What you can do in your POS System is set a budget for each department? Now here is a quick way that works well how to calculate such a budget in a typical shop which will take you less than five (5) minutes to do. Of course, no shop is standard, but what do you want for less than five (5) minutes of work.

Divide the shop into nine segments, as I have done above.

Now on the top in black, you will see the scores 3, 2 and 1. This is because, in Australia, people tend to go to the left when they go into a shop, so the left of the shop is more valuable.

Similarly, on the side, you will see the scores 3, 2 and 1 in black. This is because the front of the shop is more valuable than the rear.

Now when you add them up, you will see in red the totals, which is the addition of the top and side scores.

Now, add another 4 to that area segment where most of the front counter is.

If you are setting a budget, you take the total shop budget. Your call whether you do it as profit or sales. Divide by forty (40) and multiple by that segment total, for example: if the shop's budget was $800,000 a year. For the bottom front segment, see green arrow its budget would be $800,000 / 40 x 6 = $120,000

Now there is one caveat: the very front of the shop is used for display and is a decongestion zone where people often walk through without thinking. This part varies so much in different shops that you must make your own value.

The quickest way to proceed is to run a totals report for the past twelve months. Now take your total sales and divide it by 40. Now multiple by its total above for each area segment giving you a figure for each area segment.

Now for each department, look at its area segment and note its figure. If three departments share a segment, divide it by three and use this figure on the report. If a department is in a few areas, add the figures up. Now see how its sales figures compare to these figures. Maybe you have some rearranging to do?

Now here are some key points using this analysis.

1) On the right of the diagram, you will see a thick line in blue. Once people enter your shop, most shoppers will turn to the left. Count the right (4+5+6=15 points) and compare it to the left value (2+3+4= 9 points)—a big difference in score. 

This left side is what we call your power wall, as this is where customers naturally end up. It is where much of a shop's sales occur, so make sure it looks attractive. Style it up. Have your high-margin items there.

You can see why large suppliers, e.g. card companies, want you to put their product on the right side of the shop. They have done this maths too.

2) Why do most retailers prefer the front counter on the left of the shop? The space is less valuable there.

3) Why do many retailers like counters on the back. Well, the area there is less valuable.

Have a go; I am sure you will find these five (5) minutes of work helpful.

Make your own mind up.

My previous article generated a lot of discussion with its conclusion that modern retailers needed a BNPL option and that layby today is, at best, minor. Not everyone liked my conclusion, but they are wrong. In modern retailing, BNPL is not going to be replaced by layby. There is no layby renaissance coming soon.

Here is a google trend of interest in layby vs the major BNPL providers over the past year.

In blue, you will see layby and compare it to Afterpay in red. If you want the exact figures, layby has 2% interest, Afterpay 74%, Zip 9%, etc.

Here is the latest report by Roy Morgan on BNPL.

Summary : The latest Roy Morgan Digital Payments Report shows 17.5 million Australians aged 14+ (82.8%) are now aware of buy-now-pay-later services such as Afterpay, Zip, Latitude Pay, Humm and Klarna.

...

The takeover hasn’t impacted upon growing awareness of Afterpay, now at 81.1%, up 7.7% points from a year ago in June 2021, and up a massive 47.3% points since September 2018.

 

Here is how it is breaking down today by usage.

Make your mind up. Read  the report, available from Roy Morgan 9027-digital-payment-solutions-june-2022

We do not see that a modern retailer can ignore these figures, so our advice is unchanged: you must investigate BNPL. Whatever you think of the Afterpay business model, most of the BNPL business now is there. 

The most popular loyalty program used by retailers today is probably stamped rewards cards. See some samples above

What it is, that a person comes into the shop and buys something. Every time they buy, they get a stamp, and after several purchases, they get something. It is an excellent method if you’re looking for a way to increase repeat customers and sales.

We suggest ten (10) stamps to the goal.

Here is a step-by-step approach that works.

1) Look for items with a decent margin and high demand, e.g. greeting cards, pet accessories, perfume, etc.

However, you can use it for anything. If you are stuck for ideas, consider using all purchases over $10. One problem here is if you try to knockout departments because they are low margin, you are advertising that the other departments are high priced. 

2) You need a design for your cards. Most printers can show you samples. Make sure you keep your brand image in mind, as each card is a simple and effective marketing tool that your customers carry. Select a design that is unique to your shop.

