The retail world operates on a fascinating principle that can transform your business strategy: a tiny fraction of your inventory drives most of your success. This insight, known as the 1% Rule, demonstrates why selective focus is crucial for maximising your store's profitability. To get the 80/20 rule, that fact is that most retail slightly less than 1% of the products you handle typically generate 50% of your total revenue. It isn't just theory – a proven pattern that emerges across various retail sectors.

When I first saw this, it hit me like a brick.

I analysed a retail store in Melbourne with over 20,000 stock lines.

The analysis revealed striking results: just 220 products (about 1%) generated 50% of total sales. Even more remarkable, the top 10 items accounted for 33% of revenue, with the top two products driving 15% of all sales.

Product Performance Analysis

Your POS system is the key to unlocking these valuable insights. Regularly analysing your top-performing products reveals patterns in customer preferences and purchasing behaviours that can guide your retail strategy.

Now, let us find your top 1% stock lines.

Go to register reports and select the top stock report as marked with the red arrow here.

You will get this screen.

Now select your criteria. Note that there is also a tab called "More Criteria," which has more options, plus the traffic (which is people in the shop) option, but we will discuss that later.

I suggest you do this by looking at overall shop sales and then doing in-depth research for each department.

Here, I used the stationery department. In red, I put in 32000 to make sure I got everything. As I like to get a long-term view, I selected a whole year, as small periods can have major fluctuations.

Then you will get a report with all the figures.

It’s that simple

It can be done in less than a minute. 

Now you have them what can we do, well... 

Stock Management Priorities

• Implement automated reorder points for top sellers
• Monitor stock levels with heightened attention
• Adjust order quantities based on sales velocity
• Create buffer stock for your star products

Maximising Visual Impact

Display Excellence

Transform your store layout to showcase your top performers effectively:

• Position best sellers at eye level for maximum visibility
• Create prominent displays that draw attention
• Ensure easy access from multiple angles
• Cross-merchandise with complimentary items

Team Empowerment

Your staff plays a crucial role in maximising the potential of your top performers:

• Share detailed product knowledge
• Provide specific merchandising guidelines

Common Pitfalls to Avoid

Understanding what not to do is just as important as knowing what to do:

Inventory Management Mistakes

• Running out of stock during peak periods
• Failing to maintain adequate safety stock
• Neglecting to analyse seasonal patterns
• Overlooking complementary product opportunities

Analysis Oversights

• Assuming past performance guarantees future success
• Focusing solely on revenue without considering profit margins
• Neglecting to analyse why products perform well
• Missing opportunities for product bundle creation

Implementation Strategy

To harness the power of the 1% Rule effectively:

Taking Action

Transform your retail success today:

Conclusion

Remember, retail success isn't about managing everything equally—it's about focusing your efforts where they matter most. By understanding and applying the 1% Rule, you're managing your store and optimising it for maximum profitability. The data is already in your POS system and waiting for your use. The only question is: Are you ready to use it?

Frequently Asked Questions

Q: How often should I update my top performer's analysis?

A: It only takes a minute to run. Consider making it a monthly review. A regular review helps you spot trends early and adjust your strategy accordingly.

Q: What if my top performers change frequently?

A: Fluctuating top performers often indicate seasonal trends or changing customer preferences. Use your POS system's historical data to identify patterns and plan inventory accordingly. This variability makes regular monitoring even more crucial for maintaining optimal stock levels.

Q: Should I focus only on revenue when identifying top performers?

A: While revenue is essential, consider using profit and sales numbers. High-revenue items often have low margins.

Q: How can I prevent stock-outs of my top performers?

A: Implement these proven strategies:

• Set automated reorder points in your POS system
• Calculate safety stock levels based on lead times
• Monitor daily sales velocity
• Establish supplier backup plans

Q: What's the best way to merchandise top performers?

A: Create a dynamic merchandising strategy that includes:

• Prime positioning at eye level
• Multiple display locations throughout the store
• Cross-merchandising with complimentary items
• Clear, professional signage highlighting key features

As someone in retail my whole life, let's dive into how our POS software can give you a crystal-clear view of your business performance.

Monthly Comparisons: The Traditional Approach

Most people do their sales comparisons by month, and it works, but comparing sales periods can be a headache that way if trying to compare retail sales:

• Weekend wobbles: Some months have four Saturdays, others have five. This can throw your figures out of whack.
• Holidays: Not all holidays are celebrated on the same date in different years. For example, most religious festivals follow the lunar calendar.

