Australian Convenience Store News | Systems for a new millennium

ou may have progressed beyond a pencil stub and butcher's paper, but does your last century POS system meet your business needs today and into the future?

Australian Convenience Store News would like to thank the following organizations for their assistance with this feature. Within the constraints of a single feature, it is not possible to do justice to each contribution, so we wish to thank them equally for sharing their time and knowledge.

Datasphere
e-Orders
Epos Commerce
EPSON Australia
ExtraPOS Solutions
Global Electronic Banking
IBM
POSPOS Pty Ltd
Quatro Four Retail
Quicken Australia
Radiant Systems
Retech Global
Scanning Systems Australia
TEC Australia

Point (of sale) number 1 - know your business
Without a clear understanding of the way you want to manage your business, there is no way you will know which POS system is best for you. If you can answer the questions WHAT (do I need) and WHY (do I need it), then you are some way to finding out HOW (can I get it). Technology makes it faster, easier, more accurate, and more flexible. It can free your time to spend with your customers, your business and your family. However, technology does not replace good management.

Before you start looking at a new POS system, start looking at how you do business and how you would like to do business - a new system might make hitherto complicated tasks easier.

This is more than just deciding that you want management information and inventory control; it is also about the systems that suit your business model. The record of sale can be linked automatically to a number of key business processes - margin management, inventory management, invoicing and payment, shelf labelling, accounting and tax, customer information, and marketing.

Different systems undertake these processes in different ways. With inventory control, does your business require regular stock-takes or is stock replenishment based on the sales recorded adequate to meet your customers' needs? Do you prefer to adjust prices based on cost price or selling price? Do you want to prompt the operator to make special offers to customers? Do you want to be able to tailor customer loyalty programmes to suit your demographic? Do you want to retain some existing software such as a tailored accounting package?

There are no one-size-fits-all quick fixes, and there are some pitfalls to be wary of. There is the risk of underdoing it:

And, there is the risk of overdoing it:

This is why it is advisable to use the services of a systems integrator with expertise in your particular channel. Integrators are usually developers of specialized retailing software that put together packages of hardware, other software and other systems to create a complete POS and back office management system. They generally use reliable hardware suppliers, and mix and match to suit the package.

Here, we present some examples of available systems with an emphasis on the underlying management processes. This is not a comprehensive survey of what is available, and you will need to do your own research and arrange some demonstrations to fully appreciate what they can do for you.

ExtraPOS Solutions is a training company and systems integrator specialising in Quicken software. For the convenience and route channel, this includes QuickPOS and QuickBooks, providing customised inventory reporting and BAS reporting. The system can create purchase orders, record stock replenishment, manage customer accounts and personalise mail-outs, and design and print labels, bar codes and advertising. It is compatible with a wide range of supported hardware. Designed for small- to medium-sized businesses, it manages up to 14,500 items of inventory.

Global Electronic Banking puts together systems based on EposCommerce's Store Trader software designed in the United Kingdom. This is a simple, flexible POS system with equipment designed for the task. POS sales recording is integrated with EFTPOS and ordering, giving control over ordering back to the retailer. The system links to other systems for inventory management, marketing, accounting, and tax. For example, it can be linked to the Quatro ordering system.

Radiant Systems tailor systems packages of software, hardware, integration, implementation, and support. The range of solutions is flexible and powerful enough to suit the needs of a wide range of retail requirements. Specialised reports on turnover, margins, and the effectiveness of combinations and promotions can be set up. The system can be programmed to prompt the operator about combos and special offers. With the addition of a separate decision support module the system can alert the operator to problems such as cash shortfall, and give work flow instructions. "Systems can be used to help people perform better and turn information into meaningful actions," says David Farmer, Business Development Manager, Radiant Systems.

Retech Global writes software for POS, stock management, accounting and tax, and e-ordering. Specialising in hospitality, grocery, convenience stores and corner stores, all communicate with Retech Global's back office stock management applications. The package includes customer management, shelf label management, and price and margin software. It allows for e-ordering and can be integrated with warehouse applications. Systems interface with the common accounting packages.

