Let’s face it, no-one likes long line-ups. In fact, a slow checkout process is almost guaranteed to result in frustrated shoppers, poor customer satisfaction, and a whole lot of lost sales in the process.
So, while the brick-and-mortar checkout experience has long since evolved from the standard cash register, shopper expectations have also risen along with it. Used to the convenience that e-commerce provides, today’s retail shoppers expect a similarly fast and easy checkout experience.
That’s why we’ve put together the following tips to help you speed up your in-store checkout. Keep reading to find out how you can provide a frictionless experience that will keep your shoppers smiling while you ring in more sales!
1) Accept different payment methods
Nowadays, shoppers pay with a lot more than just cash or card. That’s why accommodating different payment methods can go a long way in reducing lineups and speeding up the checkout process. In fact, the more payment options you accommodate, the easier it is for shoppers to check out efficiently.
To speed up your checkout process, consider enabling the payment types below.
Contactless Payments: Contactless payments are a faster alternative to chip and pin transactions. In fact, tap-and-pay technology has been adopted by many major credit card companies – becoming a popular payment option for in-store shoppers.
Expert Tip! Check your processing contract to see if you are liable for any chargebacks on contactless payments. While the increase in speed may still be worth the risk of possible chargebacks, you will want to minimize your exposure by encouraging the use of digital wallets (Apple Pay, Google Pay, etc.) which have secondary authentication. You can also consider having CCTV coverage in your checkout area to deter would-be fraudulent shoppers.
2) Offer a buy online pickup in-store (BOPIS) option
And what better way to provide immediate shopper convenience than a BOPIS option? After all, a great deal of retail continues to happen in nearby physical stores as shoppers are looking for something for immediate usage and they can’t wait for delivery. BOPIS solves several problems that have increasingly discouraged today’s customers from shopping in-store by:
Optimizing the customer experience by ensuring that shoppers are never disappointed (e.g. products are out of stock) when they get to the store.
Saving shoppers time when they are in the store – everything is already ready for pick-up. Retailers can streamline the process even further by dedicating certain checkout lines and POS stations to BOPIS shoppers. Don’t forget to merchandise around these areas with high-margin “snackable” products to capture any last minute impulse purchases!
At the same time, BOPIS also boosts sales and profitability for merchants by improving cashflow with prepaid orders, encouraging more impulse buys in-store, reducing overall delivery costs and minimizing returns compared to e-commerce.
It’s important to remember that BOPIS is most effective when used with a retail POS that can handle “unified commerce” as real-time stock levels are key to product availability. Unified commerce is just another way of saying a total retail management platform that offers a single view of inventory, sales, and customer data across an entire business in real time. As expected, the need for real-time data grows as sales volume and transaction complexity increases.
3) Upgrade to a line-busting POS
Perhaps the most important decision you can make to speed up your checkout process is to choose the right POS system. With so many different options out there on the market, it’s best to choose a POS that is designed for checkout speed. Particularly, look out for the following features in your POS software:
Cross-platform capabilities that let you turn any device into a station. You’ll want to ensure that your POS is mobile-friendly and that it can be run from any device. This will allow you to ring in sales from anywhere in your store when lineups get too long. Which means you can speed up the checkout process for your shoppers based on real-time demand.
Easy to navigate salescreen. Look for a POS software that is user friendly and designed for minimum clicks. Ideally, cashiers shouldn’t have to leave the salescreen in order to complete a transaction.
Fast barcode scanning. To ensure a fast checkout process, it’s necessary to choose a POS system that is designed for fast scanning speed. It’s also important that your POS software can handle multiple barcodes per SKU.
Advanced inventory search. In addition to the features mentioned above, your retail POS needs to have smart search functions and the ability to quickly recall your last search. This will give you and your employees the ability to search products by keyword, description, or tag in case labels fall off or barcodes are not scannable.
4) Train your staff effectively
Having the right POS technology and hardware in place is not enough. Retailers need to consider the people who are actually operating the technology a.k.a their sales associates!