Still, it does have some advantages:

• Alignment with financial cycles: Most businesses operate on monthly accounting cycles.
• Simplicity: Everyone understands what a month is, making it easy to understand.
• External benchmarking: Many industry reports are released monthly, allowing for easier comparison with broader market trends.
• Seasonal patterns: Most seasonal patterns align well with calendar months.

The Four-Week Comparison

I've found that comparing the last four weeks of sales to the same four-week period from the previous year is great for retail. Here's why:

• Smooth out daily hiccups: You iron out any unusual spikes or dips by looking at four weeks.
• Captures recent trends: This method gives you a snapshot of your most recent performance.
• Accounts for seasonality: Comparing to last year's period helps you factor in seasonal variations.
• Flexible timing: You can run this comparison whenever possible, not just at the month's or quarter's end. This is a massive plus for me.

Our POS System: Flexibility is Key

We've designed our POS system with these challenges in mind. Here's how it helps you cut through the confusion:

Custom Comparisons at Your Fingertips

Our POS Software lets you choose custom comparison periods. You're not stuck comparing fixed calendar months or years. Pick any date range that makes sense for you:

• Last Fiscal Year
• Last Year
• Last Quarter
• Last Month
• Last four weeks

Rolling with the Changes

One of our most powerful features is the ability to use rolling or moving time frames. For example:

• Compare the last 30 days to the same 30-day period last year
• Check how you're doing this year compared to the same point the previous year

Why Accurate Comparisons Matter

Having this flexibility in your sales reporting can be a game-changer. Here's why:

• Smarter decisions: Accurate comparisons help you make better calls on inventory, staffing, and promotions.
• Realistic goals: Understanding your actual performance helps you set achievable targets.
• Trendspotting: You'll see patterns in your sales data that calendar quirks might otherwise hide.

Making Your POS Data Work for You

To squeeze the juice out of your POS system's reporting capabilities, try these tips:

1. Regular check-ins: Set aside weekly or monthly time to analyze your sales data. Most people do this monthly.
2. Mix it up: Try different comparison periods to gain new insights. Doing it in the long and short term is a good idea.
3. Look beyond the numbers: Use the data as a starting point to understand the story behind your sales.

Wrapping Up: Your Data, Your Decisions

Remember, the goal isn't just to have data – it's to use that data to drive your business forward. With the right tools and approach, you can turn your sales figures into a roadmap for success.

Whether you choose four-week comparisons, monthly analysis, or a combination of both, the key is understanding each method's strengths and limitations. By being aware of factors like the varying number of Saturdays a month, you can make more informed decisions, set more realistic targets, and get an actual picture of your business performance.

So, dive into your data, experiment with different comparison methods, and watch your business thrive.

Frequently Asked Questions (FAQ)

Q: Why is comparing sales by month sometimes problematic for retailers?

A: Monthly comparisons can be tricky due to varying numbers of weekends and shifting holiday dates. This can lead to inconsistent data when comparing different months or years.

Q: What's the advantage of using a four-week comparison method?

A: Four-week comparisons provide more consistent data by constantly comparing the same number of days of the week. This method smooths out daily fluctuations and accounts for seasonality while offering flexible timing for analysis.

Q: Can I still use monthly comparisons with your POS software?

A: Absolutely! Our POS software allows for monthly and custom period comparisons. Choose the method that suits your needs.

Q: How often should I analyse my sales data?

A: We recommend regular monthly. However, with our flexible reporting, you can analyze your data as frequently as you need.

Q: What's a "rolling time frame" in sales comparison?

A: A rolling time frame allows you to compare a recent period (like the last 30 days) to the same period from a year ago, regardless of calendar months. This provides a current view of performance trends.

Q: How can accurate sales comparisons improve my business?

A: Accurate comparisons lead to more thoughtful inventory and staffing decisions, help set realistic goals, and allow you to spot trends that might otherwise be hidden by calendar quirks.

Q: Is switching between different comparison methods in your POS software difficult?

A: Not. Our POS System is designed for flexibility. You can easily switch between monthly, four-week, and custom period comparisons with a click.

Q: Can your POS software help with external benchmarking?

A: While our software focuses on your internal data, the flexible reporting makes it easier to align your data with external monthly reports for industry comparisons.

