3 Way for Retailers to Boost Profits

Technology is playing a very important role in retailing, and it doesn't matter if you're a larger retailer or a small retailer. You have to go after the best technology.

It stands to reason that, if retailers want to keep up with the changing technology which many of their competitors are moving toward, they cannot afford to skimp on technology. Hence, to stay competitive in the industry, a retailer needs to invest in software to manage inventory, pricing, sales, people, and other forefront operations.

In today's retail industry, technology allows store owners to automate like never before. The basics for a retailer to improve profit margins are:

Inventory management
Vendor management
Employee management

Dan Jablons, VP Operations at One Step Retail Solutions says, "Hardware technology, like handheld devices for inventory, just validates the good things of a point of sale system. However a retailer has to be focused on having the right merchandise at the right place and at the right time. They have to use the system to evaluate the performance of merchandise in their stores so that they can do a better job partnering with their vendors. And they need to develop statistical reports to help manage employees so that they perform the tasks and functions that management expects them to do."

Increasingly, technology is seeping into every aspect of retailing. Starting with point of sale with payment options and adding a portable scanner or PDA, then throwing in hardware for security are among the growing needs for a retailer. But these are not what a retailer should focus on alone.

"No one is going to win a noble prize for ringing up a sale. Any point of sale product can do that. The important piece of technology in any point of sale product is its ability to produce meaningful, actionable reports that help the owner or manager improve the business," Jablons says further.

The key goal for retailers is better sales forecasts and better inventory control. Therefore, knowing where your profits are coming from is one way technology will help a retailer manage their business better. It allows them to generate sales forecasts and make better business decisions overall.

Kevin McAdam, Director of Sales at One Step Retail Solutions, points out, "Without technology, the competition will destroy you. If you just model the most successful retailer, Sam Walton (WalMart founder), who originally thought he couldn't get past nine stores, technology was the only way he did it."

McAdam further stated, "One of the ways to use technology to boost profits is knowing where you are making money. I was working with a retailer with five stores, and he had vendors come to his stores to tell the him what his stores needed, and the owner would buy it. He had no idea of the profit margins on what he purchased, so his sales were high but his profit margin wasn't. So, technology can give you a quick way to know not just what you're selling but where you are making your money."

Having the right technology alone may not be enough it seems. According to Jablons, another factor comes into play and carries a massive role in helping retailers succeed, and that is retail consultants.

Jablons believes that a good retail consulting company will make all the difference for a retailer. He states, "Lots of companies have the technology readily available to them through many outlets. The thing I spent a lot of time developing at One Step Retail Solutions is a team of consultants with retail backgrounds. So, they're not just geeks working on a particular application; they are consultants with retail backgrounds who know and understand retail operations and merchandising."

"That's different than a guy who's just going to tell you what buttons to push. They know the end goal and they visualize that with the retailer to get them there."