We suggest that it has twelve (12) spots to stamp.

3) Make a use-by date line. Unused points can be a real legal problem for a business. This line will be handwritten on the card.

We suggest a year

4) Select a simple, unique self-inking stamp that fits onto the squares of your loyalty card. This also has been shown to reduce fraud.

- Now, it is up to you if you integrate it into your POS system. There are some significant advantages to making it integrated.

-- It reduces fraud

--- It allows you to track your customers’ spending habits and collect valuable insight into improving your business.

--- Knowing their details, you can market your business to them.

5) When someone buys something on offer in the shop, offer them a card. If yes, they get one stamp for joining the item and one for buying. So everyone starts with two stamps. This gives them the feeling that they are closer to their reward as now they are 17% there (2 stamps out of 12).

We suggest you read it here.if you want to know the scientific reasons why we suggest this:

6) Once the reward is redeemed, they get a new card with one stamp credited for rejoining the program. Then they get another stamp for the free offer they redeemed. This overcomes this problem of them starting with zero as now they are at 17% again.

Give it a try and see how you go. Then let me know.

Ideas people consider:
a) Consider offering a smaller reward on the sixth (6) stamp. In practice, we have not found this to work well. 
b) People that buy on their birthday get an extra stamp. Never seen this idea used, but I think it will work.
c) Big purchases get two stamps. Since the purpose is to get people to buy, this idea seems self-defeating.  
d) Slow days get a bonus stamp. I can see it working well in many retail environments but not in others. Maybe have a chew on this one.

There is an old saying, "There is no going back."

Although BNPL companies' share prices and valuations are down, their products in the marketplace are still as strong as ever. Growth in BNPL, although slower, is expected to increase. Also, the market is expected to grow as many players like banks and apple are moving into this space. Whether the existing BNPL companies can exist as viable stand-alone businesses remains to be seen. Most feel these BNPLs will soon be absorbed into traditional finance companies and banks; however, the customers will not be significantly affected and will continue to buy as usual. What may change is that the primary decision to use BNPL will shift away from the store. The CBA system does not have any store input.

The belief that many retail experts had was that laybys would become more popular has not happened. Consumers are *NOT* turning back to layby, nor do I see retailers keen on going back to layby either. To a retailer, a layby sale, unlike a BNPL, is a messy problem sale. It has high administration costs, legal issues and high risks of cancellation. Besides, why should the retailer share the risk of bad debts if they can avoid them? Also, most feel that a typical BNPL customer spends more than a regular layby customer, so they want more BNPL sales rather than layby. Also, a BNPL is vested in pushing its client to buy, and they do bring customers; no one is pushing a layby customer to come.

Our advice is unchanged, offer layby for those that want it; your POS System can handle it, but make sure you can take BNPL. 

Do not create unnecessary problems for your customers to pay.

One caveat here, you need an item to cover your BNPL fees, plus BNPL often does put conditions on what you can do, e.g. some items cannot be sold under BNPL. 

The big problem is that after the lockdown many shops have restocked, so their new inventory is new.  So a common problem many have is amplified as they have old stock sitting for a long time without selling. Old stock is more challenging to move than new stock, so the odds are that this stock will continue sitting in your shop if you do not do something.

The first point is to identify this stock. Luckily you have an extensive system in your POS Software to help you find this old stock. 

Click here for a training video on how to identify such stock.

As a tip, it's best to run it into three-month, six-month and 12-month-old periods separately as each period has a story to tell. 

As a rule, this is how you should lay out your stock on the shelf by displaying stock in desirable and then price order.

The most desirable higher-priced items are on the left at eye level and next to that similar priced items. Below are the cheaper items again in order of desirability. The bargain-priced things are at the bottom. The layout should be designed so that a person looking at these items can see them all in one view. On the different shelves, signs mark the higher-priced and lower-priced items.

If it is a good selling category, then around them should be items that your POS system in its companion sales report show sells well with them. This is a well-known method of increasing incremental sales that all majors use.

In your POS software

Go to Sales-Register > Dissection Companion Sales by Period.

Try looking for an abnormally high number of products for other stuff that sells well there.

