With all the talk of “Big Data” lately – how machine learning, statistics and customer data is more abundant and more useful than ever – it can be a little daunting to know where to start and how to make retail analytics actually useful to your business.
Ultimately, the value of the data you collect depends on your ability to turn that data into actionable insights. As we’ve pointed out before, independent retailers don’t need big data, they just need data.
So here are six reports you should be running using your point of sale software (POS) that will allow you to take action to increase your business profits and to win more customers.
Note all the reports we mention below are available with AirPOS.
There’s no more laborious task for an independent retailer than managing inventory.
Tracking inventory on paper is not only inaccurate but a massive sinkhole for your time. There are 2 inventory reports that are super helpful for retailers. Low stock and inventory in stock.
A good ePOS software will have a report tracking your inventory and will update in real-time as each item is sold, allowing you to stay on top of your stock levels, and let you avoid running out of key items at the wrong time.
On top of that, our customers tell us that this automation alone saves them on average 2 hours a week in admin time. And that doesn’t even take into account the peace of mind that an automated system gives you — you can simply stop worrying about whether you have an item in stock or not. It’s all right there at your fingertips.
We also hear that getting rid of the paperwork normally associated with stock-taking and replacing it with a tablet makes for a much less stressful experience come stock-take time!
‘X’ and ‘Z’ reports
Even the most basic cash till has some ability to print off your “X” read, or cumulative total for the day so far. But with an ePOS software, you can get a breakdown of the items sold, and which of your employees sold them, so you can be sure the till matches what’s been sold.
That’ll give you a quick insight into a particularly hot product on that day, and allow you to head off any inventory shortages.
A “Z” read should be run at the end of every shift, resets your drawer to zero, and give you the day’s totals.
Both of these reports tell the story of your cash drawer activity and what your employees have been doing at the register. Although mistakes will always occur, being able to monitor any occurrences of voids, discounts or other unusual behaviours by employees at the till will help avoid any possibility of purposeful theft and the massive effect this can have on your profits.
You can also use these reports to get a running tally of your best-performing employees.
Best Selling Items Report
Instincts are what make good businesses great, and trusting your gut is one of the most underrated decision-making tools around.
But one of the best uses of data is when you listen to your gut and then back that up with data before making a choice.
We use that all the time here at AirPOS — we call it “sanity-checking”. “I feel this is the right decision, I really believe it, but am I crazy? Where can I go to check actual data that’ll back up, or allow me to question my decision more rationally?”
At the end of the day, you know how your business works best, but just because you feel that a certain item is really popular or will sell well sometimes doesn’t make it so.
With a Best Selling Item or product performance report, you can quickly and easily check data on items sold to see what’s selling best and use that to improve your ordering.
Better yet, when you’ve built up some data over a busy period (Christmas, for example) you can use that same data to plan for the same period in the coming year.
Buy more popular products at a lower rate in bulk, make sure you don’t run out of anything that’s sure to sell well and decide on what to feature and display. All of this will have a major impact on your bottom line.
There are 2 really great sales reports that can help your business. The sales summary report and the sales category report.
Sales Summary Report
The sales summary report gives you an overview of your overall business health. Are you making more sales than your expenses? The sales report can help you see cost of goods sold, gross profit, product margins, and tax. You can also use these reports for comparisons, check week on week, month on month, and year on year reports to see if the business is growing and even to find out when sales are best and worst. This can help you improve your sales strategy. You can try a sale when you know that certain parts of the year perform poorly, this can help bump up your bottom line.
Product Category Report
In a similar way to the Best Selling Items report, grouping products into categories can be really useful.
Let’s say you have a feeling that your “Cards” category is doing much better than your “Gifts” section. Your “Best Selling Items” report is showing that your top 5 best-sellers are in the “Cards” category.
Running a category report might show that, although you’ve sold many more products in the “Cards” category compared to “Gifts”, the overall profitability of the “Gifts” category is much higher, due to the higher margin on the products. You could use this data to make changes to your store’s layout to reflect this.
Better yet, you could then easily monitor the results of your changes using the “Best Selling Items” and “Category” reports. Did your changes have the desired effect? Has there been some unforeseen change in customers behaviour due to the change? It’s all easily understood and optimised using these reports.
Report by store location
Running more than one location, or even two till areas in the same building, can give you really valuable insight into where your customers like to shop and how they like to buy from you.
Perhaps you could try setting up a second device and have an employee engage customers on the floor. You could then monitor sales from that device to see if it’s something that might be worth investing in the long-term.
Or what about putting another till point closer to the door, or in a busy part of the store, to see if queue-busting increases sales during busy periods? With a tablet-based ePOS, it’s easy to be flexible, and with location reporting, it’s easy to test ideas and monitor their effectiveness with a Report by Location.
With customer reports, you can understand more about your consumer behaviour. What products are customers buying and when? Are there any correlations or potential relations. If you’re collecting customer information you can pass it into your customer relationship management (CRM) tool which can help you market to your customers to drive buyer behaviour. Understanding your existing customers can help you acquire more customers in the future, as it can help you tailor your marketing. It can also allow you to increase your current customers spend by learning their buying behaviours.
Attracting new customers will cost your company 6-7 times more than keeping an existing customer according to Bain and Company. A 5% increase in customer retention can increase a company’s profitability by up to 75%.
So there you have it, the 6 reports that every POS system should have to help you grow your business. Are you currently running reports and utilising your POS system to it’s fullest? Do you have a POS system that empowers you to do more?
At AirPOS we aim to empower our customers with reporting, we have a reporting app which you can use anytime, anywhere to help you understand more about your business. Interested in learning more about how AirPOS can help you grow your business? Set up a call with our team for a free consultation today.