Staff are a crucial part of checkout optimization. Which is why store owners must devote the time and resources to adequately train them. To make things easier, think about adopting a POS system with built-in training tools. This will boost employee productivity and encourage self-service while significantly reducing training costs and time.
5) Email Receipts
While digital receipts are environmentally friendly, they’re also useful in cutting checkout lines. For one, shoppers won’t have to wait for their receipt to print out. And your employees won’t have to waste time refilling the receipt printer – risking the chance of aggravating customers who are already waiting in line.
In addition to streamlining the checkout process, digital receipts also come with significant business benefits, including:
Giving retailers an easier way to build email lists and gather customer data
Helping reduce fraudulent returns
Decreasing overhead costs by eliminating printed receipts
Driving future interaction when you include links to the store website and social media
Allowing retailers to include personalized marketing message on receipts boosting customer satisfaction and loyalty
Expert Tip! Privacy is an increasingly important customer expectation. If you are collecting email lists, make sure that your POS system gives you the ability to legally collect consent for marketing directly from your customers.
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Every store owner knows that cash is king in retail. For obvious reasons, good cash flow management allows retailers to survive and thrive. It gives them the ability to purchase stock at the right time, negotiate better payment terms, deal with an emergency, hire more engaged employees, improve store merchandising, and generally reinvest back into the business.
But due to the complexities associated with running a retail store (inventory, seasonality, competitive promotions, etc.) unexpected costs can arise – and when this happens, many retailers find themselves in a cash crunch. A cash crunch can be defined as a situation in which a business does not have enough money to operate efficiently.
If you find yourself in this position, don’t panic. Below are some steps you can take to get back on track and free up cash in your retail business!
What is cash flow?
Cash flow refers to the money going in and out of a business. For a retail store, cash inflows (incoming money) include product sales while cash outflows (or expenses) consist of payroll, marketing, inventory, rent, operating expenses, etc.
If you have more money coming in than out, then your business has a positive cash flow. If the opposite is true and you have more money going out than coming in, that means you have a negative cash flow.
It’s important to remember that a business’ cash flow should not be confused with profit – cash flow represents the amount of liquidity that is available to a business at any given time. Profitability is an accounting concept which, if you are using accrual accounting methods, may not be in sync with your cash flow. For example, it is possible for you to be profitable (and therefore owe taxes according to the way you incur sales) but still be cash flow negative. As you can imagine, negative cash flow will quickly cause problems for a business if there are no financing options available for you to pay ongoing overhead costs such as rent or payroll.
4 ways to improve cash flow
1) Stay on top of customer invoices
Getting your customers to pay you on time is key to increasing your cash flow. While it is easier said than done, here are some practical invoicing tips:
Give out incentives to pay earlier: Many business owners offer their customers discounts for paying before a certain date. This helps incentivize customers to pay faster which means better cash flow for you. Along the same lines, you can also charge a late payment penalty for those who do not pay on time.
Make it easy to accept immediate payment: More and more businesses accept credit cards for even high value or B2B sales now. While there can be fairly high processing fees to accept electronic payment, cash in hand is often still worth the fees as it reduces the risk of non-payment or late payments. Similarly, you can utilize payment services such as After-Pay, Klarna, Sezzle, Affirm, etc. These so called “lay-buy” services allow shoppers to buy now and pay in several interest-free installments. The benefit for the merchant is that the service will pay you upfront vs. a traditional “layaway” where the customer picks up the item at the end of the term once the entire purchase is paid off. As expected, deferred payment for the shopper generally increases overall sales, particularly with those that don’t have credit cards, and it will allow you to book the sale much earlier, but remember that as the merchant, you are paying a significant fee for this service (usually slightly higher than credit card processing) so make sure to shop around as different companies offer different rates and terms.
Send invoices right away: If you don’t send invoices, you can’t get paid. So make sure you stay on top of on-account sales and any unpaid invoices. Remember – the faster you send invoices out, the faster the cash comes in.
Send customers invoice reminders: It’s good practice to send friendly email reminders to your customers a week before the invoice is due, the day it’s due, and a few days after. If they still haven’t paid, it may be time to give them a call. But always make sure to include a copy of the invoice and the payment options in your email to make it easier for customers to pay.
