The POS Software Blog

The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

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Tower Systems helps independent retailers to expand and find new shopper traffic

March 2, 2023
4 Min read
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Efficiency is the name of the game in local independent retail today.

Efficiency of retail space. Efficiency of inventory investment.l Efficiency of tech infrastructure. Efficiency of labour.

While specialisation is important in retail, finding allied specialty areas that expand the appeal of your business is important today, as that can address efficiency opportunities like those noted above. Through our POS software we help with this and through our business management support and advice we can reveal allied product and category reach opportunities.

We are grateful to help local independent retailers with this. We use the data we can access and share this with retailers.

In the big retail, mass retail, spaces we see fresh examples of expanding into new product categories.

Two stories in recent days reinforce the extent of change in retail and remind all of us in local indie retail to consider change as well.

Bunnings announced the addition of 1,000 pet related lines.

Bunnings gears up to be dog’s best friend with expanded pet range
Emma Koehn

Hardware giant Bunnings is hoping shoppers will add dog food and toys to their shopping lists when heading in store as the retailer launches a significant expansion of its pet merchandise business.

Bunnings will throw down a competitive challenge to specialty pet retailers, which have boomed since the COVID era, when it expands its range from a couple of hundred items to close to 1000 products from late March.

This is a smart move because the majority of pet related purchases are habit based and habit based shoppers are tremendously valuable. Their regular shop is valuable in the context of what else a business operates.

It’s kind of I told you so but around 5 or 6 years ago we suggested the pet category to another retail channel.

The other move in by Chemist Warehouse, into optical.

Chemist Warehouse and Peter Larsen join forces to ‘disrupt’ optometry industry

MYLES HUME
February 15, 2023, 3:18 pm 847

The first store in Melbourne is the start of a mass rollout to take place in the coming years.
Australian pharmacy retailer Chemist Warehouse has entered the optometry market, opening its first store in the Melbourne suburb of Malvern and appointing prominent industry figure Mr Peter Larsen as its managing director.

On 15 February, Optometrist Warehouse announced it had opened its first location at 120 Glenferrie Road, with plans to “disrupt the industry” in the coming years.

“Initial expansion plans include the opening of a handful of stores in 2023, followed by a mass network rollout which will see Optometrist Warehouse become a household name and the go-to optometry service provider within the Australian market,” a press release stated.

We noticed the Chemist Warehouse move as one of their first locations is two doors from one of our shops.

These are thought out moves, designed to reach new shoppers, to strengthen existing, well-established, businesses. In each case they target product / service categories served by vertical businesses, specialty businesses focussed only on these niches. It’s those narrow-focussed businesses that are at risk.

This is why we think it is vital that any local indie retail business draws shoppers for many different reasons, and not just the usual 3 or for product or service categories that we see are typical in a newsagency business.

So, our question today is what moves are you making to attract new shoppers? You have to have made or be making moves because you need new shoppers, especially new shoppers who would not usually shop your shop.

It’s not too late. There are plenty of opportunities. The moves by Bunnings and Chemist Warehouse should wake some local retailers up, and help them see the opportunities out there.

Retail is changing in 2023 at a faster pace than in recent years. We need to change.

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How we help retailers deal with increased rent and other occupancy costs

March 1, 2023
2 Min read
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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.

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Small business retail advice: beware the total cost of ownership of your POS software

February 28, 2023
3 Min read
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What the POS software you choose for your retail business actually costs your business is not always clear or transparent. There are situations where retailers do not discover the actual cost until they are locked in to a particular POS software company.