In this example (green arrow), you can see that there are quite a few extra sales that could be made by moving some other companies' chocolates close to Darrel Lea Chocolates. Darrel Lea may not like it, but so what...

Try and keep everything as uniform spaced are possible; otherwise, you have something that looks like a mess.

Today with the staff situation, many people have been hired with vision problems. If anyone in the shop has an eye problem,send them straight to the nearest eye doctor. No need for a referral and do not worry, Medicare rebates are available. Eye problems you do not want to take lightly. 

Recently I got glaucoma and lost 50% of my right eye. If it had not been for lockdown with COVID, it would never have happened, but it happened. I am not the only one. The eye hospital was full of people. We are getting older, our vision is starting to deteriorate, and many of us need to make changes to our screens to make them easier to see.

As everyone with low vision has a different problem so there is no one solution for everyone as everyone is different.

What I regularly do for clients is set the windows wallpaper to something dark. This makes the icons on the monitor easier to see. I try to remove as many icons as possible to make it less busy; the simpler, the better for a business computer.

If people must have a picture, I tell them to put it in the middle of the screen and have the icons on the side.

We also have a range of bigger screens for people with poor eyesight, which helps immensely.

If this is a problem for someone in your shop, I found this youtube that you should go over. It has many good ideas.

As a rule with some effort, we have been able to get over this problem.

Having two prices on one item is asking for trouble. Even if it is clear your intent, people will have problems.

This happens a lot. A typical example might be a sale item. After the sale, the retailer puts a new price on top of the sale price, but the sale price is still visible.

One client of mine got into an argument over this when a customer demanded a lower price claiming that she must sell the item at the lower price by law. She replied coldly, " I do not have to sell you the item at all." The customer stopped arguing but did not buy, so who won that argument? To me, it was an unnecessary argument.

This started a discussion and some research. As far as we understand the law, it depends on your terms and conditions; if they are not displayed, then there might be problems. It should state that you can cancel orders and withdraw products because of pricing errors. Also, you need to consider if it goes further is whether it was not an error rather than an attempt to deceive. In this case, this practice can lead you into a lot of trouble unnecessary.

Take the old price label off.

A printer problem has appeared in the latest Windows 10 update. It certainly had its share of problems of late. The problem has been that hackers looking at Windows 11 have found security holes not fixed in Windows 10. So Microsoft has been fixing many security holes to make it as secure as Windows 11. Unfortunately, some of these updates are harmful.

The big problem now for us now is the printers.

If you have not done the Windows 10 update, hold off for a while, as I am sure a fix will come through soon. We notified Microsoft, but I am sure that we are not the only ones.

If you are running Windows 10 and have problems with your printer, please try the following.

Firstly verify that it is this problem and not another problem so:

- Check that everything is in order, the printer cables, that it is properly connected and paper is in. 

- Switch off everything and try again. This often seems to fix everything.

Still got a problem, give us a call.

Too often, my clients miss out on sales as they are not prepared. Don't be disheartened; okay, this year fizzled, but there are good reasons for attempting next year. 

In business, you need to be organised.

I suggest you go over your diary and write your business's critical retail marketing days. Put in a check date when you need to get your stock organised, a date when signage has to be up, and the marketing day date. Your POS sales reports can give you many good ideas about what you need to get.

Here are the important key retail dates that every retail should know and plan for: 

July 2022 (Now)

- EOFY Sales
- Stocktake sales 

September 2022

- 4th Fathers Day
- AFL Final season

October 2022

- 31st Halloween‍

November 2022

-1st Melbourne Cup
- 25th Black Friday sales‍
- Christmas season begins

December 2022

25 Dec Christmas Day 
26 Dec Boxing Day sales
31 Dec New Year's Eve

However do not stop here, go over your business and I am sure you have important sales dates for your market space too.

eg Fashion shops - Winter sales (now)

Card sellers - 30 July – Islamic New Year

etc

I was reading this article THE OVERSATURATION OF POINTS PROGRAMS: ARE YOU TOO LATE TO THE POINTS PARTY where this expert on loyalty programs answers states, "Therefore, the simple answer is, no, you're not too late. However, one mustn't neglect the core elements that make a loyalty program successful when designing a points-based program."

I agree with him. Retail loyalty is not exclusive; customers can sign up for many customer loyalty programs; no reason why you cannot be in their group. Customer loyalty programs are now a popular way to keep customers.

