Retail ROI

Retail companies don't just implement retail inventory control systems to harvest information and track inventory and sales. They do it because it means cash. More cash than they get could get out of their business otherwise.

Yes, there are operational benefits like Price Controls, Employee Productivity, and Inter-store Transfer Reporting. There are also productivity bonuses like automated tag printing and scanning at Point of Sale, to name a few.

But the pressing reason to invest is there is no other way to fine tune the performance of your business to generate as much cash as through an inventory control system.

Consider these points:

  • Improve employee productivity
  • Improve Turn Over Rate – the single biggest value
  • Decrease Theft
  • Manage Return – the sale that wasn’t a sale
  • Improve Customer Loyalty

In More Detail:


How much time do you spend in a week making and applying price stickers to your products? How many price stickers do you change because of price changes or sale items? Improve staff schedules around your slow and busy times of the day and week so that you know when you need to add or take away a person from the schedule. Know exactly who your best sales staff are from the point of view of highest sales to least returns.


  • Do you know exactly how long your items stay on the shelf so that you can order the minimum amount of product thereby increasing cash flow while ensuring you don’t run out between order cycles?
  • How much stale product are you carrying on your shelves? By way of example – if the minimum order for a product is one case and you can order weekly, are you still holding more than 1 case by the time the next order arrives?
  • POS reports will help reduce the amount of time you hold onto inventory.
  • Small changes make a big difference. Let’s say you stock 10 of product A. Let’s say 8 is really your weekly supply (your re-order window). Eight or ten, what’s the difference? How many times have you said to your vendor rep “give me 8… no make it an even dozen”? Think of the cash flow savings by ordering exactly the correct amount.
  • Products that spend less time on the floor are marked down less.
  • Having better information on Turn Rates will free up shelf space and allow you to add new & different merchandise increasing customer interest. These new products typically allow for higher margins than your staple products.
  • Through inventory analysis you can plan inventory purchases better by knowing what colors, sizes, styles are more popular. For example how many size 10 women’s shoes do you sell vs. size 3 or how many large size ketchup do you sell vs. the smaller size.
  • You know your store and you have a pretty good idea of your inventory but by using exact data you will improve turnover by a few percentage points. Think of what that will do to your bottom line.
  • Likewise knowing how most of your goods are performing is not the same as being able to analyze every last one of them. And even if it is only 3 or 4% of your inventory.
  • Sales analysis allows you to cut back on weak products, eliminate under-performers and get stock levels fine-tuned to maximize cash flow.

Manage Returns

  • Do you know which products you experience the most returns?
  • For the same product – do you experience more returns from one supplier than another?
  • Do you experience more returns from one staff member than another?
  • Do you know why returns are happening and can you improve the situation?
  • Security

    • How much are you losing to internal shrinkage – most people think it is lower than reality. Studies consistently show more people will steal if they think they can get away with it. By showing to your staff that you knowing exactly what’s on your shelves, in the stock room and in the cash drawer will result in less theft. Can you catch staff making fictitious returns or discounting product for friends? The ability to audit and review transactions, spot check inventory and monitor cash will deter employees from temptation.
    • Inventory control will also help track external shrinkage. Do you want to find out that a product was “regularly stolen” at the end of the year or within one order cycle or even quicker? Can you tell today if people are stealing one chocolate bar every couple of weeks? Or do you just order more bars? With inventory control your counts won’t match telling you “you need to put the bars out front”.

    Customer Loyalty

    • Do customers sometimes have to wait at your cash register while you walk back to find out the price of a product?
    • Do customers sometimes have to wait at your cash register just because of a line up?
    • Using scanning technology will dramatically reduce both of these problems all while using the scan codes printed on the products by the manufacturers.
    • Is customer loyalty an important aspect of your business? If so a POS system can track all their buying patterns: how much, how often and what products. Once you’ve found a repeat customer, someone who wants to buy what you’re selling, nothing will help you keep him like a customer profile.
    • This can guide you to when Sales should be scheduled.
    • This can also allow you to communicate up coming sales to interested buyers: generate a list of customers that historically buys flowers on February 14 and mail out a reminder sales flyer.
    • Conclusion

      A POS system will not suddenly increase your sales by 30% (unless you were running your store really badly). A POS system will provide you with the information to help improve staff, inventory, returns, security and customer loyalty by a few percentage points. You know your store – but without sales analysis you can’t know every single item’s exact turnover rate. Sales analysis will tell you that the cans of soup deserve one more shelf space than the cans of beans or that sweaters deserve more hanger space than sweatshirts. By having this information at hand you can increase the efficiency of your store by a few percentage points. Think of it as getting a 5% raise or more in your bottom line.


      (per station oac)