Shiny new software, look before you leap!

The credit card compliance issue has forced many retailers to consider upgrading or replacing their POS software. If it’s been a while since they looked at new software their seeing systems that offer a wide range of new features and modules. Their seeing more robust reporting capabilities, advanced CRM and customer loyalty, Omni-channel, buy it online or at any store and have it shipped or pick it up at any store.   In addition slick new mobile POS options, advanced promotion management and integrated open to buy to name new a few of the new features. The process can be a bit overwhelming unless you develop a realistic plan. Here are five key things to consider when thinking about a new system with all these advanced features.

  1. Which of these new features is relevant to your business?
  2. Which of these new features can you realistically implement?
  3. Do you have the internal resources to manage the execution and implementation of these new features?
  4. Develop a priority list focusing on the features that will provide the best return on investment for you r business.
  5. Develop a detailed timeline assigning tasks and benchmarks to specific people to monitor the phase in of each phase of the implementation.

The shiny new software is only worth the investment if you have a plan to utilize and get a return of your investment.

To decouple or not!

With the adoption of the EMV standards looming and the liability shift coming with the new standards the smaller independent retailer has to make a decision soon on how to comply. To be clear non compliance is not an option. Since most tier one retailers have implemented encryption data breaches will go downstream to the smaller less secure retailers. The option most retailers are considering is to upgrade or replace their POS software to meet the new EMV standards. There is another viable option for retailers who don’t have heavy transaction volume. That option is to “Decouple” their payment processing from their POS system. Get standalone payment terminals that are fully complaint to deliver encrypted data to your processor. Many of the devices will also take PIN entry and some the mobile wallet payment options.
The downside your transaction time will take a bit longer the upside is you will totally complaint and secure and possible even qualify for lower transaction fees. Something to consider!

Six takeaways from NRF, the toy store of retail technology

This year’s National Retail Federation Show was jam packed and alive with activity. From a “What’s New” perspective there was nothing that blew me away but there were some refinements and enhancements of existing technology. The major focus was “Customer Connectivity”, both in the store and out of the store through mobile device integration. Connecting to customers using digital technologies was a major theme of the show.
The five takeaways that I think are most relevant and doable for the independent retailer are the following:
1. Digital receipts: As a marketing tool: Millennials prefer digital over paper receipts and they are an easy way to get email addresses. You can include marketing messages on receipts making them a valuable marketing tool.

2. Digital coupons: If you’re going to communicate with younger more affluent shoppers their mobile device is the way they receive and send messages. Digital coupons provide a fast efficient way to offer targeted promotions to specific customers.

3. Digital signage: Has become a highly effective way to communicate with customers while they are in your store. Manufacturers have professionally done content that you can use to highlight and promote their products.

4. SMS and text Push Marketing: This has to be permission based but provides a way to quickly announce an event, new product arrivals and special sales.

5. Mobile POS: Another tool to provide better customer service, product searches and in some cases streamline the checkout process.

6. Mobile Wallets: Mobile Wallet acceptance is going to grow very quickly especially with the major push by Apple. As a retailer you need to be sure the devices that will accept the new Chip based credit cards for EMV compliance will also process mobile wallet transactions.

Set it and forget it!

Ron Popeil made the phrase “Set it and forget it” famous on the infomercials selling his Ronco Rotisseries. The phrase made sense for that product but unfortunately it’s become the way many people manage their POS system. When they initially install the system they go the all options and check off the features they want to enable. Many of my clients call after the first of the year and want to discuss if there system can meet their needs going forward. Their businesses have grown and they need to adapt their system to grow with it. They typically have a list of features they feel are important going forward and believe their system can’t accommodate those features. The first thing I do is have them go through the system configuration options to see if in fact their system can meet those needs. More often than not there are options in the system that can meet these objectives, or at least get close. I realize this sounds simplistic but it makes sense to review your system configuration options every year rather than “Set it and forget it”. Try it you might be pleasantly surprised.

Seven things to consider for 2015

  1. Scrutinize your margins- Can you find department where you can increase them 1%-2%- Reduction in energy costs have created some upward price elasticity

2. Evaluate the security of your systems and take the necessary steps to protect your data

3.  Have a plan in place with your POS provider to ensure your hardware and software will be EMV compliant by the 3rd. quarter of this year

4. Evaluate your customer marketing strategies- are you properly utilizing social media. Your goal is to become more social.

5. Provide better customer service- This aspect of your business should be evaluated every. There’s always room for improvement.

6.Think mobile: Most (79%) adult smartphone owners have their devices with them 22 hours a day, according to IDC  Research. Additionally, 80% of adult consumers said they check their phones within 15 minutes of waking up every morning

7. If you plan to make expenditures in new software or hardware this year check with your account to see if Section 179 of the date code is extended for 2105

Section 179 is one of the most useful tax deductions for small businesses. It allows smaller businesses to deduct in a single year (instead of depreciating over time) the cost of tangible personal property they purchase and use for business at least 51% of the time. The overall investment limit reduces the amount you can deduct in any year by reducing the annual limit by the amount by which the cost of qualifying property exceeds $2 million for the year. Historically, the annual Section 179 limit was a fairly low $25,000. In an attempt to help businesses during tough economic years, Congress increased the amount that could be deducted under Section 179—from $128,000 in 2007 to a whopping $500,000 in 2010 through 2013. The limit automatically went back down to $25,000 on January 1, 2014 because Congress failed to pass a bill extending it to 2014.

