The POS can help reduce shrink, optimize staffing, increase profits, and provide the foundation for CRM.
Where is the POS gold mine? It's the t-log - the transaction log that captures detailed data on every POS transaction. The t-log provides a wealth of information that can help retailers transform the "sell side" of their retail operations. It can help identify and reward the most profitable customers, prevent fraud by monitoring the POS and reporting in real time, ensure the top sales associates are on duty when the best customers shop, and more.
This data provides the foundation for integrated applications that can boost revenue, provide key business analytics that allow retailers to analyze product movement and customer purchasing patterns, improve employee hiring and retention, and much more. Such applications, which focus on the sell side, will help retail organizations become truly customer-centric - and they can open up new avenues to increased efficiency and profitability. Consider just a few of the ways these customer-focused solutions can impact retail enterprises.
What if a retailer could ensure the best employees are always on hand when the best customers shop? Using t-log data, a retailer can analyze shopping patterns to determine the frequency and purchasing patterns of key customers, then plan employee schedules to ensure the right salespeople are on duty. Perhaps the best shoppers come in on Thursday and Friday evenings to make purchases for the weekends - the transaction data can help managers make optimum staffing decisions. The goal for the store is not to be overstaffed or understaffed, but to have the right staff in the store at the right time.
CRM (Customer Relationship Management)
For brick-and-mortar retailers, effective CRM begins at the POS, where transaction data can be the basis for developing successful CRM initiatives. At the simplest level, market basket analysis can identify product affinities that help retailers re-merchandise the store based on which products most often sell together. With the right information, sales associates can begin identifying customers by name and providing helpful information based on their personal shopping patterns. Take it a step further, and retailers can begin offering personalized sales incentives at the POS that increase per-customer revenue.
LP (Loss Prevention)
Inventory shrink is a serious and growing problem, which cost U.S. retailers $32.3 billion in 2001. More than 46% of these losses can be attributed to internal theft. However, POS-based solutions that focus on LP can take transaction data from the POS, analyze information to identify potentially fraudulent patterns, and alert fraud investigators based on user-defined conditions such as high refund levels, high item corrects, or unusual activity of specific SKUs (stock keeping units). One retailer that has deployed such a solution cut shrink by 34% and reduced the average cash refund fraud loss by more than $1,000. By minimizing shrink, retailers can focus on technology that can help boost sales and strengthen customer relationships.
These are but a few of the customer-centric applications that are moving store-based systems far beyond traditional POS. Retailers spent the past decade improving the efficiency of supply chain operations. Today, the focus is again on the store and improving the customer experience. Retailing has entered the new era of transforming the sell side. Customer-centric retailing begins at the POS, and savvy retailers will take advantage of new POS-based solutions that can help them anticipate, manage, and exceed customer expectations.