The core element of modern retailing is DATA, DATA and DATA! The industry standard is that this loyalty data is worth 1% of turnover to a business. This covers a loyalty program's cost as it increases customer frequency of purchases, basket sizes and retention rates.

The loyalty program's value today is access to your customers' email (and SMS) accounts. You can use this to market to your customers. Think of it, it costs nothing to send emails, and the returns can be high. When we measured a simple birthday offer, it had a success rate of 25%. 

What is the problem with telling customers that you exist frequently?

The first point is customer loyalty software. This is essential for running successful reward programs. Well, you have a really good one in your POS Software here. You have various options in choosing programs in your software.

Please give it a go, and let me know how you travel.

Maintaining a strong customer relationship can give your business a solid base.

In reviewing your stock shrinkage, first, consider the four major categories. In order from highest to lowest, they are:

Employee/internal theft
There are bad people everywhere. No one knows your control systems better than your staff, and some take advantage of you. Dishonest staff will sell goods without being recorded. If I bet with you that one of my clients this month would call us about a bad employee, I would probably win. 

Shoplifting
Some shoppers do steal. This is particularly true of small items.

Sales errors, administrative and paperwork errors
Unfortunately, errors do occur. People do enter the wrong figures as they get careless and make mistakes. With computers, one error in a system often remains for all time. A special discount wrongly entered can result in customers getting a bigger discount than they should.

Vendor fraud or error
Unfortunately, it happens. The supplier, either on purpose or in error, makes mistakes. It does not seem to matter whether they are big or small; it happens with all. Again once it gets into your system, there will be problems. This is getting worse as we move from manual to electronic systems problems; we lose the extra layer of security in manual entry. Today if a supplier makes an error, it can get imported into your system without review. 

 
Your first prevention strategy for stock shrinkage is to review locations.

This is very easy to do in our POS system, almost trivial once you have done a stocktake. 

Go to the stock-taking section.

Now, look at the variances. 

Now review the places in the shop that have high values. 

A helpful practise here is to go to the area:

Now run through the stocklifting categories above. If it is in an area where only staff can go, warning bells should sound. 

Now imagine that you are a shoplifter. The fact is most shoplifters plan so:

*How would you do it? 
*Why pick this area? 
*Why were these goods picked? 

One client of ours had a relative come to the shop and act out being a shoplifter. It proved quite a useful idea.

Now consider moving items from there; moving mirrors, cameras, and shoplifting signs should be considered. 

Often minimal changes at no cost can result in dramatic reductions in stock losses.

Check out some of the cakes in the winners of the Cake Show.

What happened as we have many clients in cake and bakeries, as we can give them control over their bookings, production, stock management, components with formulas, product costs, and nutrition. So we got tickets to go to the Cake Bake Sweets Show. 

While there, I took some pictures of the cake finalist and just look at them. One of the big problems is that people are complaining about the prices of these cakes but look at the amount of work involved. 

Enjoy my pictures. 

This one came number two but I thought it was incredible, look at the detail.

This one came number one. Not exactly my taste but extremely impressive. 

Now you have reviewed your stock in your stocktake, why not put some aside to make a stocktaking sale. Other retailers now are doing that; why not you? If it works for them, why not you?

Now you can supplement these items with this fantastic report.

In the register reports > stock titled "Old Stock on hand by Date last received"

This will give you a listing of your old stock. 

The old stock did not do you much good. If it is old it is probably depreciating at about 30% a year, so after three years, it has just been written off. Of course the insurance, rental on the property, staff costs, etc. to keep it are not written off.

Was it better to count these old stock, than move it?

There is no excuse not to have a stocktaking sale to get rid of old stock now it's the annual season to do so.

Arbitrary coherence is a marketing technique used by some retailers. What happens is when people are faced with a product line they don't know will often select an arbitrary price to determine its value. A typical example is in gifts who knows what the price is of a gift item?

Now imagine in the shop there are two similar items:

1) $15 item

2) $20 item

Now you add a third item

3) $50 item

Studies show that by having the $50 item on display, sales go up as people buy more $15 and $20 items because the cost seems reasonable compared to the $50. This is true even if no $50 item is sold.

Works well even if the product is not in the shop for example when doing special orders. Start with the $50, then quickly mention the cheaper ones. 

