To keep up with shoppers today, merchants need a modern cloud POS software that will allow them to quickly adapt to market changes and easily sell both in-store and online. Cloud technology offers that flexibility.
The Coronavirus pandemic changed the way that consumers shop, work, and live. Retail is no exception. In 2020, over 80% of consumers shopped at least once online. Since the pandemic, there have been new sales strategies that retailers are adopting such as contactless payment, curbside pickup, virtual consultations, and even social commerce (purchasing products through social media). According to retail experts and shopper surveys, this new behavior is here to stay.
What Is Cloud POS Software?
A cloud POS system is a retail management software that doesn’t need to be installed anywhere. Instead of maintaining a server computer in your physical store, cloud POS companies host your information on secure third-party services such as Google Cloud or Microsoft Azure. This is different to traditional POS systems which can only be installed and/or used on specific devices.
Cloud-based systems has advantages in the current shopper environment when compared to installed software. Some obvious advantages are its flexibility and affordability. These characteristics make a huge difference during uncertain times and are key reasons why more merchants are switching to cloud-based systems than ever before.
Until the pandemic started, multi-location retailers were the businesses most likely to look at cloud-based POS. This makes a lot of sense since the sharing of information between different stores is much harder with traditional POS systems. Since the COVID-19 pandemic, there has been an increased the demand for online sales options. For retailers with only a single physical store, this means that they need to manage customers and inventory between in-store and online sales.
Let’s take a closer look at some of the main benefits of replacing your traditional retail POS with a cloud-based system.
The Benefits Of Cloud POS Software For Retailers Today
As traditional shoppers are increasingly buying online for store pick-up or delivery, retailers need a solid strategy to keep track of inventory, This can be stressful for retailers since online sales are often handled separately from traditional POS systems. Keeping track of inventory history and stock levels everywhere you sell is critical as stock-outs can lead to upset customers and lost sales.
A lot of traditional POS solutions have “cloud” options but many of these are clunky, remote workarounds that don’t sync inventory across locations in real-time, often break down, require expensive third-party tools and technical support to fix.
With uncertain demand throughout the pandemic, managing inventory can be difficult with traditional systems. This is because these systems are sometimes separate or sync only once a day can be a serious drain on resources and finances. The pandemic has also made it even harder for merchants to afford the staff necessary to manually manage inventory or check stock levels because the quantities in the POS system aren’t accurate.
With a modern cloud-based retail POS platform, retailers are able to do all of the following within a single software:
share the same products across all locations and digital channels
split the same product stock quantities by store, website or warehouse
easily create new stores or stock splits to re-allocate inventory at any time
give staff the ability to check all locations for real-time product availability
control exactly how much access staff have to see costs and inventory details
fulfill online sales from stores for pickup or delivery with ease
buy online, pay in-store during pickup
buy online, add more / exchange / return in-store
minimize stock-outs because you can quickly adjust purchasing or move stock quantities around as sales happen, not after the fact
A cloud-based retail POS system provides greater mobility which basically means that retailers can sell from anywhere inside the store, outside the store or online 24/7. The COVID-19 pandemic has proven that retailers need this kind of flexibility in their business. During the recent lockdowns, retailers with access to their POS systems from anywhere were able to immediately work from home or take payments outside of their stores during order pickup.
Modern systems such as TAKU Retail can function on any device which makes it even more cost-effective for retailers to adopt. True cloud systems are not tied to any specific device. Where earlier cloud systems are limited to only a single type of hardware (e.g. iPads), the latest cloud POS systems allow retailers to use any existing web-enabled devices. Similar to how people sharing a Netflix account can watch shows on Windows or Mac computers, Android or Apple smart devices, people selling using a cloud POS can work off of any of these devices together. This type of flexibility helps merchants reduce the overall cost of hardware, even as they grow, since almost any existing device can be turned into a station.
And accessibility doesn’t refer only to selling or accessing reports. While older installed or cloud systems only give retailers access to specific functions, true cloud systems give you full access to all of the features in the software so you can run your business from anywhere. This also includes managing access rights all from one dashboard. If you’re a larger retailer, you should be able to quickly manage (or revise) the access rights for each staff member across all devices wherever you happen to be working.
3. Manage Shoppers From Every Channel In One Dashboard
While the Coronavirus pandemic will pass, changes in consumer shopping habits are here to stay. Retail consumers are now shopping locally, cost-consciously, and digitally. Being there for your customers wherever they are is often called “omnichannel retail” or “unified commerce”.
