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Step 1: How to Move Your Physical Store Online

Step 1: How to Move Your Physical Store Online

The COVID-19 pandemic has created a new reality for retailers and consumers alike. Now more than ever, consumers are spending their time searching online and browsing the internet. As a result, it has become increasingly important for retailers to move their physical stores online.

But going digital doesn’t have to be complicated. In fact, it’s very possible to grow your business using the internet without actually selling anything online.

While we always encourage merchants to take orders online, and an e-commerce site can be an effective way to build an online presence, it is not the only way of doing things. Whether or not you have an online store, it will be extremely helpful for you to drive more foot traffic, more sales, and brand awareness using the internet.

So even if you aren’t ready to start selling online tomorrow, you can approach the process step-by-step. The entire 5-step process will be covered in this blog and video series.

Step 1: Be Found Online 

Oftentimes, the first place that a customer learns about your business is the internet. Whether they’re searching on Google or discover you through an Instagram ad, your store’s digital storefront allows customers to interact with your business (calls, visits, or purchases etc.) even before they’re in your store.

What is a Digital Storefront? 

A digital storefront is everything that a customer can find about your business online, including the following components: 

  • Your Google My Business listing(s) in search results (and if your listings are complete and optimized) 
  • Online customer reviews
  • Social media profiles
  • Your website (with or without an e-commerce component) 
  • If your website is optimized for mobile devices (also called mobile responsiveness) 
  • Online advertisements
  • Visual elements of your business including photos and videos
Digital storefront

How Your Digital Storefront Impacts your Retail Business 

Online and in-store shopping were once seen as separate channels, competing for traffic and sales. But this is no longer the case. In fact, the future of retail relies on the two working together to deliver a seamless and complete customer experience, otherwise known as omnichannel retail. 

For retailers, the case for going omnichannel then becomes obvious. According to Google, today’s shoppers like to browse and research online even in cases where they intend to buy in-store. Omnichannel retail recognizes that shoppers often flip back and forth between multiple channels. With omnichannel retail, different channels work together and are tightly integrated; resulting in a seamless shopping experience for customers. 

Even though moving towards omnichannel requires change and investment across a retailer’s business operations (technology, processes, staff etc.), it can be done in a step-by-step process. Below, we’ve outlined the necessary steps that are involved in becoming an omnichannel retailer. 

How to Become an Omnichannel Retailer 

Building your Digital Storefront

1. Be Found Online

Even for retailers that only sell out of brick and mortar stores, being found online is crucial for attracting foot traffic and sales. In fact, research shows that digital now drives a surprising number of in-store sales; 83% of U.S. shoppers who visited a store within the last week say they used online search before going in store. 

The following are some tools you can use to help your business be found online: 

Google My Business

Google My Business (GMB) is a free online listing tool that helps retailers manage how their business appears on both Google Search and Maps. By verifying and optimizing your business listing, you can help local shoppers find you. Retailers can start by adding basic information such as address, phone number, store hours, and website URL. Then add details such as store and product photos, store description, and services etc. It’s also a good idea to get added to other local directory listings such as Yelp, Bing Local, Yahoo, Foursquare etc. 

To learn more about Google My Business and the steps you can take to optimize your listing, download our ebook here

Remember, 3 in 4 shoppers who find local retail information in search results helpful are more likely to visit stores. As there are billions of searches conducted on Google each day, GMB is the best platform to get your business in front of more shoppers. 

Google My Business
Online reviews and ratings

When shoppers search for businesses on the web, online reviews from sites such as Yelp often appear. These customer reviews (if they are positive) can help drive more people to visit your store. On the other hand, negative reviews are likely to drive them away – which is why it’s important to monitor them carefully to maintain a good image.

It’s crucial for retailers to respond to all of their customer reviews – both negative and positive. In fact, even if you receive a negative review, a quick response helps to highlight good customer service to potential customers. To learn more about how to manage online customer reviews, click here. 