Here are some examples of things we have seen recently, things we do not do:

  1. Quoting a monthly cost that is actually a prepaid annual cost divided by 12 and where the actual monthly cost if you pay monthly is considerably more.
  2. Charging an EFTPOS fee for your use of an EFTPOS directly linked to that POS software where the EFTPOS fee is considerably higher than the competitive market price.
  3. Signing what you think is a monthly contract only to find that you have a minimum commitment period of 24 or 36 months or more – meaning it is not a monthly contact at all.
  4. Being told that the software can go to the new owner of the business when you sell only to discover that the new owner is asked to pay up front a fee to actually access the software.
  5. Being told that your price is the standard price only for you to discover later that friends get a special price that is much lower than you are paying.
  6. Being told one price only to find a different price in the contract.

These are some of the things going around at the moment. It’s frustrating because here we are in 2023 writing about real things that are happening this year that tarnish the reputation of software companies. we don’t like it. The is why we are calling it out here and elsewhere.

Here at Tower Systems, our prices are transparent, as is what is included in the monthly rental price.

Our monthly price is our monthly price. There is no need for a year up front payment to access it.

And, for all of our customers, here’s what’s included in the monthly rental cost: software licences for unlimited computers in the location, help desk support (by phone or email) 6 days a week (including Saturday), access to a comprehensive support knowledge base, after hours support call access for urgent system down queries, access to our Shopify, Xero and other integrations, access to our supplier invoice import tools.

Simple. Clear. The same offer to everyone.

From a sales perspective, there is no rush, no pressure. Our sales professionals are just that, professional. They pride themselves if being clear if they think our business is not the right fir for you. They also are under no pressure themselves to close a certain amount of business each month. That’s whey they will not harass or pressure you.

Take you time when considering POS software. Move at your pace. Be driven by what you want and need for your business. We are here when you need us.

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Small business retail advice: beware the payment redirection scam

February 27, 2023
3 Min read
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The emails of one of our customers was recently hacked on their business computer.

The hacker saw that we had quoted of supplying a new laptop a month ago. The hacker pretended to be us in an email to our customer and convinced the them to direct deposit money into a bank account they provided.

We only heard about it weeks after the deposit, when our customer contacted us asking where the laptop was. By then, the money, and the hacker, were long gone.

Hackers are sophisticated and clever. They make themselves look legitimate for people uncurious about emails and calls they receive.

In this instance, there were 3 indicators in the email from the hacker that it was a hack, 3 indicators we saw the moment we saw the email they had sent to our customer:

  1. The email named one of our staff members but had a dodo mail email address clearly visible.
  2. The grammar was poor – much worse than our usual typos (sorry for them). For example: all program has been loaded as well. The singular program is the giveaway here.
  3. We never ask for direct bank deposit by email.Our customers can shop with us online through a secure platform, or we issue an official invoice with payment details. Our invoices have a secure payment link.

What happened to our customer was what is called a payment redirection scam. We have provided our customers with advice on reasonable steps they could take to pursue what has happened to them, even though the chances now of resolution are slim.

For more, read about the payment redirection scam: https://asic.gov.au/about-asic/news-centre/news-items/asic-warns-small-businesses-to-be-vigilant-about-payment-redirection-scams/

While the advice from the ASIC and other government agencies is straightforward, it comes down to being vigilant, careful and questioning, especially before you part with any money.

For our customer, the hack was before they received the email. It could have been days or weeks before. Protecting against this involves the most basic of care – clicking only on links you absolutely trust and being careful as to the websites you visit from the business computers.

The Australian Cyber Security centre run by the Australian Signals Directorate offers excellent advice on protection against email hacks. We share this link with our customers as they are the experts. It’s best to share government provided expert advice rather than write our own. This way we are sure the advice is current and best practice. We particularly like:

  • Consider introducing an approval process for requests that ask to change payment details or make a large transfer.

  • Verify any such requests by calling the sender. Call them on a known and verified phone number (not a phone number from the email, as this could be operated by a cybercriminal). Speak with the sender over the phone to verbally confirm the request or change.

  • Ensure workers have clear guidance to verify account details and to think critically before actioning unusual requests.

  • Have a reporting process to report threatening demands for immediate action, pressure for secrecy or requests to circumvent protective business processes.