What’s important to remember is that being omnichannel is about more than simply making sales in all channels. It’s about providing a seamless experience for shoppers. It means making it easier for shoppers to find you, buy from you or even bring something back to you. There’s no doubt that taking orders online is important to the survival of a lot of retailers during the pandemic. But in the long-term, omnichannel retailers are more profitable because they have more opportunities to engage with their shoppers across different channels. And omnichannel drives higher-margins in-store sales together with the convenience of online 24/7 shopping.
Another thing to keep in mind is that online sales naturally come with higher return rates as shoppers make mistakes or shipments are damaged. Being able to manage all of your sales and returns across all channels from stores is important to minimize returns and to minimize the costs of these returns – e.g. by offering in-store returns or exchanges to avoid losing sales or paying double the processing fees.
Many retailers experienced significant growth in online sales and store pickup during the pandemic. In fact, in some essential sectors, traditional stores were unable to keep up with the demand as they struggled to handle the sudden boost in traffic.
As your business grows and becomes more complex, your retail management system must be able to accommodate new stores, new sales channels, new employees, and new product lines without any limitations. A flexible unified commerce system will have the built-in options required for you to adapt as your business grows. This includes functions such as unlimited physical stores, unlimited back office users, unlimited stock quantity splits and customizable tax rules. With customizable settings, fast onboarding support and transparent pricing, modern cloud systems offer retail owners a flexible tailored solution that can easily scale without hidden costs.
With shopping behavior shifting constantly throughout the pandemic, being able to track, manage, and engage with customers across all channels is key for long-term success. An all-in-one cloud POS software allows you to handle all of your touchpoints from in-store shopping and curbside pickup to local delivery, all under a single login. It allows retailers to be flexible with their business processes and adapt quickly when the environment changes.
With traditional systems, data needs to be manually managed between different sales channels. In comparison, cloud-based systems give merchants access to shared retail data which makes it significantly easier for them to see trends as they happen in real-time.
Built with next-generation technology, modern cloud platforms are even able to help retailers leverage their own retail data to attract more shoppers. As the first POS company to be a Trusted Google Partner, TAKU is the first platform in the industry to automatically help retailers be found online by people searching nearby for what they sell. Not only can newer cloud POS systems increase sales when shoppers are engaged, they can now help retailers get in front of shoppers before they even leave their homes.
Make sure you’re using retail technology that can keep up with the rapidly changing world post-pandemic. Make the switch to cloud today – it’s easier than you think.
Want to know how TAKU can help you sell anywhere and at anytime?
October to December marks the peak shopping season for retail stores. It’s a time when many retailers plan for an increase in shoppers. As the world moves out of the global pandemic, retailers need to be ready for customers with new shopping behaviors.
According to a Google study, 70% won’t consider purchasing something without seeing it online: whether it is an ad, browsing through a website, social media, or email newsletter. This means that retailers need to start ramping up on their online efforts early: whether it is sending weekly newsletters or updating social media on a regular basis, “online storefronts” are more important than ever to shoppers.
People often flip between discovery (window-shopping) and shopping (looking for products mainly based on functions or features) until they are ready to make a purchasing decision. Of the two, discovery is more emotional and can often override the rational thinking behind shopping. Which is why online “pre-shopping” discovery is so important to the entire shopping process now.
A Statista survey showed that up to 50% of people are planning to do their holiday shopping in-stores. This means that retailers need to be ready to showcase new merchandise and discounts online to shoppers even before they make it to the stores.
In 2020, up to 79% of people left their holiday shopping until one-week before Christmas. This is good news for retailers because they are able to push their efforts to the very last minute. The same study showed that 64% of shoppers planned to shop in-stores. After more than a year of restrictions, people are eager to get out. This is great for physical stores that are able to target shoppers when they’re nearby.
Convenience plays a huge role in purchasing decisions today. “Now near me” searches have grown 100% worldwide. Options for store-managed e-commerce have also increased a lot. Because some shoppers will always leave holiday shopping until the last minute, local stores have a major advantage. After all, everybody has experienced shipping delays given the increase in online shopping. Instead, more local shoppers are searching for ways to buy online and pickup in store (BOPIS) to avoid delays.