2) Review payment processing fees
While electronic payment is important to increase convenience for shoppers, retailers should regularly examine their credit card service fees. Payment processors operate in a very competitive marketplace. It’s a good idea to do your due diligence, understand your contract terms and get estimates and quotes for your processing rates. This way, you can ensure that you are not paying more than you need to. If you process a decent volume of card transactions monthly (e.g. over $100,000 worth), make sure that you negotiate for better rates before signing any contracts.
Expert Tip: Make sure you check and understand the chargeback policies for your processor. Chargebacks (reversals on charges by the processor based on claims by the shopper) can quickly add up if you are not protecting yourself (e.g. have CCTV at your checkout till as evidence to dispute a chargeback) or using methods of payment that minimize your risk (e.g. only EMV-compliant chip & PIN terminals protect you from chargebacks).
3) Take a look at your operating expenses
Cash flow management isn’t just about getting more cash to come into your business. A big part of good cash flow management is reducing the amount of cash that is going out of your business.
For retailers, the largest monthly expenses tend to be payroll, rent, insurance, and inventory. A failure to properly manage any of these cash outflows can pose a serious threat to a retail business. Below are some tips for reducing these operating expenses:
Payroll: You don’t ever want to pay your staff to sit and watch people pass your front door. If you have a few years of sales history, make sure to keep an eye on your peak and slow periods. Make sure to create your employees and assign tasks (marketing, outbound sales calls, cleaning, repair etc.) based on the expected needs of your business, not simply ease of scheduling.
Insurance: Insurance can represent a big chunk of your expenses in a given month. Due to the competitive nature of the industry, it would be wise to seek out comparative quotes and consider larger deductibles (whatever you can reasonably afford in an emergency) to reduce your ongoing premiums.
Inventory: As the largest asset for a retail business, many retailers have their cash flow tied up in inventory. Even if you are a guideshop or an online business, unless you’re only dropshipping, you will have to draw from your store inventory or warehouse stock. That’s why careful inventory tracking and management is key to good cash flow management for every retailer or wholesaler. For a good overview of inventory management essentials for retail click here. While it’s possible to use back office software just to manage inventory, it’s always ideal to use a retail POS system with built-in inventory management features that can help you ensure that the inventory you are buying is actually selling and therefore make smarter buying decisions moving forward.
4) Have a cash reserve
There comes a time where every business experiences a cash flow shortfall. It may be due to a delayed payment of a large invoice, an unexpected personal emergency, or it could just be bad weather affecting your sales. Whatever the case may be, it’s imperative to have financial resources in place in case your business experiences a cash crunch.
While some say it’s good practice to have two months of expenses saved up as a cash reserve, the fact is, you don’t want to have funds sitting in a regular bank account, not earning you any return. If you are able to set aside some cash, it’s always best to look at higher-interest savings accounts or short-term investments that will still allow you to withdraw funds if they are needed suddenly. Make sure to check with your tax accountant to make sure it is worthwhile though – various countries, states and provinces tax business investment or interest income differently.
If it’s not possible or you don’t want to put aside such a large cash reserve, you can also consider financing options such as line of credits (LOCs) or small business loans. While the idea of owing money may make some retail owners nervous, it’s important to remember that you may not be able to qualify for a loan when you actually need it. Most LOCs or SMB loans don’t charge interest until you actually draw on the funds so as long as you only keep these options for emergencies, these can be good tools to smooth out cash flow fluctuations. Similarly, always check with your local business association to see if there are any government programs available to help with small business financing. Generally speaking, low risk financing programs to support small businesses are available at all levels of government.
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So…you’re on the hunt for a new point of sale (POS) system for your retail business.
Maybe you’re unhappy with your current POS and looking to upgrade to more innovative technology. Or, perhaps you’re still using pen and paper to manage your retail operations.
Whatever the case maybe, we’ve got you covered!
In this post, we’ll explain how much a typical POS system costs and the different factors that make up that cost. We’ll cover everything from software, hardware, and payment processing fees, before we dive into how you can find the best and most cost-effective solution for your store.
Let’s get started with the two main types of POS software for retail on the market today.
