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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Retailers: What Don’t You Know About Your Shop?

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Most retailers know their business well. They know the busy days, the reliable suppliers, the lines that never let them down. That familiarity is earned and it is useful.

It can also become a trap.

Over time a routine settles in. The same reports are read each week. The same advisers are consulted. The same handful of numbers is checked, and the same conclusions follow. Nothing in that is wrong. The problem is what sits outside the routine, unexamined, because nobody thought to ask.

So here is a better question. Not what should you know about your business, but what don’t you know?

It is a harder question. It is also considerably more profitable.

Consider a recent example. A retailer’s data was reviewed using a different tool and cut in a way it had not been cut before. Nothing new was added. Same transactions, same period, same shop. What emerged were opportunities the owner had not seen, sitting quietly in figures they had looked at many times. Some were easy wins. Others changed how buying decisions were made.

The most important competitor any retailer faces is themselves. Habits of thought are as fixed as habits of trade, and comfortable data is usually the least revealing data.

This is where AI Insights in the Tower Systems POS software earns its place. Rather than exporting reports to a spreadsheet and hunting for patterns late at night, a retailer runs any standard report and clicks AI Insights. The software reads the data and answers in plain English: which margins moved, what stock is dead, what deserves attention this week.

One Victorian newsagency found more than $10,000 in dead stock within minutes of first running it. The stock was cleared and the floor space went back to work.

That figure had been sitting in the data the whole time. Nobody had asked the right question of it.

Most retailers hold years of POS data they never have time to read. Standard reports tell an owner what happened. The value in AI Insights is that it suggests what to do next, in sentences rather than spreadsheets.

Treat surprise as a signal rather than an irritation. Surprise almost always points at something the business did not already understand, and that is where the money is.

Tower Systems builds and supports POS software for specialty retailers across Australia and New Zealand. Locally made. Locally supported.

Retailers: How much stock does your shop actually need?

R

Ask a retailer why they bought a particular range and the answer too often is instinct. It looked good. The rep was persuasive. It sold last year.

While instinct has its place, it’s a poor substitute for a number.

Start with a simple question: what is the stock buy actually for? Stock turn? Overall profitability? Hitting a budget figure? Each purpose leads to a different decision, and confusing them fills a shop with the wrong goods.

The arithmetic works backwards from cost. After cost of goods, the two largest expenses in most retail businesses are labour and the retail space itself, whether that is rent or a mortgage. Both are broadly fixed, and neither shrinks because trade was quiet.

From those fixed costs, a required revenue figure can be derived. From the revenue figure comes the annual stock spend. Apply the stock turn the business achieves, or needs to achieve, and an inventory value emerges. A shop turning stock five times a year needs far less capital tied up than one turning it twice.

Every retail channel has its own numbers, so the calculation is not universal. The discipline is.

A shop carrying roughly $30,000 of stock needed to turn over at least a million dollars a year to work. It was horribly understocked and the owner had not seen it, having entered the business on something close to a whim, without appreciating that stock does not sell evenly through the year.

Knowing what the inventory value needs to be, week in and week out, changes buying, cash flow planning and supplier conversations. A gut feel becomes a target.

Our Tower Systems POS software carries the inventory reporting these decisions rely on: stock turn by department and supplier, dead stock identification, performance by category, and replenishment orders generated from what customers actually buy rather than what a rep suggests. Fast sellers get reordered before they run out, and market price checks flag supplier rises before they eat a margin.

AI Insights adds a layer on top, reading the numbers and reporting in plain English which lines deserve more investment and which are consuming cash without earning it.

None of this means buying less. It means knowing, before the order goes in, what the order is meant to achieve.

Tower Systems builds POS software for specialty retailers across Australia and New Zealand. Locally made. Locally supported.

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