The key to successfully offering store pickup for online orders is inventory accuracy. This means using store operations software that offers real-time stock information in-store and online. One way to make sure that your store appears online is to use Google’s free product listings and Local Inventory Ads (LIA). Learn more about how to increase foot traffic to stores with Google here.
For last minute shoppers, retailers can offer store pickup. Not only does this avoid delivery delays, it helps encourage shoppers to purchase extra items when they come to the store for their orders. Make sure that your order pickup area is well-merchandised with suitable impulse products. And consider switching to an order pickup system that will allow staff to checkout customers. There’s nothing worse than losing sales from a in-store shopper just because a customer doesn’t want to line up again to pay.
As January rolls in, people will be more careful about money after the busiest spending months of the year. There will be a lot of returns that take place both online and in physical stores. You will need to prepare for this and find new ways to tackle loss prevention too.
Rewrite And Reconsider Different Return Policies
You need to communicate your return and exchange policies to customers both in-store and on all receipts. Make sure you have your policies posted around the store and the checkout area so that staff also understand them. Some important things to remember when writing them are being clear about:
acceptable return windows
condition of items
type of items that can be returned (eg. some stores will not allow cosmetics and intimate items to be returned), return fees, etc.
Being clear about policies can reduce stress for both staff and angry shoppers post-holidays.
Examples: Zara employees tell shoppers their return / exchange policies during checkout. The policies are also printed and circled on their receipts. Zara also offers a short window of exchange for regular-priced items so that people do not keep returning seasonal items for new releases. Having these rules in place are especially important for stores that carry seasonal items. Canadian Tire does not offer returns or exchanges on Christmas trees past December 24.
Retail tip: When processing returns, you should cross out items on shoppers’ receipts and take down their information so that you can see if there is a history of similar behavior. This will help with loss prevention.
Encourage People To Exchange Items Instead
You should minimize refunds because they are a net loss. Besides damage to the products themselves, one of the main costs of returns is bank processing fees. Banks charge fees for purchases as well as refunds by card. In other words, you end up paying twice the fees when refunding money to customers.
While you might offer refunds in your policies, you can minimize your losses by offering shoppers an exchange instead. That way, instead of losing money, you still have a chance to keep the sale or in the best case scenario, make more money.
Retail tip: Offer Buy Online Return in Store (BORIS) so that people can still shop around before they return their products. Shoppers are more likely to buy more or exchange their items in-store. This also gives you a chance to introduce new items to them or impress them with your customer service.
Automate The Process
Shoppers are more likely to return to businesses when they have a good return experience. Whether you sell in-store or omnichannel, retailers need clear return policies and systems in place to handle returns smoothly. You should also make it easy for people to return both online and in-store. This helps nudge customers back into your store in the future. Plus, since you already have their personal information, you are able to send retargeting ads and emails to them about upcoming sales and store events.
Retail tip: You need to get shoppers’ consent before sending them SMS messages or emails.
Resell Merchandise At A Discounted Price
Instead of throwing products away, stores can offer any imperfect items at a discounted price. This lets you keep selling things that would otherwise be wasted.
Example: Best Buy offers both customers the option of buying open-box and refurbished items at a discounted price. This is especially important for high-ticket items such as electronics. Amazon offers different prices for used or returned products based on their condition (used, used-good, etc.). These retailers are able to keep selling products even after the products have been returned.
Want to know more about successful inventory management?
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 cashflow. This article will help you understand the essentials to inventory management for retailers.
Cashflow sitting in old or out-of-season inventory is money that could be better used elsewhere. Many successful retailers don’t carry a lot of excess stock to have the flexibility to introduce new products more quickly. This is particularly true in industries such as grocery where products can easily expire or fashion where products can be trendy. All products are worth less over time as they get “stale.” But in fast-moving sectors, products have shorter life cycles, meaning they lose their value faster. As such, carrying too much stock means an increased chance of getting stuck with products that require deep discounting to free up your cashflow. Consider this the next time your suppliers offer you better prices to buy a larger volume of product.
Remember though, keeping your inventory “lean” doesn’t only mean keeping stock levels low. If stock levels don’t match your sales demand and are kept too low, you will constantly have out-of-stock products. You want to avoid stock-outs as they are costly to retailers. They lead to lost sales, wasted marketing efforts, and unhappier customers.
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“.
