What is driving retail today is information. A few days ago, I talked of the 1% rule. Let me show you another example.
Taking from the ATO benchmark study they give what I consider the best benchmarking figures for typical businesses in Australia today, so I picked a stationery shop just because it is something most of us can quickly get our head around.
Putting in typical figures for their figures, I made this chart.
So here what I am saying is that on the first column So on 150,000 turnover a business from the chart would have about 78% expenses leaving it with about $33,000 profit and I did the same on the other rows.
Okay now let us say that these businesses make a 1% improvement, so they sell 1% more and they reduce expenses by 1%. What do you think the effect will be? I think you are going to be surprised.
Look at 1% did?
What is clear is that you do not need much to do dramatically better. All you need is 1% better.
So how do you get 1%?
- Information, here are some ideas in no order
- Speed up the queues by making your point of sale faster by increasing your POS sale scanning.
- Find out your best sellers and move them into your best selling locations.
- Better and more accurate buying.
- Getting a better loyalty program going just using a simple customer birthday marketing offer helps a lot.
- Monitor your theft rate
- Speed up your computer processing by getting your suppliers to automate
- Controlling your debtors better.
All this is available from your computer system now.