How Much Does a POS System Cost?
Legacy vs. Cloud software: The price of your POS system will depend heavily on the type of software you choose. Traditional, on-premise systems usually require an upfront investment of $4,000-$7,000. While you own continued access to use purchased licenses with this upfront payment, remember that you usually only have access to the version that you purchased. This means that you will need to pay some type of fee to get access to software upgrades or support services. While upgrades are not as important in the beginning, they will eventually be required to match the security upgrades of the operating system (e.g. Windows, etc.) or integrated tools.
In comparison, modern cloud-based (SaaS) software requires little upfront investment – instead you pay a monthly subscription fee. While this fee is ongoing, it’s important to remember that the monthly cost of cloud software is often less than on-premise software once you include the reduced cost of technical support (e.g. technicians on-site, support plans, upgrade fees) and you don’t need to worry about lost data as your information is always backed up to the cloud. The monthly cost of cloud POS software varies but to really figure out how much you can expect to pay, you’ll need to consider several factors such as the number of users, stores, features, the size of your business, etc. On average, it ranges from $80-$200 per station per month.
To learn more about on-premise vs cloud POS software, click here.
Hardware: Next, you’ll need to consider your hardware costs. Remember – POS software and hardware are not universally compatible. So once you’ve decided on a software, you’ll need to have the right hardware in place to support your POS system.
With that being said, the amount you spend on your POS equipment depends on your industry needs and how you operate. Are you planning on ringing in sales with tablet devices? Are you issuing digital or printed receipts? Does your inventory volume require you to scan items at a fast pace?
A small store owner may only require one or two tablets to operate while a mid-sized retailer may need several monitors, receipt printers, and barcode scanners.
Payment Processing fees: Arguably the most overlooked cost to a merchant are payment processing fees which can end up costing a lot in the long run as they are also an ongoing cost of business. This is why you should take your time to research your options.
For those who are not familiar with payment processing, every time a customer uses a credit or debit card, you will need to pay a fee to process that transaction. Payment processors such as Bambora or Global are the third-party service providers who process credit card transactions in exchange for a fee.
Some POS vendors act as their own card processors (Square, etc.) while others offer integrated payments. Depending on the size of your business, you can expect to pay at least 2.6% + a small transaction fee per transaction. Similar to your hardware, it’s best to go with a payment provider that integrates well with your POS system. Many POS companies offer special pricing if you opt to go for one of their preferred payment processors.
What to Consider Before Purchasing a POS System
Finding the right POS system for your retail business depends on your unique business needs. A POS software that works extremely well for one retail business (e.g a clothing store) may not work well for another (e.g. a high-traffic grocery store).
So, we’ve put together a checklist to help you find the right POS for your store. Here are some additional cost factors to consider when hunting for a new POS system:
1. Size of your retail operations: Most POS vendors will charge per location or store. Meaning the larger you get, the larger the cost to your business. Which is why it’s important to think about scalability when you make a decision about your POS.
Merchants that wish to scale their retail operations should opt for a POS system that is built for multi-location and high growth stores. This can help you save a significant amount of time and money down the road. Look out for the following features:
Unlimited stores, selling zones, and stock allocations
Multi-currency and multi-language features
The ability to handle high transaction and inventory volume
2. The quality and complexity of features: It makes sense that a more complete and useful system would cost a store owner more. While smaller retailers may not need to pay for robust features, mid-sized and larger merchants may have to.
Most POS systems come with tiered pricing plans. If you are looking for basic features (salesscreen, basic inventory etc.) then you can go for a lower-tiered plan. But if you require more advanced features (pricebooks, accounting integration, advanced inventory etc.) then you’ll have to go with a higher-tiered plan.
3. Open API access: If you are a growing business or already use other tools that you need to integrate with your POS, you will want to make sure that the POS system you’re looking at has an open API. Essentially, this is what allows merchants (with their own developers or marketing agency) to access backend data to integrate to or even enhance other applications they are already using. This is particularly important for a merchant looking to create or add innovative tools that improve their ability to compete. Examples of this include retailers looking to integrate their own custom e-commerce site, existing ERP system or even integrate to RFID devices to manage shrinkage.