Q: How does the POS software handle seasonal patterns in sales?

A: Our software allows you to compare periods year-over-year, helping you account for and analyze seasonal patterns in your sales data.

Q: Is training provided on how to use the comparison features in your POS software?

A: Yes, we provide comprehensive training on all features of our POS software, including how to use our flexible sales comparison tools effectively.

I think retailers must verify orders with photos today. It is a simple yet powerful technique that is revolutionising how we handle orders. It involves photographing packed orders before shipping.

The Power of a Picture

Today, it's an all-too-familiar scenario: a customer claims they didn't receive all the items they ordered or got nothing. You have a shipping dispute. Without concrete evidence, these situations often boil down to an "I said, she said" dilemma.

A photo can help with your case. The courts do accept photos as evidence. Can taking a picture show evidence of what was in the parcel when it left your shop? Another picture of you sending the parcel. These photos can strengthen your case.

Photographs as evidence are extremely powerful when shown in court. People tend to believe what they ‘see’.

That's where the smartphone camera comes in. You're creating a visual record that could be used later by snapping a quick photo of each packed order before it's sealed and sent.

Personal experience

I was shocked when I sent some goods to a client. He replied that he never got them. The post office said they were delivered, but I needed help to prove what was in the box, which I could not. It was a wake-up call. Clearly, I needed some order verification.

Implementing the Photo Verification System

Here's how we've incorporated this practice into our order fulfilment process:

1. Pack the order as usual, laying out all items.
2. Take a photo using your smartphone.
3. Attach the photo to the invoice in our POS system so you have a record.
4. Seal and ship the parcel with confidence.

It's that simple. This small step has become an integral part of our shipping process, and the benefits have been immense.

A Word of Caution

While this system has been a game-changer for us, it's important to remember that it's just one part of a comprehensive order fulfilment strategy. It doesn't replace the need for careful packing, accurate inventory management, and excellent customer service.

So, why not give it a go? Grab your smartphone, take that first photo, and join the ranks of retailers using this simple technique to revolutionise their order fulfilment process.

Your point-of-sale (POS) system can give you crucial information that can help you drive your retail productivity, accuracy and profits. To do that it needs accurate information. Are you getting good information? One key retail metric (KPI) often overlooked to reveal how efficiently your POS system operates is the scan rate percentage %Scan.

Luckily, your POS Software can give you this and show you how to improve this.

Why the Scan Rate Matters

The POS scan rate (%Scan) shows the percentage of products scanned compared to the manually keyed-in at the cash register. A high scan rate translates directly into faster transactions, shorter checkout lines, and happier customers. It also results in fewer errors and less waste that hurt profits. Manually entering product codes is slower, more demanding on staff over a shift, and inevitably leads to mistakes. The industry standard is that cashiers make around one error for every 300 characters typed daily.

In contrast, scanning barcodes with a POS scanner takes just a fraction of a second and is a million times more accurate! The higher your scan rate, the more transactions you can process, lower errors, and provide better customer service. Better product information captured during scans also gives you valuable data for purchasing, promos, inventory and more.

Checking Your Scan Rate

Finding your current scan rate percentage is easy using your POS reporting. Go to the cash register reports, open the Sales section, and select "Dissection Sales/Profitability for a Given Period".

Go to the cash register reports.

Then go to sales.

Once there select

Dissection Sales / Profitability for a Given Period.

Now run the report with a year of data.

You will see a column with %Scan; the higher, the better. Looking through this list, the problem department is marked with a green arrow.

Run it for at least the past 12 months to see trends. The %Scan column reveals your overall rate across products and departments. Ideally, you want to see your scan rate consistently above 90% for maximum efficiency. Look for low percentages that stand out. While the overall rate matters, drill down into individual departments and product categories in the report. This allows you to pinpoint sections of your inventory that need scan rate improvements.

How to Boost a Low Scan Rate

If your scan rate is low, identify underperforming departments or products lagging in scanning. Then, focus on addressing the root causes:

• Missing barcodes - Confirm all inventory has scannable barcodes printed and attached. For any products without barcodes, quickly print and add barcode labels.
• Faulty scanners - Your barcode scanners may be aging or defective. The industry standard is that a scanner is built to last about three years, and then you have a bonus.
• Staff training - Cashiers may need refreshers on scanning techniques and procedures. Observe them on the POS and provide feedback to build good habits.
• Product database - Check your POS system to ensure the product database matches all items to the correct barcodes. Add any new products that are missing.
• Check items - Sometimes the barcodes are not clear, if so notify the supplier and consider using inhouse barcodes until this can be fixed.