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 get them to buy. 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 stock-outs 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 a small-to-midsize retailer 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 essential 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
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
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 essential to inventory management in retail. Basically this refers to 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 lead time 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 lead time 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 – Essential For All
A lot of independent retailers or businesses often think that they are not large 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 stock-outs) 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 improving your operations by following the key essentials to inventory management 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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One of the most common methods of payment in both traditional and online retail is payment by credit or debit cards. This is particularly true since the pandemic started as more and more shoppers are looking to avoid touching cash and prefer to pay with contactless payment options. After all, card-based payments are reliable and trustworthy ways to accept payments easily. But there are a lot of things to consider when choosing a new payment processor. Here’s what retailers should consider to minimize their costs when signing up with a new card processor:
Type of Payment Options
The type of retail business you have determines the way in which you take payment. There are 3 general types of payment options:
Card Terminals (EMV PIN Pads) for merchants to accept in-person payments
Virtual Terminals for merchants to manually accept payments with the card payer present (e.g. phone or fax payments)
Payment Gateways for customers to make payments themselves in the shopping cart of an online store (e.g. PayPal, Bambora, Stripe, etc.)
Each of these types of payments can be supplied by the same or differing payment processors but they each have different rates. Generally speaking, card terminals have the lowest rates and are considered the most secure because the card holder must be present and / or provide verification with a PIN code. Remember that magnetic stripe readers are not EMV compliant and only chip-and-PIN terminals protect the merchant against chargebacks.
Expert Tip: While card terminals are EMV compliant and do protect merchants against chargebacks, this is usually only for in-person payments made using chip-and-PIN. Since the pandemic started, more and more retailers are offering contactless (tap) payments. But if you do accept contactless payment as a merchant, you should always check your payment processing policy to see if tap payments have chargeback liability. Many processors do not cover tap payments and so merchants may be on the hook for any chargebacks on such payments. This is why many merchants have a tap limit and it is definitely something a merchant should check if they’re thinking of increasing their tap limit.
Virtual terminals have higher card rates than card terminals but they are still generally lower than payment gateways. Merchants should keep in mind that virtual terminals still open the merchant to chargeback liability. The best way for retailers to minimize the liability exposure is to make sure that there is a customer-signed order agreement and for the merchant to collect as much verification information as possible such as billing address, etc.
Finally, there are payment gateways. This is the payment option for e-commerce which generally has the highest fees as it’s considered the highest risk of the 3 options. Similar to virtual terminals, online payments are liable to chargebacks. Merchants selling online should always check with their gateway payment provider for their chargeback policies and how they can best protect themselves from them.
Types of Payment Processing Fees
Even when you know what payment options work for a retail business, various processors will have offer different types of processing fees:
Flat % Fee + ¢ per transaction
Interchange Plus % + monthly fees
CAD vs. Foreign Currency
Credit card processing fees often range between 1.55%-4% with variable rates from Mastercard, Visa, Discover and American Express. Some credit card processors charge more for particular credits cards (eg. American Express) because American Express relies more heavily on merchant swipe fees and annual fees rather than interest rates (that most other processors make money on).
Everything else being equal, merchants should compare different processing fees based on three factors:
The average number of transactions per month
The average dollar value of every transaction
The total value of all sales processed per month
Here’s an example of how processing fees can be dramatically different based on variations in the 3 factors above. Merchants should always compare the rates between processors before signing a new processing agreement.
Expert Tip: While Interchange Plus rates often work best for retailers with fairly high processing volume (e.g. $1M+ annually), it’s important to consider the type of clientele a merchant has. This is because Interchange Plus processing fees charge different rates based on the type of cards used (e.g. gold cards cost merchants more than standard credit cards). As such retailers who sell luxury or high-end products may be better off with a flat % monthly fee if the majority of their clients are customers with premium or foreign currency cards.
POS Payment Integration
Traditionally, merchant processing is handled separately for in-store and online payments. While this is changing now with a few all-in-one payment solutions coming out, besides the overall cost of the processing fees, the biggest cost to managing retail payments is the amount of resources required to track payments against sales.
After all, reconciling payments received is key to making sure that all funds are received and to quickly find out when there are any operational issues that need to be addressed immediately (e.g. suspicious employee behavior, high refunds, etc.)
This is why more and more retailers are looking for POS that can handle their preferred payment processor whether for online or in-store payments. Having payments automatically recorded in the POS minimizes human error and increases checkout speed which is important for stores with higher traffic.