If you want your retail business to sell more, it’s good to collect more customer reviews. Find out how to get more customer reviews here. 

Customer reviews
Social Media

Social media can be a very effective platform for increasing brand awareness and attracting new customers. However, you need to know where your customers are digitally (e.g. which social platforms they hang around) before you can begin using social media to try and attract customers. 

For example, if your target audience is an older demographic (50+), you have a better chance at success if you’re using Facebook rather than Instagram. 

Retailers are advised to do research and figure out the top social platform(s) that their target demographic spends time on. From there, you can figure out the best practices for marketing on that platform. Remember – it may be tempting to be on every single platform, but by focusing on one, you have a better chance of learning it thoroughly and having success. 

Social media
Your Website

Your website has a major impact on how shoppers feel about your retail business. From the design, site speed, and product showcase, your store’s website is often the first impression customers have of your business. Remember – an e-commerce component is not a requirement for having a website. Sure, your customers may want it or expect it (especially in the aftermath of the COVID-19 lockdowns) but the purpose of any website is to drive traffic, sales, and awareness. Merchants should not let the fear of e-commerce prevent them from setting up at least an informational website. 

The point is, building a website is an incredibly important step in establishing your store’s digital storefront. There are millions of local searches that take place everyday on Google and your business will show up higher in search results if you have a website which will drive more foot traffic to your store. In fact, 88% of people who conduct a local search on their smartphone visit a related store within a week. So, do your part by setting up your website and give potential customers a better chance to find you online before your competitors. 

A website can also serve as a starting point for you to add new retail tech into your operations. For example, while customers may not be able to purchase directly from your website (if you don’t have e-commerce yet), they can still use it to browse through your merchandise. Or, you can use live chat software to answer customer questions and offer customer service in real-time.

If you would like to learn more about how to easily set up a website for your retail business, click here

Store website

To learn more about the next steps to getting your physical store online, keep an eye out for the rest of our blog and video series.

Traditional Retail POS VS. Cloud-Based Retail POS

Traditional Retail POS VS. Cloud-Based Retail POS

If you are a retail store owner, and you’re looking to purchase a new POS system, you’re going to have to decide between a cloud-based or an on-premise software. A new POS system is a significant investment of both time and money which is why it is so important to do research to find the best option for your retail business. 

In this article, we’ll explore the differences between the two types of software and the advantages and disadvantages of each. 

What is a Traditional POS System?

Traditional POS systems, also known as legacy or on-premise POS, store data on a local database. You can think of it in the same way as storing a report or document on your desktop computer – you can’t access it from anywhere else. 

What is a Cloud-based POS System? What is SaaS?

On the other hand, cloud POS systems store data in the cloud, meaning you can access it from anywhere with an internet connection. For example, think about using applications like Google Drive or Dropbox to store your data.

While “cloud” and “SaaS” are often used interchangeably, it’s important to remember that there are hybrid cloud solutions which are not 100% cloud-hosted. This is different from SaaS systems which are true cloud native applications – software that is licensed on a subscription basis and is centrally hosted. This central hosting is what makes SaaS so cost-effective and easier to maintain compared to hybrid solutions.

Comparison of Traditional and Cloud-based POS Systems

Accessibility: As mentioned above, on-premise POS solutions have disadvantages compared to cloud-based POS when it comes to data accessibility. Since data is stored on a local server, you can only access data if you are on-site/in-store. In comparison, because you can access data anywhere with a cloud-based POS, you don’t have to be in-store to make changes to inventory, check sales reports, etc.

data accessibility

Cost: On-premise POS systems require a high upfront investment. If you add maintenance, hardware, and re-installation costs on top of the upfront fees, on-premise software can be quite expensive unless you are able to use it for an extended period of time.  

Cloud point-of-sale software usually requires very little upfront investment – instead, you pay a monthly subscription fee. Since updates are automatic and handled by the POS provider, there are no maintenance fees required either.