In terms of what we do at Tower Systems, we never ask our customers to transact with us insecurely. Payment is always through a secure platform, a trusted platform that protects our customers and protects us.

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Free POS software training videos help new retail employees learn

February 24, 2023
2 Min read
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Our growing curriculum of POS software training videos and resources are helping new staff in retail business where our POS software is in play to learn the software and be of more assistance to the business.

Every one of our customers has access to these and our other POS software user training resources.

Created by our POS software training and support team, our new customer training video library has more than 40 new videos added in recent weeks, providing a valuable resource for businesses keen to learn what their software is capable of.

The library of training videos continues to grow.

Each video is short, self contained and practical, designed to provide easy and useful learning opportunities for users of our POS software.

The POS software training videos not only help new users of our software, they are a resource existing customers are using for a refresher, to remind them of our recommended best practice approach.

Our customers are providing wonderful feedback that is most encouraging as we further invest in this latest set of training resources for them. Their feedback as well as viewing data inform us as to investment we make in training materials.

Our personal approach to customer training is a differentiator for Tower Systems. We are grateful for the team members who create our training materials that enable this point of difference.

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Retail management advice: make every day your payday

February 20, 2023
3 Min read
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Too often we see retailers running their businesses with the belief that they will make their money when they sell their business. These folks tend to bot worry about the day to day as much.

It’s a mistake.

For years, we have written that retailers need to make every day their payday.

This is an important message as it focuses on the goal of driving business value. Too often, we see retailers working about, being focussed on, the wrong things, things that do not directly affect business value.

Make every day your payday.

It is a simple mantra that is worth repeating daily. It should guide every decision. Does this, or that, add value to the business. It it does hot, why do it?

There was a time when small business retailers could rely on selling their business for a handsome increase on the price they paid thereby providing a good pay day, when businesses sold for a good multiple of net earnings.

No more. Today, the best way to extract value from our businesses is to make every day your pay day, to not rely on your pay day being the day you sell the business. In fact, the typical shop today will sell for somewhere between 1.5 and 2 times actual net profit as shown in the business P&L.

The P&L matters as this is what you need to be guided by in all business decisions and actions.

The challenge is how do you do this?

Retailers need to look at their businesses differently. This starts with the mindset of every day being your pay day. Each decision needs to be considered in this context, in the context of the P&L impact.

Focusing on profit today will give you a better result today and make your business more valuable tomorrow.

Here are some suggestions for making every day your pay day:

  1. Run with the leanest roster possible. Just about every retail business we review has capacity to lower labour costs.
  2. Ensure you can sell when the business is closed. Yes, this means sell online.
  3. Promote the business outside your usual foot traffic area … increase your customer base.
  4. Promote your business outside the brand people know you as. or example, online pitch under a brand other than your shop brand.
  5. Have your best people working the floor, helping customers spend more.
  6. Have stunning displays that attract people from outside the shop.
  7. Have compelling displays in-store that encourage people to browse beyond their destination purchase.
  8. Always have impulse offers at high traffic locations.
  9. Charge more every time you can. Loyalty programs such as discount vouchers, bundling into hampers, multi buys such as 2 for 3 and other opportunities enable you to do this by blocking price comparison.
  10. Buy as best you can.
  11. take settlement discounts every time you are able.
  12. Measure product category performance by gross profit. Quit the categories that are not paying for themselves.
  13. Promote outside your store using online and social media opportunities.
  14. Leverage adjacency information. Chase a deeper basket – people purchasing more each visit.

Be responsible for the profitability of your business. Don’t blame your suppliers, your landlord, your employees or some other external factor … it all comes down to you – the decisions you make and the actions you take.

If you relentlessly pursue profit with a clear focus you are likely to see profit grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.

Doing all this relies on your measuring the performance of your business. The Tower software helps with this. It is easy.

