Bernard Zimmermann's blog

Do you have some slow-moving stock items?

Maybe you can cut back on their space to make more room for your profitable products?

I suggest that we do this in two stages. 

To begin with

Firstly let us find the items that are the slow movers

Go to Register reports > Stock > Slow moving Stock lines

Now call it up here

As you can see I am looking at the stationery department over a twelve month period for anything that I have sold less than $100 and am now stocking something.

Now out pops a report in this case of 81 pages of detailed information of all the items that match this condition in this case, we have almost $80,000 worth of worthless stock.

Now check them out, pull out what you do not want to keep and put in your sales area.

Once you’ve got this done

I suggest that you do a report of your top selling stock items and at those items that are selling well. A rule of thumb in retail is double the space of an item increases its sales by 50%. So the idea here is we are going to replace the marginal items with those that sell well.

Go to Register reports

Now select "Top N Stock Sales for a Given Period."

Now the following comes up.

Now put an appropriate period the default here of a day is not enough for this but I just wanted a quick report for illustration.

Out comes a report with the top sellers

Now, these products need to be checked that you have the right display for each of these products.

Note anything, not on this list you also need to look at as they are marginal..

The bottom line is this

You do not want to pay to a landlord for the space to stock items that do not sell.

Thinking about it here are some reasons why someone would pick not to have a loyalty program.

Much of these difficulties are particularly true in the set-up phase of the program

Costs

Our point of sale software gives you the tools you need to run such a program, but you will need to provide your customers' benefits to make it work. 

Work and skills

It is work.

You do not feel your organisation has the social media skills now days required to make it work plus the management expertise to make it work. It needs constant thought and fine-tuning to find out what is working and what is not working.

Customers' information

You do not feel that you can get enough peoples information to make it work for example you think you cannot get enough peoples email addresses. You need about 500 to 1000 people to gain critical mass.

Lack of time

Busy enough AS IS and they do take time to set up, and they will take time to manage. Based on our clients' comments, an hour a week. 

Commitment 

Once you have a loyalty program in place, they can be difficult to stop if they do not work out. Customers can get upset if they feel that you are cheating on them. Always remember if starting one that you do need an exit clause. 

The other problem can be if you feel that your organisation objectives may change shortly and you cannot make the commitment.

You have infrequent customers

We have a client in a holiday area, and they tell me that the people are always changing and that they see most of their customers for about a week or two and then they are gone. The locals are only a tiny part of their business. 

Offers cost you

The expected cost of the proposal is higher than the expected return. The overwhelming number of customers will buy anyway from you at your prices, so there is no point in offering any benefit as such as all it is doing is giving away value to my existing clients who is willing to pay full price.
 

So What Alternatives are there

Here are some ideas.

Nothing

Often nothing is the correct response. Why interfere with something that is working,

"If it is not broken do not fix it".

Discount vouchers

This is where you offer every customer a discount when they buy products in your shop at the next sale. Here is how to set it up in our system, which would give you an incredibly powerful discount voucher system.

Be warned that these discount sales programs are much more expensive then loyalty programs, but they do produce results. See here for numbers.

Guerrilla Marketing

If you are near a major operator that brings in traffic consider how to be able to piggyback on their operation. Let them do the work in getting customers coming to what you are doing here is trying to divert some of their traffic to you eg near a supermarket, a coffee shop might do well. 
 

Here is an idea, to speed up the queues - stop printing receipts. You can with our point of sale software send by email or print a receipt if the customer requests one.

Try if possible to get regulars to use the email receipt function so your POS system sends it automatically rather slow you down.  

Be warned:

The recent strong winds in South Australia showed that the resulting power outages could severely impact those without the necessary precautions even outside the affected area.  It is not just storms, I have had clients in a building with a faulty lift, electricity stopped.   

No power and a modern retail shop stop. 

Don’t worry. There’s a solution.

A UPS is what every retail business should invest. It will protect not just power outages; a decent UPS also stops brown-outs and most surges too (see explanation below for those that want the technical details) 

The problem

In many ways, surges are the worst because they can physically destroy a computer system. I have seen a surge that was so big it caused a monitor to explode, and the damage from the flying glass was so significant that broke the front window, hurt severely one of the staff and thus closed the shop for a few days. 

One point, I must stress, if you have a UPS, you need to check that it works regularly, that means every month, stop the power and see how it behaves. UPS often appear to work even when broken. 

If you are interested in getting a UPS, here are some tips

Explanation of power terms

The main problems with power and computers, in my experience, are these. They can all be linked for example   

Spikes generally happen when something like a lift engine breaks. What you get is a sudden increase in power. For a very short time, what you see is a dramatic increase in power. This can fry computer components. Then you get a  Blackout when you get no power as everything gone down. But while the Blackout is happening the computer experiences a major drop in voltage. This is called a Brownout. What this does is create a short burst of voltage in the computer to compensate. This burst can ruin the computer instantly.

  More information

There are many others problems which you can read up here.