Scanning Drives Retail Success

Improving your POS scan rates pays for your bottom line. It reduces wasted time and costly errors while increasing transaction speed and customer satisfaction. Make it a priority to monitor scan rates, identify underperforming areas, and address gaps. Turn your POS system into a competitive advantage!

TitlePage is the primary Australian book industry pricing and availability service. Use of it is free.

"With more than 1,250,000 titles listed from over 170 publishers and distributors, TitlePage is a comprehensive resource on the books and resources available in Australia.

TitlePage’s price, availability and bibliographic information is available to users 24/7.

The ability to access the service outside normal business hours and on weekends improves the service bookshops and suppliers can provide to their customers, and saves them time and money in dealing with enquiries."

Recently, many changes have been coming to the titlepage system. As such, we have had to make extensive changes to our software. If you use the titlepage program, you need to do a fresh set-up in our POS software.

If you use titlepage or want to use it please get in touch with our support lines to set it up. What we need is your account details first; this is available here.

This is the best way of issuing receipts through your client's bank account using DTI. It is also cheaper as you do not have to print paper receipts.

This is what it looks like.

This receipt has your logo and the sales details of the transaction required by law.

It is now the most advanced receipt format (DTI) available to retailers!

One significant advantage is that, with DTI, your customers can see their receipt in their bank account. So a verified copy of the receipt is always available to them. This saves you time.

Some other advantages would be

* You do not have to print the receipt.

* Free SMS or email sending of receipts

Forgery and misuse.

It is much harder. For example, a person grabs a receipt from a rubbish bin and tried to claim it in your shop. They now need to show how come this receipt is not from their account. If they want to argue well you have a verified copy of the receipt from a bank-approved secured server stating who purchased it.  

Let us know if you want to try DTI, free?

More than else, what a retail business needs is fast action at the point of sale. There is too much danger of people leaving if your counter is slow.

This Christmas is evident that people do not want to wait. Each second is a demise for retailers. The more it takes to be served, the more your client keeps thinking about whether they genuinely need your things. Plus there is the worry of COVID.

You want a fast checkout.

Here is ours, the quickest one I know.

See the image above and see where it is marked in green. Transactions were being done at a rate of four a minute. 

Using our system, your payment times will accelerate. Therefore, their queues will be considerably reduced.

If you have our POS system and use XChangeit in a Tatts outlet, you can now sign up for the Tatts Terminal Connect integration.

This allows the scanning of a unique barcode produced by the Tatts terminal. Once scanned in your software, this barcode creates all the customer's games in the Tatts transaction. This means you no longer have to scan and check-in each ticket separately, saving a lot of time.

You will need to get the signup details from XChangeIT and then call us to install it.

A receipt like this below can be generated by your customer from their bank account.

Using this you can say goodbye to paper receipts.

As you can see, this has your logo as well as the sales details of the transaction. It does not have to be a bank transaction as this receipt can be produced on any payment type: cash, EFTPOS/Credit, Bitcoin, etc. 

Formally it is called DTI, and it is the most advanced receipt format available.

There are other more significant advantages to the retailers too with DTI besides that a customer can see this receipt from their bank account. 

Some other advantages would be

- A copy of the receipt does not have to be given to the customer.

- Free SMS sending of receipts (This function is coming in a few days) 

- A verified copy of the receipt is always available to the customer

- Misuse of a receipt is more challenging. Say someone grabbed a receipt from a rubbish bin and tried to claim it in your shop. Now that person has an added problem. They may need to show how come this receipt is not in their account. 

- Similarly, a forged copy of receipts is much harder as a copy is available on a bank-approved secured server.  

It will be available on Monday for our clients free. 

Let us know if you want to try DTI?

If you are going to to use Australia Post as a delivery agent if you require your goods to arrive by Christmas, then you better send it now. Even with Express post would be the latest you could send it. When I rang up on behalf of my clients, I was told the bushfires would not be an issue, and then they referred me to their calculator. 

Of course, the claimed delivery schedules and actual arrivals do not always agree.

I would suggest that you set our software delivery options to reflect this.