However, cloud POS providers charge based on a variety of factors including number of stores, employees, and inventory. That means that a cloud POS system can be quite costly as well if it is not built to scale with your retail store. If you are leaning towards signing up with a cloud POS software, it is a good idea to choose a POS that can grow with you.

POS cost

Updates: Traditional POS systems need to be manually updated and may require on-site technical support. Not only does this take up time and money, it can be disruptive as the POS system cannot be used while the update is being done. In comparison, cloud POS software comes with the added benefit of real-time updates which are usually run off-hours. Not only does this reduce maintenance costs and help ensure that your software is always up to date, it makes your software “future-proof” as your solution will keep improving over time.

POS Update

Hardware: With on-premise POS software, it is likely that you will be tied to specific hardware devices. This is due to the fact that you must pay a licensing fee for every device you wish to operate on. The more devices you have, the more costly it will be for your retail business to implement an on-premise solution.

Alternatively, with cloud POS software, you will not be tied to specific operating devices. Innovative cloud POS technology can function perfectly on any device from touchscreen monitors and iPads to mobile phones.

POS hardware

Data: Since traditional POS systems store data on a local server, there is a risk of losing all of your data if your system crashes, there is a software bug, or there is a disaster (e.g. fire, flood etc.). On the other hand, since cloud POS software automatically stores data in the cloud, your data will be safe in the instances above. At the same time, reliable POS providers will always use reputable cloud hosting service providers such as Google Cloud or Microsoft Azure to host their applications for both security and world-class reliability. 

POS data

We hope you found this article helpful. 

Stay tuned for more POS tips! 

#cloudvstraditonalpos #comparison #cloudpos #traditionalpos #builtforretail

How to Choose a Great Retail POS System: 4 Important Factors

How to Choose a Great Retail POS System: 4 Important Factors

Whether you’re a long time merchant or you’re just starting out in retail, having the right POS system in place is crucial for your success.

A retail Point-Of-Sale system helps you simplify and manage all aspects of your business operations including sales, inventory, and customers. Even better, today’s innovative POS software is data-driven and includes marketing integrations designed to help you increase your revenue. 

In this article, we’ll take you through the key aspects that you should consider when choosing a retail POS system.

4 Things to Consider when Purchasing a New Retail POS System 

  1. Cloud vs On-Premise: First, you must decide whether you want to use a cloud-based or an on-premise retail POS system. The main difference between the two softwares has to do with how data is stored.

On-premise software is installed on specific devices and data from your POS is stored on a local database (e.g. a device in your store). Because the data is stored on a specific computer or device in your store, you can only access data if you are physically in the store. For example, you can compare it to having data (e.g. a document or report) stored on your computer at home – it cannot be accessed from anywhere else. 

On the other hand, cloud software stores data on a cloud server – meaning that it can be accessed from anywhere with an internet connection. A simple example for this would be using Dropbox or Google Drive – as long as you have an internet connection, your data can be accessed from anywhere. 

When deciding between the two types of POS software, you must consider which one is a better fit for your retail business. Click here for an in-depth comparison that will help you better understand the type of software that will best suit your operational needs.

cloud technology

2. Device Compatibility: It’s important to note that not all POS software works on all devices. So you must also consider compatibility with your existing devices when selecting a new POS software. Otherwise, you’ll need to invest a considerable amount of money (and time) in new hardware devices.

When narrowing down your POS options, look for compatibility with existing devices and hardware such as your POS terminals, credit card terminals, barcode scanners, etc.

Expert Tip! An important point to note is that just because a software is cloud-based, does not mean that it is compatible on any device!  

POS hardware

3. Training and Onboarding Costs: While you may be tempted to choose the cheapest POS software option, it’s important to look at cost of onboarding the solution into the overall ROI (return on investment) of investing in new POS technology. 

