Studying The Science of Retail Since 1979

The Link between POS Throughput and Sales It’s Black Friday tomorrow! Now I know, Black Friday is the huge shopping day after Thanksgiving in the US (and seems to be gaining popularity here in Canada), but it’s so much more. That retailers and restaurant owners often don’t understand the greater importance of this day is more than a little surprising. Whether it is Canadian or American, the symbolism of Black Friday for retailers and restaurant owners needs to be clearly understood. In addition to being a big shopping day for brick and mortar stores and online retailers alike, Black Friday is the date that accountants say retailers stop being in the “red” for the year and begin making a profit – or are in the “black”. That retailers operate for 11 months of the year at a financial loss is a mind blowing concept that many people have a hard time coming to grips with. Black is Good Black Friday seems like such an ominous term. Too bad it can’t be Green Friday… it sounds nicer, and more like money… but we Canadians don’t have green money… Oh well. Black Friday it is and we should be glad for it. If nothing else it’s a date on the calendar which seems to give us permission to pull out the garland, play carols over the loudspeakers, and start those Christmas promotions rolling. It gets customers excited about the Christmas season, even if they’re not quite ready yet. So it’s a calendar date you should mark every year as an important reminder of your need for POS Readiness. What is POS Readiness, you ask? Have you taken the required steps to review your POS and make any necessary improvements and do the proactive maintenance on your point of sale system to ensure your Christmas season hums along profitably? Let me put it another way: If your profit for the year is earned over the next 4 weeks, it means that customers are going to spend more money over the next 4 weeks than they have all year. Ideally, you want them to spend a lot of that cash with you. Are you ready to take advantage of it? Remember, failing to plan is planning to fail. Do NOT Make Customers Wait I can’t stand waiting to spend my money. In fact, I won’t. I have too much to do, too little time to do it, and zero tolerance for wasting time being made to wait for a retailer. If I walk into your store or restaurant and see a line-up I may turn around at the door. If I don’t turn around and end up in your checkout line, during my idle time waiting I start thinking about what is not being done while I’m waiting or what I have to do next. Make me wait too much longer, and if I don’t really need or want the item you’re selling me, or I think I can pick it up more conveniently somewhere else, I’m gone. This is death for a retailer. If I happen to find it at the next place easier, faster, and it’s cheaper or better, I’m probably gone forever. I’m not alone in this behavior. A recent retail time survey done by Great Clips, a Hair Salon chain, recently determined that your customers are not willing to wait long either – 5-10 minutes or less is considered reasonable by 94% of respondents. Any longer than that and they think your business is poorly run, or worse, that you don’t care about their business. Long wait times was ranked 2nd by those surveyed as the thing that annoyed them most – it was a close second behind “rude staff” which was ranked number one. Study Your Lines Take an honest assessment of your lines – if you haven’t opened your retail store or restaurant yet, look at the lines in the stores of your peers, and by lines, I mean the line-ups at the point-of-sale terminals or cash registers. Are they long? Are they too long? Get a stopwatch out if you have to. Do customers have to wait longer than 5 minutes to spend their money with you? To solve this you need to take a good hard look at your point-of-sale system. Do you have enough POS terminals to serve your customers at the busiest times of your year? In my experience the answer is no. That’s because most retailers tend to say the same thing when investing in point-of-sale, “We’re not that busy Monday to Friday, we really just need it for Saturdays,” or my seasonal favorite, “We’re only open from this date to that date, we really don’t need it during the rest of the year.” If there was ever a formula for retail or hospitality failure, that most assuredly is it. Most people buy their cash registers for the first 11 months of the year – and they think they can coast on what’s “satisfactory” for the most crucial periods of sales. You can’t. Not if you want your business to thrive over the long-term and have a loyal customer following. Let me put it another way. If you wanted to move a pile of something from the front of your store to the back of your store, would you get it there faster and easier if I gave you one wheelbarrow or two? Now think of your POS system – your cash register – as your financial wheelbarrow, and you need it to carry the money of your customers from their pocket to your pocket. It’s mission critical – you can’t do it effectively or efficiently without it. It’s one of the simplest principles in retail – the more POS you have, the more money you make. You will find that more POS terminals increase your non-Christmas sales too. Why? If you’re a restaurant your table turns happen faster due to the increased efficiency and redundancy, so your customers are more likely… Read More