Retail has become a race to the bottom!

We’ve survived Black Friday and now have gotten past Cyber Monday. It was easy for me I ignored them. The whole concept of these retail gimmicks is simply a game of chicken between the big box retailers and the consumer. In a classic game of chicken who ever blinks first looses, and in this case the retailers have blinked. No doubt there were some deals to be had on Black Friday but the consumer has become conditioned to the fact there will be more deals coming. Before the season started the financial networks were predicting that the “Big Box” retailers were going to focus on their margins this year and be less aggressive is discounting. I don’t believe that for one second.They began educating the consumer on the new their new retail model over a decade ago. The model was and is “we want to make our numbers and beat last year, margin be dammed.” They lured the cat with the catnip and now they can’t take it back. It has truly become a race to the bottom and with Black Friday sales reported as down from last year, it’s game on for the consumer. How low can you go!

The Gift that keeps on giving!

Many retailers have treated gift cards as an add-on on sale or incremental business. Gift cards are more than that, and should be displayed and presented to customers much more prominently. I have some clients who put up a holiday tree decorated with gift cards in a prime location near the checkout. Gift cards have become the gift of choice for both buyer and recipient. The buyer knows they are giving a gift that provides certainty and the recipient is empowered to buy exactly what they want. THE NRF projects that the average gift card purchase will increase to $47.87 this holiday season up from $45.16 last year. The retailer is also a big beneficiary of gift card sales. Consumers typically up spent and buy more expensive items since they treat the gift card as free money. Gift card redemption extends the holiday season since gift cards are redeemed after Christmas. Smart retailers recognize this and postpone post season sales to take advantage of this. The last benefit to retailers is that between 6% and 12% of the value of gift cards are never redeemed depending on the retail sector. Depending on the escheats law in your particular state the retailer can keep that money as long as they don’t put an expiration date on their gift cards. So if haven’t taken full advantage of the power of gifts give a try to this holiday season and you’ll be pleasantly surprised.

The value of an informed sales clerk

My cell plan is due to expire at the end of this month so I decided to pay a visit to local dealer and discuss my options. My mindset going in was the same as when I review my cable service annually, I skeptical of the process. The clerks are put in an unenviable position of trying to explain polices and pricing that are meant to confuse customers. The first thing that was explained to me was that if I didn’t come in to renew my plan it would be automatically renewed at the existing rate even though the new plans were more favorable. I’ve been a customer of this provider for about the past eight years and would have anticipated notification of the new pricing available to me prior to the renewal date.
The next issue was to discuss a phone upgrade for me and giving my phone to my wife. This is when it really got complicated with the various plan options. At that point I was informed by the clerk that I was eligible for a no cost phone upgrade or by buying it outright could receive a $300 discount on a $600 phone. Sound confusing? When I asked the clerk to run those options by me again to clarify the free phone versus the $300 discount option here’s the explanation. If I chose to renew my plan for two years they would bill the $600 cost my new phone over the twenty four months of new contract. So in essence the no cost phone upgrade meant no out of pocket cost at that point in time. Aren’t semantics great!
The lesson is simple don’t put your sales clerks in a position where they have to defend or explain store policies or pricing that are deceptive. The clerk at the cell phone store was well aware that she presenting a confusion at best pricing structure. This cell provider has devalued their sales associates and failed to recognize their value in creating customer loyalty.

The Mobile Payment turf war!

The news this week has been abuzz with the launching of Apple Pay and how its butting heads with Current C, the Walmart initiated payment solution. Both Best Buy and Target are also supporting the Current C mobile payment option. CVS and Rite Aid announced they will no longer accept Apple Pay. Therein lays the turf war. Certainly transaction fees are one of the issues but I think there’s another underlining issue, the control of customer data. Apple and Google which also offers a mobile wallet solution are both companies that have huge repositories of customer data. I think retailers are concerned that Apple and Google will get control of their customers purchase information and compete with retailers by marketing directly to those customers.

Don’t forget the front line people when accessing your POS needs

I’m in the midst of building a needs document for two clients as an evaluation tool for a new POS system. We are working together to gather all the relevant information on inventory, purchasing and receiving, the reports they use, e-commerce and customer tracking. All this documentation will be very helpful in developing a detailed system requirement document for perspective vendors. What typically are given short shrift are the needs of the front people on the sales floor. Building a comprehensive RFP requires documenting all the backend processes and procedures but in addition a lot of attention should be paid to the customer facing technology requirements. The competition for customers is more aggressive than ever. They want to be recognized are frequent shoppers, they want to be rewarded for their loyalty, they want product information available to them before and during the sales process and they want be able order online and pick it up at the store or have it shipped from another store. All these features are no longer nice to have requirements they are necessities in today’s super competitive environment. The front end or POS station is where the action is so pay close attention and document the features you need, that’s where the tire meets the road.

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