Scanning Systems Australia's Profit Track system provides a detailed knowledge base of what is on the shelves at what price. The software was developed to manage margins and control stock in convenience stores and grocery. Using portable data entry (PDE), information is loaded into the system, and maintained with rotating stock-takes. Systems that provide comprehensive management information can be based on either cash register or PC-based open POS systems. The systems are based on the principal that margin control is more important than stock control. "Most businesses suffer a drop in profit of around 0.75% of turnover from mistakes made with the price marking gun, and around 0.3% from entering prices on keyboards rather than scanning," says David Hagen, Managing Director, Scanning Systems Australia. "Scanning equipment will cost you less than the ongoing cost of marking items for most small stores." The system can be set up to differentiate between a cold soft drink and a warm item off the shelf, as well as tailor customer loyalty programs with instant rewards.

Point (of sale) number 2 - how well connected?
One of the most important decisions to be made is the extent to which the system is 'open' or 'closed'. Open systems, usually PC-based, windows-based and connected to the internet, allow immediate electronic transfer of information between processes. They facilitate the evolution of new trends in management, in particular e-ordering and web hosting.

Electronic communication with suppliers facilitates cost-based margin management. For example, Scanning Systems Australia uses the electronic feed of cost price and other detailed product information as the basis of its margin management system. "A margin based on a warehouse cost price gives the retailer greater control," says David Hagen. "He can adjust the selling price around the recommended retail price for individual items or across categories. The margin can be adjusted for slow sales and to take advantage of specials and promotions."

Open systems need a PC in the back office, but not necessarily in the front at the point of sale. For example, Retech Global's web-hosted C-store management package is available in both cash register and PC hardware options.

Point (of sale) number 4 - be well supported
Key components of an integrated system are training, ongoing support and maintenance. "Training is vital in the first six months. This is when most faults are due to operator error," warns Dominic Corkeron. "The training needs to be ongoing, and preferably there should be someone permanent who knows the system and can train new staff," says Milos Strugar, National Relationship Manager, Retech Global. Take time to understand what the system can do. Before you do, find out how much time it takes to learn the system. "For a new user, it is most important to choose a product that will receive ongoing systems support. If you have only one checkout point, and one POS machine, you can't afford any downtime," adds Doug Brown, National Marketing and Pre Sales Manager, TEC Australia.

Point (of sale) number 5 - think of the future
Eventually, nearly all transactions will be electronically processed. If the underlying management practices are in place, this will make the store more efficient.

The next big shift is to wireless and mobile technology. Theoretically, on a very hot day, you could sit in the shade of an umbrella on the footpath outside your store and change the margin for the sun screen category on a hand-held machine. This change would flow through the POS at the checkout, the electronic shelf label in the aisle, and to the inventory management and accounting systems in the back office. Your web-hosted computer screens could remind customers of the need for the product on such a sunny day, and as stocks run low, automatic orders would be sent to your supplier. All while you personally invite customers into the cool of your air-conditioned store.

With so much new technology on the way, an important feature of any system is the upgrade paths for both hardware and software components. "Often when a retailer is familiar with the system he wants more in terms of back office reporting, says John Delandro, Business Development Manager, ExtraPOS Solutions. "So the system needs to be able to be upgraded and expanded."

And, don't forget to look good. "Another trend is a heightened sense of aesthetics. Small, sleek components in fashion colours add to the shopping experience," says David Farmer, "The trend is for less clutter on the counter."

Point (of sale) number 6 - value matters more than cost
This section is not meant to be a comprehensive price list, rather a rough idea of what you might expect to pay for different levels of POS systems. A typical hardware combination can cost anywhere between $2,000 for the basics to $10,000. Similarly, a typical software combination falls in the range of $2,000 to $5,000. Separate technical support and ongoing training and maintenance can be as much as $1,000 to $2,000 per year.