4. Device Compatibility: As noted above, you need to consider compatibility with your existing devices when purchasing a POS. You don’t want to invest even more money and time in new hardware devices. This is more than simply whether your POS can run on certain devices, it includes whether the system you’re looking at can work with your existing credit card terminals, barcode scanners, etc.
5. Training and onboarding costs: Another important yet overlooked cost is the price of onboarding new POS technology. A POS solution that is inexpensive but difficult to use can cause your business a lot in the long run – this is especially true for high-traffic retailers that deal with long line-ups and peak periods. It is also important to consider if you are a retailer with a high turnover rate or seasonal peaks. If you are constantly training new staff members, it would be best to select a POS system with built-in training tools.
Remember – the proper POS software will not only help speed-up store operations, it will help you increase sales and can result in happier, more productive staff members.
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There are many different inventory management methods but ultimately, it comes down to one thing, “do you have stock when you need to sell it“.
For retailers, inventory planning matters. Inventory is your largest asset and has the greatest impact on your business cash flow. If you plan your inventory well, you can reduce your overhead costs and increase cash flow.
Cash flow sitting in old or out-of-season inventory is money that could be better used elsewhere. Lean retailers that don’t carry a lot of excess stock have more flexibility to introduce new products more quickly. This is particularly true in industries such as grocery where products are perishable or fashion where products can be trendy. All products lose value over time but in these sectors, products have shorter life cycles and a shorter lifespan, meaning they lose their value faster. And so, maintaining unnecessarily high stock levels means an increased chance of getting stuck with products that require deep discounting to free up your cash flow. Consider this the next time your suppliers offer you better prices to buy a larger volume of product.
It is important to remember, keeping your inventory lean doesn’t mean maintaining low stock levels. If stock levels are not properly aligned to your sales demand and kept too low, you will constantly have out-of-stock products. You want to avoid stockouts as they are costly to retailers not only because of lost sales, but because of wasted marketing efforts and lost customer goodwill.
In the end, selling at any price is not the objective. To be profitable, retailers need loyal, repeat customers that don’t require expensive marketing campaigns to attract. When you think of it this way, inventory is an important part of your overall customer service. Customer service is the new marketing as every touch point impacts how your customers view your business. Less stockouts means higher sales in-store and faster fulfillment for online orders, all of which means better customer satisfaction.
What can I do as a retailer to better manage my inventory?
If you’re an independent and all of this sounds scary, don’t worry. Not all retailers have the resources of the big brands, and regardless of your size, there are things you can do to better plan your inventory.
1) Make sure you always have access to real-time stock levels. You can’t manage what you don’t know. With an increasing number of sales channels (e.g. e-commerce, pop-ups, etc.), a retail POS that can handle “unified commerce” with real-time stock levels is key to inventory management in today’s market. Unified commerce is just another way of saying a total retail management platform that you can log into from anywhere that offers a single view of inventory, sales, and customer data across an entire business in real time. As expected, the need for real-time inventory data grows as the business and transaction complexity increases.
2) Use minimum stock levels (also known as safety stock levels). In many retail point-of-sale systems, you can assign a minimum stock level to every product in your store which you can easily track in comparison to your actual stock level. You should also be able to easily make mass updates in your POS when you review your minimum stock levels every 3-6 months.
3) Track inventory stock levels by supplier so that you can consolidate purchases to minimize stock-outs, lead time, and shipping costs. This will also allow you to more easily meet supplier minimum order amounts.
4) Track inventory turnover. This is essentially how many times a product is sold and replaced over a certain period of time. This can be tracked at a very high level (e.g. including the entire store inventory) or at the product/category level. There are different ways to calculate turnover but whatever approach you use, consider using Cost of Goods Sold instead of Sales as you will get a more accurate measure as your result will not include markup. For example:
From Jan-Mar, this company had inventory turnover of 13.33. This is calculated by taking the Sales$ for this period and dividing it by Average Stock Value$. Now you can convert this to “inventory days” by taking 365 / 13.33. So from Jan-Mar, inventory turns 13.33 times a year and is on hand for approximately 27.38 days. If you run the same calculations for Apr-Jun, inventory turns 18.33 times a year and is on hand for approximately 19.91 days.