Check out the video below if you want to think more about it and its business use.

Staying on top of your stock is critical to loss prevention. Hopefully, you have finalised your stocktake so we can calculate your retail shrinkage.

So why not do so now?

This is how you do it in less than four (4) minutes.

1) We need what your computer had for the value of your stock before the stocktake. If your point of sale is up to date, print out a report of your stock valuation before starting the stocktake. If you do not trust the figure in your point of sale software, then you can, or your accountant can give you an estimate. This is the (Perpetual stock value).

2) This comes from your stocktake and is the value of the stock you had after the stocktake. Your point of sale software will have this figure once you enter the stocktake figure in the stock valuation report. (Physically Counted Inventory Value)

3) What are the total sales of your shop less the non-stock items? E.g. if you sell touch gift cards, these are not stock items, so take them off your overall sales figure. Your total report should be able to give you this figure which is your (Sales of stock products)

4) Value of the damaged goods you counted. (Damaged stock value)

Now please do the following calculation.

Shrinkage% = ((Perpetual stock value)-(Physically Counted Inventory Value))/(Sales of stock product) x 100%

A familiar figure here is about 1.4%, but it varies generally between 0.1% and 6%.

Now what you may also want to look at is your damaged goods, these have a different story, and they can be a compelling story to tell too.

Damaged% = (Damaged stock value)/(Sales of stock product) x 100%

Once you get these figures, you will know how bad a problem you face. Now we know what we are looking at in my next post on this subject, I will discuss how to analyse further. To see how we can reduce this problem. It's a tradeoff as your loss prevention strategy must reduce loss without impacting the customer shopping experience.

Recently on our company blog, I published an expanded guide on properly handling software license transfers when a business changes ownership. 

This initial article provided a high-level overview of why licenses don't automatically transfer to new owners - and how oversights can lead to issues. But many readers requested more details on smoothly navigating this process.

So in the new comprehensive version, I dig deeper into topics and added a FAQ with commonly asked questions: 

Whether you are selling your current business or acquiring a new one, I encourage you to read this updated guide. 

You can find the full article with all the details here:

Let me know if you have any other questions as doing this right from the start saves immense time and trouble later on.

What is often a revelation to our new clients is how much they can save time and money from our rostering system. Unlike many, it unifies rostering into a single platform, permitting you to see your shop’s retail performance as you have never seen it before. It allows you to ensure there are enough employees on-site. What it does is it comes with a forecasting tool that helps you to organise accurate schedules. This ensures you have skilled employees available and shows you when they need to be at work. As it is centralised, it is easy to see who is working at any given time.

One report that I recommend you study while creating a roster is the traffic analysis report by the hour of your shop, which you will find above.

You can find it here.

Put in dates from a previous period that you feel will give you typical results for the roster you are trying to create. Now, you will get a colour-coded analysis showing the activity in the shop divided into four groups with red for the busy period. This graphically shows you when you can expect to be busy.

Why wait? Give it a try now.

The Only Way Is Forward

Today is the start of the new financial year. The business clock begins again. Now you will have figures for last year, making it the ideal opportunity to set your business objectives for this year as you can use the figures you have from the previous year.

Here are a few focuses, I recommend that you do

1) Reflect on how your year 2021/22 has gone - write a few points down. Measure the performance of your business with our accurate and efficient data reports. See what has worked out and what has not worked out.

2) Make a preliminary financial budget for the following year. Make it sensible and reachable as if it isn't; in my experience, it is futile.

3) Do a SWOT examination on your business? It takes five minutes to learn. I find it better to do it once and then come back a few days later to complete it. My mind seems to work on it, even though I do not think about it. You can examine what your Strengths, Weaknesses, your Opportunities and your Threats are. If there is enough interest, I am happy to do a webinar on how this works in retail.

4) Combining your preliminary financial budget and SWOT can help you set reasonable targets for this year. Write them down.

The more you plan, the better.

Although it is not required for our system, many will store a backup tonight that has their financial data for this year. They never know when this might be required.

I do not do this what I do is run my financial reports and store them by emailing my personal accounts these reports.

These reports will be

1) Debitors.

2) Creditors

3) Stock

4) Payroll reports.

Then I archive them in my personal email account where they will sit there for years just in case. You never know when you need them.