Most retailers are beginning to employ quality retail management systems in their operations, and are seeing some very fast benefits: return on investment in as little as six months and at least a 10 percent boost to their bottom lines.

According to the J.C. Williams Group, retailers spend an average one to two percent of sales on retail information systems. For example, a retailer with $300,000 in annual sales should spend about $30,000 over five years on its system, and such a retailer could realize hundreds of dollars a month in extra income as a result.

Just installing a retail management system imposes certain controls on your business that improve profitability. Spending the time to learn and take advantage of its many capabilities brings even more. For example:

  1. Cutting shrinkage: Balancing your drawers and other daily procedures help you discover some of the sources of shrinkage, such as errors and theft. But with its detailed electronic journals, date/time stamps and other security features, a retail management system can provide far more details about the "exceptions" to normal procedures than a non computerized cash register or manual system ever could, helping you isolate and address these problems.
  2. Better inventory control: Paper-based inventory methods are subject to error and take time to compile and search through. With a retail management system you can instantly know what's in stock at any moment, and set reorder points for every SKU so the system automatically generates a purchase order when that item count is reached. You can also print out inventory reports to enable physical inventory of the store.
  3. Streamlined receiving: Merchandise that sits in your backroom while you search through paperwork can't earn you any money. With a retail management system, you can receive using the system's purchase orders, and tell the system to automatically generate the exact number of bar coded labels needed for each item. Your staff can get those items out onto the selling floor sooner.
  4. Targeted customer promotion: Is a food processor manufacturer offering special discounts for add-on tools? Before, you set up a display and hoped. With many retail management systems, you can use its customer database to print out a list of everyone who has purchased that brand processor from you for a personalized mailing. Or, generate a list of your top spenders and send them a special "buy two, get one" offer.
  5. More accurate payroll: It takes time to add up time cards, and often you know that "9 to 3" shift was really 9:23 to 2:48. You can use your retail management system for employee check in/out. Then it can automatically calculate time worked including overtime and other considerations, and send the data straight to payroll for check printing.
  6. Complex commissions: If you pay commissions, the retail management system can track a number of commission levels and SPIFs and feed them into payroll calculations. You can even create reports on who is selling what, such things as gross margins per employee.
  7. Frequent shopper tracking: Without a retail management system, offering anything more than a customer "punch" card meant too much paperwork. But with a system doing the work for you, you can manage a complex program, such as different prices for different customer groups. Reporting lets you instantly view customer buying history.
  8. Accurate billing: Manually calculating a customer'smonthly balance can lead to embarrassing errors. A retail management system can generate billing quickly and accurately. Some systems even post charges instantly instead of waiting until the end of the month.
  9. Foolproof closing: Simply put, end of day closing is much faster, even than an electronic cash register. Most systems will print a form showing shorts and overs, and even print out a bank deposit slip for you.
  10. Incremental sales: You can program many systems to display on the screen a prompt for clerks to suggest "film to go with a camera," or warn "this customer has a bad check in this store. Cash only." These prompts make your staff better salespeople, and cuts new clerk training time.
  11. Reports galore: Rather than just relying on gut feelings and simple transaction logs to gauge your business, you can use a retail management systems to generate all kinds of report: department sales analysis, exception reports, customer sales analysis, purchase analysis, open-to-buy reports. Many systems also allow you to export data to a different report writing system, if that's what you prefer.
  12. Security: While some retailers feel nothing beats a traditional cash register for security, retail management systems are also heavily secure. You can block clerks from looking at your store sales and any other data or accessing modules or programs you don't want them to use.And a quality system will recover completely after a power outage, so you don't lose any sales information.

Of course, a retail management system doesn't do this all by itself. It takes commitment, not just of the dollars required (which you'll quickly recover) but of the time and resources to learn about and use your new system. First make sure you select a quality system that has all the functionality you need. Then invest the time you once spent drowning in paper to making use of your new system, and you'll soon enjoy increased margins, sales and profits.