Simple reports and analytics from your point of sale software help you run your daily operations more efficiently. They give you important sales and inventory data over a specific time period, so you can see what sold and when.
To understand how this data can take your business to the next level, you need to have a more global view of your business. POS analytics may sound messy and complex, but they don’t have to be. And, you don’t have to be a mathematical genius to understand them.
Your point of sale software can tell you exactly how many items are on the shelves and in the warehouse, enabling you to know when stock is critically low or out. But, did you know that that your point of sale software can help you analyze your inventory’s total cost of ownership?
Total cost of ownership can tell you which supplier has the best pricing and services. Unfortunately, many retailers only look at their vendor’s per-item price versus cost per unit when making decisions about what to buy. A low per-item pricing can be misleading, because there may be hidden costs that you are unaware of.
How Well Do You Know Your Customers?
Retailers need to understand the cyclical nature of their customers’ purchasing habits. Knowing what your customers purchase and when they purchase it keeps inventory at optimum levels. One way to do this is to focus on separating your inventory into product categories, then create reports for average sales every month. Take a look at the spikes and dips in the data. If you can, take a historical look at the past three years to get an even better idea of your customers’ buying habits. This will help you forecast the busy seasons, as well as the slow ones.
For retailers with multiple stores, understanding the differences in sales between each store provides insight into your customers’ demographics and the local competition. If one store is underperforming in one or more categories, then you can do some research to find out why and how to correct the problem. This is store-customization, which allows you to treat your stores as a group, as opposed to individuals.
Next Up – Marketing
With all of your sales data, you can effectively target your customers with direct marketing campaigns. During the slow times, you’ll know when to advertise discounted prices. Then, during busier times, you can feature higher priced items in high traffic areas of the store.
Retail sales analytics can also inform a targeted-marketing campaign. Simply use the same product categories in your sales reports to find out which ones are underperforming. Then, you can use your customer email list to promote products within those categories. This is a very effective way to generate awareness, and improve sales. This also encourages customer loyalty.
Getting Your Employees Involved
Your point of sale software should also provide reports on individual employee’s sales performance. It’s important to know the products your employees are selling, because they may be comfortable selling only one category of products. Analyzing their individual sales reports may discover missed opportunities for generating more revenue.
Training your employees on bundling and how to upsell can increase their sales performance. Research has shown how employee training can drive sales higher. You can also ask them for valuable input on the sales data that you’ve analyzed and get them energized to do more.
With all of the recent changes in the retail industry, it’s important to be able to understand how to adapt. From employees to inventory and marketing, using retail sales analytics can improve every area of your business.
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