I was stunned when I was told that a competitor released an article claiming that you should never use excel for stock to manipulate details but the Stock Manager tool. My first thought was this is *NUTS* and my second is that it is another attack against us when I was asked.  No, I was told, by one of their clients, it is in their newsletter too and you are not listed, see I will send it to you.

I couldn’t believe my eyes when I read it

We were not listed almost possibly as we have both the Stock Manager tool and the ability to export/import stock data through excel. So they probably know our users can do both. But my confusion grew as I read the newsletter article as I believe that one of the companies listed has a Stock Manager tool too as well as the ability to export/import stock data through excel. So I am not sure this is all about!

Having said this let me explain

A  Stock Manager tool allows you in your point of sale software to manipulate your stock details, which is very handy if you have thousands of stock items. An example might be if a supplier costs that are supplied by a particular distributor to you needs to be increased by a percentage%. While updating the costs you can also tell the POS system to automatically update the retail price by increasing the retail price by a certain formula say by keeping the same margin, by a figure or making them 30% or whatever.... There are lots of options there. It also very good for changing in bulk stock descriptions so for 80% of the cases its great and there is no point in using excel.

But there is always the 20% when it is nice to have excel and sometimes in 10% of the cases, it is needed. Here are some examples.

*  Some have no choice

Many suppliers today particularly small ones will issue, their catalogue in an excel format.  So many people that do not have a choice. They must have an excel export/import facility.

* You have still more flexibility with a spreadsheet, for example, you can specify every item description that contains the word pack or PK which is between $10 and $15 in retail price and has a cost over $5 is to go up in retail price by 30 cents and 2%. 

* Let’s look at another example:

Then there are people who handle gifts. What they do is download an excel spreadsheet for a location, then go over the items correcting and modifying descriptions and pricing details. They now want a quick and easy way of putting the figures back into their system. As there is no pattern or formula a  Stock Manager tool although it can be used is not the quickest way.

*  Here’s one company’s story:

Then there are people that have items that need some complex calculations for which excel is extremely useful for doing the calculations. Looking at a few excel spreadsheets that a cake shop that uses our software uses for a cheesecake there are 15 different ingredients listed, plus seven extras listed prep, gas, electricity, water, labour, slices and wastage.  Most of these extras calculations are quite complex and require their own excel sheet to properly calculate the costs for a cake. Similarly, the spreadsheet for the brownies has 10 items and the doughnuts have 8 items. As these costs vary the owner of the shop tends to update these figures frequently and sometimes daily as a big baking on Friday has different figures then a Monday bake. Once he does this they require the facility that we have to update their prices through excel.

I am sure many of you will come up with examples where this sort of flexibility might be useful.

In a nutshell

If you do not need it, then with us you do not have to use it but if you require to use excel, well with us you can. You have the choice.

Consider this

To improve bottom-line costs, what we need to do is identifying and cull the slow-moving lines. Hopefully, then you can clear the space out for something that sells or maybe fix the problem.

Let’s dive in

I suggest that you do it by departments, as it helps with the perspective and makes the workload manageable. 

This a step by step plan to help you find these items. 

Go to your POS Software> Register reports > Stock > Slow moving Stock lines

Now click there

I then selected twelve months and used as criteria as any line that sold less than $100 and that I am now stocking something.

So check these out:

You get a report that gives you a clear view of your current performance metric with slow-moving lines and extra information on these lines. 

So let’s get to work

Yesterday a lot of new information was put up, please feel free to browse our site as I am sure you will find much useful. 

Our goal with the redesign of our website was to make the information that we give to you easy to find; no functionality in your software is lost. However, with the new platform, we will be able to offer you more.  If you have any questions or comments about the site in general, or anything, in particular, please let me know.

Firstly switching off your system at night will save you money.  No point in having your equipment run if there is no reason for it.

It also saves your computer and hardware life expectancy as they are not switched on that long.  

The other issue is that it is safer as hackers tend to like to work at night when no-one is there to see them at work.

Occasionally you are going to need some tasks to run overnight for example once a month, I do a full virus scan overnight.

Finally, you need to make sure that you switch off the power or have a surge protector on your computer as a significant power surge can travel through the wires and wreck computers whether they are switch on or off. 

Here is a calculation of what you might save with electricity now it is up to you to decide 

The electricity cost of a computer, these figures are approximate as each computer system is different but when I measured one of my home computers it used 80 watts and the two LCD monitor used about 40 watts. If they were on all the time in one year they would have used every day, in a year they will use 365.25*24* (80+40)/1000 = 1051kw.  

In Victoria, we are currently paying about 28 cents per kilowatt-hour (kWh), for standard 'peak rate' electricity so assuming an energy cost per kWh = 28 cents. Your rates may be higher, for example, typically in In South Australia, the electricity rate is 42 cents.

My annual energy cost for this computer is 1051 x .28 = $294.54 for this computer, as I actually have a few more computers and a few laptops so it would be a lot more.  

Now assuming you turned it off you might save half. If you want to do an actual test here is a sheet to fill out