A POS system that is inexpensive but difficult to use can cost you a lot in the long term. This is especially true for high-traffic retailers that deal with peak periods and long lineups. It is also important for retailers with high turnover rates or seasonal peaks. If you are constantly training new staff members, you need to consider a solution with built-in training tools.

A user-friendly software that is easy to operate will speed up store operations and make for happier, more productive employees. This means a faster onboarding process and lower training costs for you! 

employee training

4. Scalability: Many retailers make the mistake of choosing a POS without thinking about business growth. While you may only have one retail location with minimal inventory now, there’s no way to know how quickly your retail operations will grow. That’s why it’s important to make a decision about a new POS with the goal of growing your retail business. 

This means that your POS software should be able to scale with you. Look out for the following features when selecting a retail POS software: 

  • the ability to handle high transaction and inventory volume

  • unlimited stores, selling zones, and stock allocations 

  • the ability to hand multi-currency and multi-language

  • automated tax calculations based on geographical location  

Many retail POS providers restrict the amount of stores and inventory amounts that can be used – meaning that you have to invest a substantial amount of money upgrading your POS plan or investing in a new POS altogether. So rather than wasting resources switching to a new POS provider, choose a POS software that supports store growth. 

Your Retail POS should grow with you

We hope you found this article helpful!

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#retailpointofsale #cloudpointofsale #howtochooseapossystem #retailpointofsaletips #builtforretail 

What Should I do as a Small Business in the new Privacy Environment?

What Should I do as a Small Business in the new Privacy Environment?

GDPR famously came into effect in 2018 but since then, CCPA in California and PIPEDA in Canada have both changed the privacy landscape further in North America. Now more than ever, retail owners have to be prepared to deal with customers who have questions about privacy. More specifically, questions regarding the collection of their personal information , what retailers intend to do with it, and how they will protect it from misuse/data breaches.

The best thing you can do right now is start on the process so that you protect your reputation with customers and be prepared when the US or Canadian government changes local privacy regulations again. After all, regulators and customers everywhere would rather see that you have a plan and that you’re working on improving rather than giving up or saying “it doesn’t apply to me.”

Rome wasn’t built in a day

For many small businesses, even knowing where the data of their customers and other people is stored is already hard. This is especially true nowadays with so much data being used and so many integrated systems. For most of us in North America, we’re just starting to consider how best to handle privacy in our day-to-day operations.

To make it easier, we’ve listed 8 basic steps for you below to help you get started on your privacy regulation journey within the context of PIPEDA, GDPR, and CCPA (download our GDPR checklists). These 8 steps are not necessarily enough for compliance with the different privacy regulations but they are a step in the right direction. Only you can decide the data risks you are willing to take with your business but hopefully this will help you clarify what those risks are.

1) Do a Privacy Audit for Personal Data

Download our checklists to make a detailed spreadsheet or summary of where you keep and collect personal data in your business.

2) Check if you currently handle Personal Data Outside of the Country

If you do already handle sensitive Canadian, American, or European personal data, we would recommend that you get further legal assistance as the different policies (PIPEDA, GDPR, and CCPA) already require that you comply. Here is a good comparative guide you can reference to understand the differences between each act.

3) What reason(s) do you have for collecting Personal Data?

Determine what lawful basis you have to collect personal data. Consent? Contract? Legal Obligation? Legitimate Interests?

Remember that you will need to list all of your reasons or lawful bases in the published privacy policy of your web site. Your lawful basis is the legal reason why you can collect and keep personal data so be cautious to think through what you choose or ask for legal advice on this. The different privacy policy regulations require that you explain why you chose to change your lawful basis should somebody make a complaint against your company. 

4) Review existing data and delete any unwanted data

This is probably the most painful part of this exercise. If you have been patiently collecting customer or lead data for years, you will need to make the difficult decision to determine as to whether it is necessary for you to keep all of your existing data. In some instances, you may find that you have been collecting data for years that you never use. In others, it may be that you have some concerns about the source of a list of leads you received in the past. Whether you decide to keep the data or not, it is important that you are aware of what you have so that you know the risks.

