CategoryRetail management software

Retail occupancy costs are on the rise and try as retailers might to negotiate them down, in this property marketplace it is challenging to achieve the level of reduction or management that you may want.

This is why it is valuable to leverage your POS software to help you better deal with an increase in rent, an increase in occupancy costs.

In our Tower Systems POS software and in the training, advice and support that we produce our small business retailer customers, we help deal with the matter of retail occupancy cost.

We do this by helping the retailers buy better, turn inventory faster, drive more value from each shopper visit and manage business overheads, such as labour costs, more efficiently for the business.

Combined, following the advice and using the support that we offer, retailers can position themselves better for rising occupancy costs.

The occupancy cost of a business is the combination of all costs associated with leasing retail space. It includes the actual lease cost plus all outgoings plus GST. GST is included because of how the occupancy cost calculation us used, as a percentage of revenue, including GST.

Occupancy cost is typically the top one or two operating costs for an average local retail business outside of inventory cost. Labour being the other top cost.

Recommended Occupancy cost benchmark: between 9% and 11% of revenue where revenue is product revenue. This can vary by business type.

Explanation. The 9% to 11% suggested band is based on the margin we see as common in local retail businesses businesses.

Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation. However, the 9% to 11% band is recommended.

It is vital to the health of any retail business to manage the lowest possible occupancy cost. It is for this reason we recommend a low and viable base rent and a fair annual increase.

So, managing the business to pursue efficiency in inventory, space and labour usage is key. This is where our Tower Systems POS software can and does help thanks to the business training and the practical retail business support that we provide.

You are not your customer.

This is one of the best pieces of advice you can give a retailer, for too often, retailers stock their shops with what they like more than what customers may like. They tend this that shoppers will like what they like. Evidence tells us that shoppers like what they like more so than what the retailer likes. This is especially true in local high street retail.

Talking with a retailer about our POS software recently, they mentioned their success with a product category they had rejected for several years. That category is now delivering to their shop close to $50,000 a year in good margin revenue to the business. Better still, it is attracting a category of shopper not common to their business.

They mentioned it because they heard us say to another retailer you are not your customer. They made the point that it took them a while to realise the trust of this.

None of us in retail are our customers yet too often local small business retailers stock their shops with what they like, missing opportunities to give more local shoppers what they like.

Ranging new products is speculative, a risk. But, trying to attract new customers requires this type of risk taking, done carefully. This is where POS software data can play a vital role in understanding the opportunity.

The key is the POS data analysis of the performance of what you have taken on, to measure whether it stays or goes. If it is working, the opportunity could be to expand into allied niche areas, to grow the opportunity further.

Accepting that you don’t know what you don’t know can free you to trial products you have rejected in the past and, through that, uncover valuable opportunities for your business.

Our advice is to always have a modest inventory and space investment on the shop floor of new products that you would not usually carry. Let them show you if they work or not. More important is advice to rely on your POS software data, for this will provide better guidance as to what works best in a shop, it is the evidence.

You are not your customer. Test, play, experiment to find out what your customers love and through this experience more love from in and for your shop.

Good POS software offers flexibility, choices in how the software can be used in a business. What may be a good choice for one business could be a bad choice for another business.

For example, the Tower Systems small business POS software enables the sale of items by department. This could be appropriate in businesses where items are not bar-coded and where stock control is not required because of the unique nature of the products sold.

However, for most retail businesses, selling by department key only is not appropriate. It is old school, risky, poor business management.

A risk of selling items by department, by not scanning each item sold, by not tracking each item sold is loss of visibility of stock movement.

In this scenario, where items are not scanned, it is easy for stock to be stolenby customers or employees and the business owner to either not know or not know until long after the event.

yet, here we are in 2019 and we have some retailers using their POS software too sell items by using the department key, which is genuinely nuts in our humble professional opinion.

Valuable benefits of POS software are the reduction of customer and employee theft, the more efficient management of stock, faster selling and better business management.

All of these benefits are denied a business when it sells items using department keys, when it sells items by not scanning items when they are sold.

While POS software is designed to manage inventory using bar codes, sometimes people make the bad choice to not use this. The consequences of such a bad decision are on them and not on the software as it is doing what they have told it to do through settings over which they have control.

We can help you review your decisions, to improve them, so your use of the software improves. We can help make sure that you are leveraging all the time saving, money saving, mistake saving tools in our small business POS software, to ensure that the benefits flow and that poor business practices are in the past.

We’re here to help.

Halloween is a fun season in retail. It is an opportunity to ramp up traffic and sales leading up to Christmas. It is also an opportunity for the business to play outside its comfort zone. This is great news for any small business retailer.

Here is our advice from seeing Halloween in many retail businesses, advice on ways to promote Halloween to drive the opportunity further:

1. Run a series of Facebook posts early in the season. Through these demonstrate your engagement as unique, different.
2. make your front window scary amazing.
3. Have customers step into Halloween when they step into your store.
4. Have a fancy dress competition on the weekend before.
5. Mock yourselves in social media and elsewhere about being big kids, scary pants or more. Change how people look at your business.
6. Run sales connected with people dressing up to access a sale price.
7. A colouring competition for kids with a prize for the best.
8. Have candy to give away.
9. If you’re in a small town organise a Halloween trick or treat party for safe kid fun.
10. Print a recipe sheet and give this away. Online you can find recipes for eyeball soup, eyeball appetisers, bloody desserts and the like.

Here at Tower systems we are all about small business retail. Anything we can do to help we will do, including providing practical business management advice for retailers on seasons such as Halloween.