Individual merchants will value different features but, generally speaking, the more established the retailer, the more important it is for the merchant to minimize sales-based fees that take a percentage of sales. While some software solutions have low (or even no) monthly costs, it’s usually because they charge higher than average % fees and / or restrict you from choosing other payment options by charging additional transaction fees on top of the regular payment fees. Others like TAKU Retail charge a flat monthly software fee with no additional sales-based % fees.
Other things to look out for in a retail POS is whether it allows refunds in-store regardless of where a payment is received. Many systems were designed to accept sales separately from different sales channels. As such, it can be a hassle to manage returns and accept refunds in separate systems. Systems like TAKU Retail allow merchants to manage even online returns with store-based refunds or exchanges. This allows merchants to not only encourage exchanges instead of refunds to avoid losing the entire sale, but it allows merchants to refund with lower cost payments options such as cash or debit as many payment processors charge the same rate for refunds as for sales.
Other Things to Consider
Retailers also need to be wary of other a few other factors when choosing their credit card processors to ensure that they are well-protected and aware of the real cost:
The amount of time required (withholding period) for funds to be deposited into the company bank account.
Whether processing fees are deducted upfront (Net Deposits) or at the end of every month (Gross Deposits) – net deposits can be harder for bank reconciliations as the original sales amounts won’t be on monthly statements.
Whether payment processing statements are all-in-one or separate for different sales channels.
Whether there are additional monthly fees and minimums.
Want to read more articles? You can find our latest article on retail shrinkage here
It’s no secret that retail is no longer a one-step shopping experience. Customers want the flexibility of taking their in-store experience online and vice versa. In 2020, Walmart responded to the global pandemic by improving their omnichannel experience and adding more square footage to their stores for online order fulfillment. This helped them achieve a 97% spike in e-commerce sales.
A study by First Insight showed that customers in many categories still prefer in-store shopping versus buying online. In particular, the study showed that over 70% of shoppers are more likely to make impulse purchases or buy more in store, because of the merchandising and customer experience.
It’s just that the pandemic has made it more likely that the customer journey starts online, even if the actual purchase happens in a physical store. As such, for traditional merchants, it’s not about whether customers are shopping more online or in-store. It’s about needing to serve customers across multiple channels, often at the same time. This is why the entire omnichannel shopping experience is increasingly important.
But if you’re a traditional retailer just starting out in this brave, new world, where do you start? Changing store processes to serve omnichannel shoppers isn’t something that can happen overnight. This is where “clicks-to-bricks” strategies come in.
Clicks-to-bricks simply refers to strategies that focus on using “digital storefronts” or “pre-shopping discovery” online to drive foot traffic into stores instead of encouraging customers to mainly shop online. Even if you offer delivery, there are a lot of benefits to focusing on store-driven online shopping.
Top 5 Advantages of a Clicks-to-Bricks Strategy
It maximizes local awareness of your business online. During the pandemic, a lot of businesses focused on selling online and neglected the fact that store shoppers also start their buying journey online. Whether it’s checking store hours or stock availability, being found online is key to offering a smooth customer experience. The easier it is for shoppers to find you online, the more likely they are to purchase from you as compared to some of your competitors who may not be as easy to find.
It increases sales per shopper. Shoppers buy more when shopping in store. Retailers want customers to buy in store because they are more likely to make additional impulse buys with higher margins. If store products are linked to online search with tools such as Google’s See What’s In Store (SWIS) or Local Inventory Ads (LIA), you’ll get store shoppers that walk in “ready to buy” as they already know what you carry and have on your shelves. In fact, helping customers “pre-shop” or “discover” products online can drive more traffic to both physical and online stores. This will increase overall sales per shopper as you’re able to serve shoppers in multiple channels.
It maximizes profitability. Besides bigger basket sizes, using online awareness to drive higher quality foot traffic to your store means that you’ll be spending less in marketing for higher sales. If you use omnichannel tools that link your store data with online research, you can even save on the cost of having employees or agencies manage your product information online.
It gives you useful customer insights. Connecting with customers on multiple channels means more opportunities to gather information about your customers. Whether it is an email address or a physical address, having more data increases retailers’ insights into their customers and their buying habits, making marketing easier and cheaper over time.
It gives you useful inventory insights. Knowing what sells well on which channel allows retailers to sell and target specific segments when releasing new products or product lines.