From these two examples, the higher your turnover rate, the more efficient you are, since it means that your inventory is being sold faster and you have more cash flow in your business. A lot of people forget that the cost of inventory is not just the original purchase cost of an item. It includes the ongoing cost TO SELL that inventory. The longer it takes to sell something, the greater your real inventory cost as your money is sitting in that dead stock instead of products that are in high demand.
5) Determine your ideal Reorder Days. It is always a good idea to estimate the leadtime required to reorder products in time for suppliers to produce OR deliver them before you are out-of-stock. For example, if you know it takes two weeks to receive orders from a particular vendor, make sure to factor that leadtime into your reorder timing. In the beginning, you don’t want to cut it too close as unexpected delays can happen (e.g. snowstorms in the winter). This is especially true if you are ordering for a busy time of year such as Christmas. For some retailers, losing a week during the holidays might mean the difference between Christmas and Boxing Day pricing.
Inventory management for all
A lot of independent retailers or businesses often think that they are not big enough to use inventory management tools and try to use spreadsheets to keep track of their goods. While this can work in the beginning, as your inventory items grow in both size and attributes, you will either overstock (to prevent stockouts) or have constant back orders. You will also lose out on freight savings and volume discounts you might have received if you had consolidated your vendor orders more efficiently.
Start managing your inventory by following the key essentials we’ve listed above. Then when you’re ready, start to slowly automate these functions one-by-one. With the proper point-of-sale system, you will be able to spend less time managing your inventory and more time selling it.
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The best part is, you don’t have to be in the chocolate or gift industry to win the hearts of consumers! Keep reading to find out how you can take advantage of the record spending expected this Valentine’s day.
3 Ways to Increase Store Sales this Valentine’s Day
1. Add a Valentine’s Day section to your store and website
Valentine’s Day is infamous for being a last minute holiday. So, to make it easier for last minute gift buyers and shoppers, place all of your Valentine’s Day related merchandise in one section of your retail store and website.
If you own a physical retail store, dedicate a corner of your store to Valentine’s day so busy shoppers can grab and go. Consider creating a vibrant point of purchase display with Valentine’s Day colours (see the example below). Making use of signage to guide shoppers towards deals and merchandise will also help make the shopping experience more convenient.
With more and more shoppers browsing online before purchasing in-store, it’s also good practice to dedicate a section of your website to Valentine’s Day – regardless of whether or not you sell online.
Have a look at what Mejuri is doing for Valentine’s Day below. The retailer devoted a whole page on their website to Valentine’s day and even created a gift guide for shoppers.
2. Create a retargeting strategy
Selling to existing shoppers is easier and more cost-effective than acquiring new ones. So, consider retargeting shoppers who have made purchases at your retail store during the holiday season.
To target these shoppers, you can create an email campaign to inform them of your upcoming Valentine’s Day promotions. It’s also a good idea to create a Valentine’s Day gift guide to include in your email campaign.
In addition to email, running Facebook Retargeting Ads is an effective way to connect with shoppers. Facebook even gives merchants the option of uploading an email list when running retargeting ads.
You don’t need a crazy budget either – retargeting ads generally perform well with a small budget of $10- $15 a day.
3) Find a Valentine’s Day angle
Not in the chocolate or jewellery industry? That’s ok – you don’t have to sell Valentine’s Day related items to capitalize on the holiday.
You can always find a unique angle to sell your merchandise. For example, Apple found a brilliant way to position their products for Valentine’s Day, using the slogan “Love is in the Air” to promote the iPad Air.
And remember – about half of consumers will not be celebrating the holiday. Rather than alienating this customer segment, cater your marketing message to single people by encouraging shoppers to treat themselves.
For example, Mac is a retailer that recognizes the power of self-love as a marketing tool. In anticipation of Valentine’s Day, the retailer sent out an email campaign encouraging shoppers to treat themselves for the holiday.
Happy Valentine’s Day retailers! And happy selling!
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