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Checklist for anyone considering buying a retail business

February 19, 2023
3 Min read
C

We are grateful to work with many people before they buy a retail business. Over the years, we have curated advice for buyers. Recently, we have seen an increase in acquisitions. here’s our fresh advice:

Local retail businesses  are appealing, and, looking out in the market, there are some excellent opportunities.

A common question we are asked by people who find me through this blog is what should I ask for when looking at buying a shop?

The question itself, when asked, indicates how green a prospective purchaser is when it comes to purchasing a business. Our first advice is that they better understand the retail business of today, to understand what they could be buying into.

Here is an updated list of data we suggest prospective local retail business purchasers access from the vendor or their representative:

  1. P&L from the accountant for the last two years. i.e. not a spreadsheet created for the purpose.
  2. A list of add-backs used to achieve a profit figure on which the asking price is based.
  3. Tax returns for the same two years. While note always appropriate given business structures, they can provide a cross check with the accountant P&L.
  4. Sales data reports, for the last two years, from the POS software in use – to verify the income claim. This source data is key.
  5. Sales data reports from the other sources to verify the income claim.
  6. BAS forms to confirm data in the P&L.
  7. A list of all inventory in the business including the purchase price and date last sold for each item. And, copies of invoices from which you can randomly select to verify.
  8. A copy of the shop lease.
  9. A copy of any leases the vendor expects you to take on board.
  10. A list of all forward orders placed on behalf of the business.
  11. A list of all employees: name, hourly rate, nature of employment, start date, accrued leave and accrued long service leave.

This is good basic information, a starting point, which will enable any purchaser to undertake reasonable assessment of a business.

Our advice to retailers looking to sell who may be concerned about this list is: think about it now and focus on your business so the data we have listed looks good. The time to prepare your shop for sale is every day you are in the business.

This is why we say every day is your pay day. Run a smart, lean and profit focused business and you will have a good pay day today and a good one when you come to sell.

The most appealing businesses are those that are easier to run and are making money.

Sure a purchaser can turn a business around. They should get the rewards if they are expected to do that for your business.

The price you can sell your business for will be based on what it is making now.

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Updated POS software for local music instrument sale and repair shops

February 17, 2023
3 Min read
U

Our Tower Systems music shop POS software is made for music instrument retailers. Actually, it was first made for bike shops and then we discovered that there were needs in music shops that were almost the same as bike shops. And here we are, locally made and supported POS music shop POS software.

We are grateful to be able to offer this software for music shops for 4145.00 a month. This includes GST, access to the software, access to the help desk and access to an awesome fresh catalogue of training resource and support materials.

From instrument sales to service and repair, this music shop POS software is made to help local music instrument shops sever their customers and local communities.

Easy to setup and run, this music shop POS software can evolve as the needs of the business evolve. For example, you could move from basic selling to instrument repairs to leveraging customer data to run email campaigns to attract shoppers back into the business. we say this based on what people working in music shops have told us.

Specifically, using our music shop POS software, you are set to benefit from a range of facilities including:

  1. Club / school / music teacher grouping pricing:Helps you attract community group members. The better your connection with these communities, the more business.
  2. Repairs:Easily track & manage repairs & communicate with customers. This works whether you repair the instruments in-store or not.
  3. Special orders:Easily manage special customer orders for musical instruments and other items that you bring in especially for them.
  4. Pre-orders:Pre-sell stock and be ahead of the game.
  5. Serial number tracking.Track for absolutely sure what you sell if it has a serial number.
  6. Product servicing and check-up reminders.
  7. Genuinely informative receipts:Include information they’ll appreciate, like how to care for a musical instrument purchased.
  8. Catalogues:Setup and manage date-based specials and offers.
  9. BOGO:Increase sales with buy this and get that  For consumables like regularly purchased items this can work a treat.
  10. Customised product labels:Include store name and contact details.
  11. Awesome loyalty:Guide one-time and regular shoppers to spend more.
  12. Seasonal reordering:Easily reorder inventory based on seasonal sales.

