out-of-Stock” inventory with the ability to notify customers upon receipt of merchandise. Serial numbers can be tracked, kitting of multiple products can be sold as one parent product, and consignment inventory can be maintained. Inventory plans are set up to include inventory turn targets by class, determine overrides or exceptions by period, calculate stock to sales amounts, receipt plan and period open to buy amounts, stock-turn review, stock to sales ratios, and markdown planning.
- Commissions – Commissions are unique to every organization. Retail software offers flexibility for the tracking of sales information and commission calculations.
- Merchandise Planning – Merchandise planning helps retailers more accurately track and assemble data to help improve buying, distribution and store operations throughout the year, thereby improving efficiencies, reducing inventory, and increasing sales. This includes budgeting and forecasting for daily, weekly, monthly, and seasonal budgets; assortment planning to deliver the right mix of products and value for targeted customers; merchandise changes to make adjustments such as new classes of product; and seasonal adjustments which allow the retailer to adjust pricing, markdown dollars by period, and plan seasonal sales targets.
- Price Management – Retail systems help retailers manage and optimize item pricing and allow the home office to download any changes to specific stores or across the enterprise. Price management functionality includes: promotional pricing for items with effective dating, giveaways, “Buy X, Get Y” discounts, and program price changes. Retail systems also allow corporate/volume price breaks and tiered pricing discounts based on rules set up and maintained within the system.
- Employee Management – Employee management includes workforce scheduling for each store and the entire sales force. This information can then be used to predict what days and hours to staff up or cut back. The system also tracks the register used by salesclerk, credit items sold to appropriate sales clerks, labor cost, associate selling budgets and the assignment of system security levels for each employee.
- Cooperative Advertising – Cooperative advertising is the ability to track advertising efforts between your organization and trading partners and suppliers. Advertising costs can be shared among multiple companies and retail systems offer the ability to track these agreements and the sharing of these costs.
- Customer Relationship Management – CRM for retail aims at helping retailers understand customer-buying habits and provide better customer information across departments and throughout the organization. CRM can be used to promote marketing and merchandising across channels, provide consistency across all customer contact points, and target valuable customers. CRM provides the capture of customer detail, such as demographics, preferences, purchase history, problem history, account balance, and credit information. It allows the retailer to analyze individual and chain-wide buying trends by region/time of day/season/location, shopping frequency, and purchase amounts. The retailer can then push sales, conduct relationship selling to targeted customers, and focus efforts on selling extended warranties to customers who recently purchased serviceable items.
If you would like a more detailed discussion regarding key functionality for your situation and the retail market, please contact us at (425) 216-4030.