3 Unique Insights Retail POS Data Offers
In an industry with cutthroat competition and razor-thin margins, retail business owners feel pressured to do more with less. Rather than adding more funds to their toolbox, retailers frequently have to get creative to leverage what is already at their disposal.
References
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One of these easily available sources is retail point of sale (POS) data. To put it simply, this information encompasses sales metrics which come either directly from one retail chain (like Kroger or Walmart), or which are compiled from multiple retail companies and syndicated via a third party such as Neilsen or IRI.
Both retailers and their provider brands have the capability to use retail POS data from their point of sale system to boost in-store earnings. In this guide, we will uncover three unique insights which can be gleaned from retail POS data, which will ultimately result in improved sales performance, stock management, and forecasting.
1. Shopper Behavior
Retail point of sale information goes far beyond simply measuring the amount of products sold over a given time period. Reading between the lines of this purchase history is what enables retailers and provider brands to learn a great deal about how customers are purchasing from them.
Analyzing retail POS data in the stock keeping unit (SKU) level shows which items are proving to be best-sellers, and conversely, which are unpopular with shoppers. Dates and timestamps found on sales transactions are also telling of when shoppers are most likely to generate a purchase. This knowledge makes it possible for retailers to have a data-driven approach to stock management.
By way of instance, POS data analysis may show that ready-to-drink drinks are flying off the shelves during lunchtime hours, while gallon-size beverages are likely to be purchased after regular office hours around dinnertime.
This sort of intel enables retailers to stock the appropriate stock counts based on customer demand instead of gut instinct, preventing the dreaded out-of-stock situation (which, incidentally, costs retailers an estimated $47 billion annually).
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2. Promotional Execution & Compliance
Both retailers and provider brands have a lot to gain from a successful promotional event. In reality, research indicates that when implemented correctly promotions have the capability to supply a earnings lift of 193 percent! Obviously, retailers and providers benefit immensely from appropriate promotional implementation, offering another chance for point of sale information to offer value.
Careful planning around pricing, display design, advertising campaigns, staffing, and much more goes into ensuring promotions are profitable. Regardless of the possible upsidedown, an astounding 50 percent of retail promotions are not in compliance using their predetermined installment agreements.
It's not unusual for a screen to be set in the wrong part of a shop, or for sale pricing to not be suitably marked. Mistakes such as these are especially frustrating because the allure of this advertising never reaches the customer.
Retail point of sale information is an integral indicator for whether or not promotions are installed properly. Stagnant sales amid a promotional period as seen at a POS report might be caused by poor retail execution.
On the other hand, a revenue spike can establish a promotion's effectiveness and give concrete evidence for replicating the effort later on. Real-time access to POS reporting is vital for catching these changes early and applying corrective actions while the advertising is still ongoing.
Historical POS information around past promotions can be helpful for planning future ones. Allow the data be your guide when considering timing, stock prep, and even exhibit materials. Retail POS data is telling of what periods are best for holding promotions as well as the velocity where promotional items are selling.
Referencing what was successful in the past is a excellent way to prevent preventable mistakes. POS data analysis before and after a promotion is also beneficial for quantifying the ROI because most advertising events involve a substantial time and investment on the part of both brands and retailers.
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3. Resource Planning
Another benefit of retail POS data analysis is having the ability to plan better to intercept problems before they happen. Moreover, real-time retail analytics affords the advantage of having the ability to stay 1 step ahead of the competition. Below are a few examples of how to use point of sale to enhance forecasting:
- If a specific SKU previously had steady earnings then experiences a sharp decline, this may be indicative of a stockout.
- Likewise, sales of a particular product that drop significantly after a new SKU from the exact same brand is introduced can denote product cannibalization.
- Strong sales of a pick SKU can justify to a secondary placement elsewhere in the shop.
- Brands can share competitive intelligence for their sales performance for new SKUs in other retailers, which can be particularly useful when determining how to stock a new SKU in their product line in your shop.
- If brands demonstrate strong sales at a rival retailer but aren't holding up in your retail industry, there could be problems with retail implementation which will need to be addressed.
- Strong sales of complementary products can demonstrate the achievement of a cross-merchandising campaign and must be replicated where feasible.
- Bestsellers could be identified more easily, allowing retailers to coordinate with providers to improve inventory preparation.
- Retailers can eliminate poor-performing SKUs in the shelf quicker to make space for other products that resonate better with customers.
- Retailers are more readily able to keep in compliance with end-of-life guidelines for a variety of SKUs. If a product was supposed to be taken out of the store's stock but remains registering earnings, this is a indication that it has not been taken off the shelves yet, hindering the possibility for better performing SKUs to take its place.
Retail POS information is so much richer than just the raw sales numbers. The insights derived from the point of sale system are a retail company's secret weapon for keeping a positive in-store earnings trend and directly affecting the bottom line. When retailers and their suppliers collaborate on POS data analysis, the advantages can become much greater.
Sources
https://www.connectpos.com/shopify-pos/
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