Three Best Practices for Managing a Retail Business
Managing retail business requires complex approach to business operations and analytical skills to improve business performance. Detecting consumer patterns from massive data your retail software is delivering can be overwhelming. You need to pay attention to consumers’ purchase histories and product preferences along with inventory. Easiest way to gain full advantage of your retail software system is to constantly be up to date with your retail software system’s new features and implement them in order to improve store performance. Take advantage of every functionality there is and you can rest assured that you have done everything in your power to better manage your retail business and stay ahead of your competitors. Here are some things to keep in mind when analyzing and planning your retail business operations to achieve your business goals:
Track Customer Buying Patterns in Your Store
In order to better estimate customer needs for goods and services, every business owner needs to systematically analyze customer buying patterns in their store. In the past, shop owners used notebooks to keep track of all the purchases, and it took them quite a long time to properly get good information about product traffic. Luckily, nowadays we have almighty Point of Sale (POS) systems which do most of the work for us. All we have to do is click on a button and magically we have comprehensive reports about sales by product, day, customer, etc. for any given date range. If you want to carry out a more in depth analysis of your customers, you must know which reports and filtering your software allows you to generate.
For example, Sales by Customer will help you discover patterns in customer purchasing. Are some items commonly purchased along with others? Sales by Location might prompt you to evaluate store layouts. Are you selling more of an item because it’s displayed more prominently?
Erply has been very generous in providing these functionalities, to empower your analytical skills, which leads to better management of your retail business. For example, you can pull out comparison reports based on date and/or location and monitor the periods of sales which could use a little boost and should be supported with promotional activities. Erply’s functionality Sales by Product will also give you insights about your product traffic and helps to give you an overview of the more popular items. This can be used to view trends in seasonal sales.
Erply’s Sales Reports can be compared by locations, employees, etc. for any given date range.
Analyze Your Inventory Turnover
Inventory turnover is a key factor which is used to determine how efficiently your business is performing. It is a measure for calculating the number of times per period (such as a year) a business sells and replaces its entire bundle of inventories. In order to determine whether the inventory turnover ratio is high or low, you should compare it with the industry average. There are various ways to boost your inventory turnover ratio. Using grouping and detailed up-to-date reports helps to make clear what is selling well and generating actual profit and what is not.
Erply provides an extensive variety of reports meeting all your business needs. Along with over 100 different reports, Erply has an option to create your own, fully personalised reports using Report Generator. All reports can be exported to Excel – view in Erply and manipulate and find trends in Excel.
Erply’s Report Generator enables you to filter out the fields you don’t need on your reports displaying customised reports with only selected information.
Keep an Eye on Your Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS) includes direct costs attributable to the production of the goods or services sold in your company. This amount contains all the expenses that are involved in manufacturing your product or delivering your service.
Retailers COGS formula
It is important to keep your COGS low so that your net profits will be higher, e.g. if your price is higher than your COGS, that means you are earning money every time you sell something – and that’s the way to go! Erply provides several reports on COGS by item or customer and by location. As with all the other reporting functionalities, you are also able to apply location and date based filters on your COGS reports.
Variety of Erply’s COGS reports.
Retailers who want to prosper in the future, have to incorporate data into decisions about their retail business operations. Setting up the right point of sale system and mastering all of its possibilities will pay off, the knowledge and insights you gain will be worth the time and effort you put into learning.