Strong retailers are on a continuous performance improvement program. In tough times, it's even more important.

Here are some tips on what it's all about. 

Having worked with more than 200 Australian retailers on marrying up systems with their operational needs, it is plainly obvious that the best retailers in the country have recognised that their technology plays a vital role within the management of the business.   

Effective technology within a retail business has become a mandatory management tool.  It identifies what’s selling, where, when, to whom, and by whom. It also tells you what's not selling and why.

It tells you how many units to buy, when to mark lines down, and helps you manage and plan the cash flow.  

Right throughout the buying process, and into the sales, accounting, and reporting systems technology plays an integral part in every aspect of a retail business. 

"You can’t manage what you don’t measure", so if you have some tough decisions to make, you need reliable evidence in order to make the best choice you face. 

Your systems need to give you easy access to key performance data about your business at the time you are making the business decision. 

Point of Sale systems must be capturing sales, supporting your loyalty programs, balancing your cash, and identifying how your staff members perform. 

Your store infrastructure must help you relate sales to traffic.

Your stock management systems must be identifying sales trends, and facilitating buying decisions based on prudent Open to Buy budgets. 

Your accounting systems should bring it all together so you have a good handle on profitability and cash flow forecasts.  

During tough times, retailers need to be vigilant about how hard their stock is working.  Every retail management software package, if it qualifies to hold that title, should be providing you with category performance statistics. 

GMROII a good indicator of category contributions - will identify your best return for your next dollar of inventory investment. 

Every retailer knows that building lasting customer relationships is absolutely critical to building a lasting business, but they often under utilise the leverage from the firm’s technology to build and retain customers. 

Retailers need to be interacting with customers according to their preferences if they want to remain relevant, and so building a seamless multi-channel strategy has become urgent during these times. 

And driving increasing conversion rates becomes more vital in a gloomy economic environment.  Poor conversion rate is an indicator that prices might be too high, sales skills are not good enough, your rosters are out of whack with demand,  the product mix needs adjustment, or promotions are ineffective. 

By pulling one of the levers and monitoring traffic flow and conversion rate, managers will identify where to focus for improved business performance.

There are a number of POS system indicators that can be used to drive sales staff in the right direction over time.  Analyse today’s position, and set a target for each store or individually, and reward the attainment of the target.  An example is Units per Sale to drive add-on selling. In fact managers need to keep their eye on a number of balls during challenging times:

• Wages to sales
• GMROI (Inventory)
• GMROL (Labour)
• GMROS (Space)
• Sales per m²
• Sales by hour and staffing by hour
• Stock Turn
• Weeks cover
• Sell Through
• Average First GP, Achieved GP
• Shrink to sales
• Markdowns to budgeted markdowns
• % sales of new lines (freshness)
• Top sellers, Bottom sellers
• Store ranking
• % returns
• Return on assets

Increasingly, winning retailers are investing in Business Intelligence tools because they recognise that the return on technology investments is potentially huge.   

If your information technology is not providing you with actionable information to help you make operational and strategic decisions, then you have to take remedial steps. 

It’s not always a case of investing in a new system.  Often, it’s a relatively small add-on, or investing in some training, or making some adjustments to the way technology is managed within the business. 

At Josem Consulting, we recognise that retailers need trustworthy external eyes to help with identifying the remedial steps to drive incremental improvements to their business performance. 

It’s an evolutionary approach rather than radical surgery.   Our services can provide a roadmap to help retailers use technology to drive business performance improvements. 

It might be to improve the value a retailer is getting from its current systems, or it might be to help a retailer develop new business capability from an investment in technology. 

We would be delighted to explore how Josem can make technology your most valuable asset within your retail business.