Connected to Shopify for easy online sales if you wish, Tyro for fast broadband EFTPOS, Xero for easy accounting management, this software has hooks designed to help run a more efficient and successful retail business.

From us you will receive no pressure. take a look and see if this music shop POS software may serve your needs.

the latest release of the music shop POS software from Tower Systems was out in early February 2023. This software is fresh, made for music shops.

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2 minute read: map your shop layout by GP contribution and see your business differently

February 13, 2023
2 Min read
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A few minutes spent analysing space allocation performance could reveal opportunities to embrace.

With retail space usually costing between 11% and 15% of (non agency) revenue, it is usually the next highest cost outside of the cost of stock itself.

Retailers often argue that rent should be lower. It could be that a different view of shop floor performance helps you achieve a better return.

  1. Take a blank sheet of paper, ideally A3, and roughly sketch out the layout of your shop, marking in display units, shelving, the counter – everywhere you have product. Include your back room if you have stock there.
  2. Colour-shade the layout by department.
  3. List the departments on the side of the floor plan.
  4. Calculate the percentage of total space used for each department. This does not need to be accurate to two decimal places. List this next to each department you have listed.
  5. Use your POS software to report on gross profit dollars earned by each department over the last year, or calculate it from sales figures knowing the average GP% per department.
  6. Calculate the percentage of total gross profit contribution earned by each department and list this next to the floor space allocated to each department – on the floor plan map you have done.
  7. Circle in green those performing the best, where the GP% contribution is more than the GP% space allocation, and in red those performing the worst.

Typically, a business owner doing this for the first time will have an ah ha moment, seeing something they had not realised. 

We have seen business owners make changes including to floor layout, quitting suppliers and increasing stock weight for some departments.

You can take the analysis a step further by looking only at one department and

analysing performance by category, using the method outlined above.

Our specialty retail POS software can help with this and more business performance analysis.

Our goal is to help you run a more appealing, successful and valuable retail business. As retailers ourselves, we use our software this way every day.

We can help if you are interested.

Find out more:

Thanks for reading.

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Why have big retailers ramped-up their loyalty pitch in 2023 and what could this mean for you?

February 10, 2023
2 Min read
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The major supermarkets, several other retailers and non-retail businesses are spending big pitching their loyalty programs already this year.

Their pitches tend to cast their loyalty program as key to unlocking value for shoppers. Value in this context should read as lower prices.

We think their increased focus on loyalty is their response to inflation and consumer sentiment associated with this.

Shoppers are concerned about prices, especially in must-purchase settings. From data we see, with want purchases, discretionary purchases, price is less of a concern.

We have found the best way to pitch value is through an easily understood loyalty program that does not compare to the poor-value over-hyped programs from the supermarkets and similar.

Seriously, what is a loyalty point worth anyway?

While our specialty retail POS software has a good loyalty points facility in it, it’s the discount voucher loyalty program that many hundreds of our customers prefer. I use it in my own shops.

Each voucher has a dollar value. People understand $$ more than %.

On average, 19% of vouchers are returned and of those returned, a third are redeemed the day of, a third within 7 days and the last third within 28 days.

Guys are more likely to redeem right away whereas girls are more likely to redeem a week or more later.

In settings where shoppers don’t want the vouchers, there is an opportunity for a local charity connection, which extends the reach of the discount vouchers, better connects the business to a local charity and helps leverage that charity’s community to support you.

My advice, if you’re interested, is to take note that the major retailers are pitching loyalty more this year already. Consider what you can do in your business to engage with shopper interest in value.

We can help if you are interested.

Find out more:

Thanks for reading.

We serve local specialty retailers across a range of product channels and are grateful to serve beyond our POS software, with retail advice and inspiration – to help local small business retailers compete and enjoy their businesses more. This is where local value can be nurtured and shared.

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