5) Update company policies and agreements

Spend some time reviewing all of your existing policies and agreements but especially your privacy policy and your terms of service. If you don’t have either published on your web site yet you’re not alone as many small businesses don’t realize that existing US and Canadian regulations require privacy policies. Now is a good time to have one drafted and added to your site so that you comply with current local requirements and other regulations on this issue.

Remember that the point of these different policies was to make privacy handling more transparent and easier for the average reader to understand as pages and pages of legalese defeats the purpose of any of the new regulations. Depending on the industry you’re in, you will want to have a lawyer look over your policies and agreements but if you’re a small retailer simply looking for a basic privacy policy, you can consider using the free policy generator offered by Shopify or iubenda which has free and paid versions (click for discount code) to post on your web site.

It’s also a good idea to let your email subscribers know whenever you make major revisions to your privacy policy although we would recommend that you add these updates to your regular email updates to ensure the best open rates and visibility.

6) Revise company processes and suppliers

Moving forward you should only gather personal data you need and make sure you have lawful grounds to process it.

Add and document consent wherever possible in your business processes. Consent has to be freely given, specific, informed and unambiguous (pre-ticked boxes aren’t allowed) on all of your forms (digital or paper). For email marketing, use reputable services such as MailChimp that are legally compliant so that subscribers are able to unsubscribe at any time.

7) Review all 3rd party processors and sign Data Processing Agreements (DPAs)

It’s also important to consider the privacy practices of your suppliers if you share any data with them that contains personal information. Be understanding that many North American businesses and most small businesses aren’t ready for updated privacy regulations but just make sure that your key partners are making efforts to improve how they handle privacy in their operations. If you’re sharing data with large processors such as Google Analytics, Facebook or MailChimp, you should sign the Data Processing Agreements (DPAs) or review the privacy settings they have for customers that share personal data with them. We’ve listed a few key processor DPAs below:

MailChimp

Google Analytics

Facebook

8) Review your company data security

You cannot have privacy without security. While there’s no such thing as 100% security, every business should review who has access to company data and whether current security settings and back-ups are sufficient.

What we’re doing at TAKU Retail

Like so many of you, we too are doing our best to try to meet ever-changing market expectations. And we’ve made the conscious decision to move towards a higher standard of privacy management so that you can feel confident about how we operate at TAKU Retail POS. To do this, we have recently updated our privacy policy, added consent options to our web forms and our web site cookie handling.

retail privacy policy

This post is an updated version of an original post published on the ACE POS retail blog.

You can join our beta waitlist here. In the meantime, subscribe to our blog for more retail tips and strategies.

12 Helpful Features You Should Look for in a Retail POS System

12 Helpful Features You Should Look for in a Retail POS System

Owning the right POS system is essential to the success of any retail business. Today, a retail POS system can do much more than just handle payments and record sales – innovative POS technology now functions as a complete retail management system. 

In other words, a feature-rich retail POS system acts as a tool that enables you to both manage and grow your store.

But with so many different retail POS software in the market, how do you find the right one for your retail business?

Whether you’re looking for your first ever POS software or looking to upgrade to a new one, finding the right solution for your retail store doesn’t need to be difficult. 

In this article, we’ve broken down the most important features to consider when choosing a retail POS system. 

12 Key Features to look for in a Retail POS System

 

Point of Sale Features

Let’s begin by discussing all of the features needed in the sales portion of your retail POS. This covers all of the functionalities and features needed for a fast and easy checkout experience. 

grocery store checkout

1) Easy to Navigate Salesscreen: In order to ensure a fast checkout experience, it’s important to look for a POS system that is user friendly and designed for minimum clicksCashiers shouldn’t have to leave the salesscreen in order to complete a transaction.

2) Fast Barcode Scanning: Your retail POS system should be designed for quick scanning speed while giving you the ability to quickly recall your last search. It’s also important that your POS software can handle multiple barcodes per SKU (an internal code, a shortcode, a vendor code(s), and a manufacturer code). 

3) Advanced Inventory Search: Besides handling a high volume of inventory and transactions (read inventory features below), your retail POS software needs to have smart search functions. This will allow you and your employees to search for products by keyword, description, barcode or tag in case labels fall off or are not scannable. 

4) Inventory Management: Inventory is the most important asset you have as a retailer which is why it is necessary to track and keep an accurate count of all of your merchandise.

retail employee doing inventory check

The inventory management component of your retail POS will help you replace tedious methods of inventory control resulting in time, money, and effort saved.

5) Mobile AccessibilityMore and more retailers are recognizing the benefits of cloud technology and consequently, cloud POS adoption is growing at a significant rate. Cloud POS software stores data in the cloud giving you the benefits of remote accessibility, cost-savings, and real-time data accuracy. Click here to learn more about the benefits of cloud POS technology.

You’ll also want to make sure that your retail POS is completely mobile-friendly and can be run on any device. This will enable you to ring in sales anywhere in your store (e.g. on an tablet or mobile phone) which means a faster checkout experience for your shoppers.

6) Cross-Platform Access: Having a POS software that is compatible on any device is important for emergency instances when your store’s internet connection goes down. In the past, it was assumed that offline capability is the best alternative when internet access is down. But the fact is, credit and debit cards are the most popular payment methods for shoppers today, and PINpads won’t work without an internet connection.

Some systems offer the ability to store credit card details in the device until internet is back up but not only is it riskier to shopper payment details, you’re taking the chance of the stored payments not getting approved.

In today’s market, offline capability is not as useful as a smart POS platform that can be logged in from any device. When internet goes down, it’s as simple as securely logging in with a mobile device with data to continue ringing in sales.

7) User Access Rights: It is likely that you will have multiple people working in your business. Which means that your retail POS will need to be able to identify different users and give them tailored access to the system based on their role. User access rights also enable store owners to limit permissions on certain features in your POS (for ex: reports, etc.).

8) Scalability: Look for a POS software that will grow with you as your retail operations scale. Your retail POS should have the following features: the ability to handle high transaction and inventory volume, international tax settings, multi-currency handling, unlimited stores, selling zones and multiple stock allocations. 

These features will allow you to grow and scale with your POS software. Some cloud POS software have limits on the number of users and stores – meaning if you eventually outgrow your existing system, you will need to invest a considerable amount into upgrading or switching to another POS altogether

9) Customer Relationship Management (CRM)

customer relationship management

The CRM component of your retail POS software stores shopper information and allows you to better manage your customer base. It can generate huge benefits for your store – including better customer relationships, sales reports that allow you to make better business decisions and more efficient operations. These benefits ultimately lead to more sales.

10) Bulk Item Import: For fast POS onboarding, you will want to select a retail POS that can import all of your inventory and customer details. Otherwise you will be stuck manually uploading your inventory – which is an extremely tedious and time consuming task.

11) Built-In Training Tools: Smart POS systems today will have self-service functions such as built-in chat support, online knowledge portals and even step-by-step guided products tours. Not only does this minimize your onboarding costs, it ensure that staff can quickly learn how to use the system at their own convenience.

12) Marketing Integrations: Traditional point-of-sale systems are essential to retail operations management but modern cloud POS systems are data-driven which means you can now use your retail store data to drive digital marketing. A POS that has built-in marketing tools will allow you to streamline your marketing efforts so that you can sell more. For example, a POS that integrates to Google will help your retail business appear higher up in search results – resulting in more local foot traffic and sales.


TAKU Retail POS is designed for high traffic retailers looking to increase foot traffic to their physical stores. Join our beta waitlist here

#POSfeatures #retailPOS #retailpointofsale 

Inventory Management 101: What are SKUs?

Inventory Management 101: What are SKUs?

A SKU (pronounced “skew”) stands for Stock Keeping Unit and is used by retailers to both identify inventory and keep track of inventory movement. 

It is basically a unique combination of numbers and letters assigned to each product in a retail store. As a retail owner, SKUs give all of your products a single type of code to help you keep track of certain details for a specific product including price, product information (colour, size, features, etc.), quantity, and manufacturer. SKUs are often associated with vendors or supplier barcodes but can they can also be converted into scannable barcodes and printed on to product labels.

A retail POS system is the software that holds all of this inventory information so that you can track what you’re buying, how much stock you’re carrying and whether stock movement matches what you’ve sold. Whenever you’re looking for a new retail POS system make sure to check if the software will allow you to use your existing SKUs and also generate consecutive SKUs for new products. This is particularly important if you integrate to other non-POS systems (e.g. accounting systems) based on your SKU names. 

SKUs vs GTINs

SKUs should not be mistaken for Global Trade Item Numbers (GTINs) or Universal Product Codes (or UPCs). SKUs are internal codes used for products that are unique to a retail business. On the other hand, GTINs or UPCs are the same for a product – no matter who/what store sells it.

product label

How are SKUs Made? 

Each retail store has a unique and specific process in place for choosing SKUs. This method is usually easy to understand and follow for retail staff. 

POS systems can help you create SKU codes based on a format that works for your business. For example, your SKU code can have a specific prefix or suffix together with a number that increases consecutively. For example, a SKU for your business might be FD-2340-GR. Others use shortcodes within their SKUs as an easy hint to staff so they don’t need to memorize numbers.

retail POS system

How are SKUs used?

Inventory management: Inventory/stock-takes should be done at regular intervals in retail; both for tax purposes and to ensure accurate inventory levels. 

When each product is assigned a unique SKU, inventory availability is easier to determine throughout the year. And when it comes time for a stock-take, SKUs make it easier to reconcile stock levels – so that actual inventory levels match inventory counts in your retail POS or inventory management system. 

inventory management

Stock replenishment: Making use of SKUs can help store owners identify reorder points and a minimum threshold – so when inventory hits a certain level, they are made aware that a new purchase order needs to be placed. 

These internal codes also help you identify the products that move faster. Meaning you only have to re-order when you really need to – resulting in reduced inventory holding costs. 

skus make for easier stock replenishment

Better customer experience: Have you ever walked into a store and seen a pair of shoes or a t-shirt that you liked – but it turned out that you needed a different size? In this case, retail employees usually scan the item’s barcode or label to see if they have your size in stock, either in the back stockroom or at a different location. 

This instance explains how SKUs are used within a retail system to improve customer experience. When products share a traceable type of code, you and your staff can more easily identify stock levels quickly so that more time is available to actually assist customers.

identify stock levels quickly

Identify profitable stock: SKUs are generally the easiest way for retailers to filter for specific and detailed product reporting – e.g. identifying best sellers and underperforming products by their SKU. When you combine this with merchandising and product categories or tags, business owners can more easily see the effectiveness of their store’s product mix. 

identify best sellers and underperformers

Identify inventory shrinkage: Inventory shrinkage in retail can be defined as the discrepancy that exists between the inventory quantity in a retailer’s POS system and the actual inventory in that store. In other words, it consists of the stock/product/inventory that goes missing due to human error, theft, damage, miscounting etc. 

Inventory management is key to combating shrinkage in retail. As stated in an inventory shrinkage article published by Forbes, “Without an active inventory process, you do not realize your losses until it is too late.” 

And properly designed and implemented SKUs are central to any good inventory management system. They are key to modern digital retail since they are necessary to share and track inventory information between different locations, systems, and sales channels.

SKUs help reduce inventory shrinkage

Did you find this article helpful?

We will be posting more inventory management tips in the upcoming weeks.

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#SKUdefination #whatareSKUS #inventorymanagement #retailPOS #cloudPOS #pointofsale #builtforretail