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IT in Retail POSIT in Retail POSIT in Retail POSIT in Retail POS
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INFORMATION TECHNOLOGYS INCREASED ROLE IN THE
GLOBAL RETAIL INDUSTRY
Technology used in retail stores includes front-end andback-end solutions and technology that connects retailstores and chains to enterprise-wide business solutions.
Retail technology ideally improves the customerexperience with regard to service and efficiency.
New technologies evolved in retailing are RadioFrequency Identification (RFID), Smart OperatingSolution Smart Ops, and Point of Sale (POS), DigitalSignage etc.
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POS Evolution from ECR
The Electronic Cash Register simply gave a sales total for the day ormore sophisticated registers that provided sales by departmentreporting via a cash register tape at the end of the day.
ECR (Electronic Cash Register) was programmed in software whichwas /had
Proprietary in nature Limited in terms of functionality
No communication capabilities.
However in 1973, IBM came up with the 3650 and 3660 Store
Systems that were the first commercial use of client-server
technology, peer to peer communications, LAN simultaneousbackup and remote initialization.
This was the beginning of the modern day POS systems.
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Point of Sales
Point of Sale (sometimes also known as Point of Service) is the
actual location where the monetary transactions between the
buyer and the seller of goods take place. It is usually used to
indicate a retail shop or the check out counter in shops,
supermarkets, casinos, hotels, restaurants, stadiums, reservationcounters at airports and railways and all other types of retail
enterprises.
Point of sale (POS) systems is electronic systems that provide
businesses with the capability to retain and analyze a wide
variety of inventory and transaction data on a continuous basis.
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Importance of POS
POS is the primary gateway between a retailers information
systems and its customers and plays an important role in
effective customer interaction and service.
However, POS is also an area plagued by a battery of challengesimposed by functional as well as technical limitations.
Being a channel which handles more than 90% of the sales, it is
imperative that POS occupies high priority in the minds ofretailers and forms one of the most investigated and invested
area.
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Understanding POS Lifecycle
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Inception Stage
Initial pilot phase and has not be rolled out across all the operations.
The initial challenge here is to ensure that POS achieves a functionality fitment to
the business while incorporating the best processes and features into it.
It is likely at this stage to encounter difficulties during implementation and rollout
of new POS applications.
Consolidation Stage This is when the POS has already crossed the pilot stage but is still in the process
of enterprise-wise rollout and integration.
The day-to-day operational and maintenance processes around the new POS
application are still being worked out.
Understanding POS Lifecycle
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M
aturation Stage
This is the stage where the POS has been around for years with the retailer and is
quite stable and meets all the staple requirements and effectively handles the
business requirement.
However the POS has got voluminous enhancement requests pending forimplementation.
Declination Stage
At this stage the POS starts showing sure signs of aging.
It is not able to scale up to the new set of business requirements and also failing to
live up to the performance level expected out of it.
Understanding POS Lifecycle
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etirement Stage
Further investment in the same POS stops yielding credible ROI.
The maintenance costs of POS would have grown larger .
Vendors who developed the early POS applications have moved on to newtechnology.
Retailers start contemplating on exploring options for a new POS.
Understanding POS Lifecycle
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The points shown in the spider chart are catalysts to the
primary drivers that lead to POS change.
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Point of Sales Hardware
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IT Technologies adopted in Retail Supply Chain
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Effect of POSImplementation
According to the field research report prepared by Microsoftthat interviewed over 580 retailers (who had deployed
POS systems), the findings were:
The application of technology leads to increment in sales
and reduction in expenses, thus causing a rise inprofitability.
Technology by itself does not cause salesincreases or expense reductions, but rather the waythe information that technology provides is usedcauses the increased sales and reductions in
expenses.
Expenses do not get reduced the moment the POS
system is installed. Rather, there is an initial rise in the
expenses due to the process of integration of the systems
and also the effort and the costs involved in the training
of staff employed.
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Expenses Reduce, Sales Increase: How?
Reduction in check out time
Faster check out of customers at the transaction or billing counter takes
place due to the scanning of the items that the customer purchases.
Faster approval of purchases from the inventory of the retailer
The POS system enables the PC at the billing counter to be always
connected either through LAN or some other networking technology to the
central database of the inventory. Thus, it enables faster purchase of the
goods and enhances the experience of the customer
Capturing the product detail
The out of stock problem that most retailers experience due to inaccurate
inventory management can be avoided by having a re-ordering software
which would facilitate in increasing the in stock position of merchandise.
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Capture of customer information
This feature enables after-marketing to individual customers based on purchase
habits and practices.Also particular customers due to their loyalty or high
spending inclination can be given further discount on products or additional perks
such as redemption of points they secure on purchases made in that store.
Reconciliation
At the end of the day, the owner can easily track the price of the products sold
with the cash generated in the cash register, hence the occurrence of theft by the
staff at the billing counter is greatly controlled.
Clocking In Period
Sales associates clock in on the cash register and hence their work hours can be
tracked. This saves time and money which was earlier employed for this process
and also reduce the payroll staff as this data can be directly transported to them.
Expenses Reduce, Sales Increase: How?
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Internal benefits
Use EPOS software to provide sales information - this can help you focus on
more profitable lines, improve your demand forecasting and minimize
inventory.
Add software modules to improve efficiency - addingElectronic Funds Transfer
(EFT) capability to your system means that every time a sales transaction isrecorded, the credit or debit card transaction is also processed, reducing the time
spent per transaction.
Link yourEPOS terminal to other systems - by connecting EPOS to back-office
systems such as your accounting package, you can increase control over your
business and improve profitability. Link yourEPOS system to your website - this provides online customers with
rapid, up-to-date stock information. If stock runs out, EPOS can update the site
to show that it is unavailable and warn potential customers that there will be a
delay in delivery or offer an alternative.
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Integrate EPOS with your stock control system - this allows you to keep stock
information up-to-date in real-time and streamline your supply chain processes.
YourEPOS system can automatically determine which products are fast-moving and when they need replenishing.
Provide suppliers with tracking sales and purchasing data - giving suppliers
information on your customer purchasing habits and your marketing helps them
factor your order demands into their plans.
Supply chain benefitsSupply chain benefits
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Integrating clean POS data within an array of cuttingedge, exception-based,
demand-sensing and planning tools and services now makes it possible for
manufacturers to stay in tune with changing consumer preferences and to
ensure that their supply chain is directly aligned with the market at all times
Integrate data from EPOS with data from handheld scanners - this means you
can track bar-coded products on the journey from your suppliers to the
warehouse to the store to the final point of sale. You can then identify where
goods are being held up, compare the performance of different suppliers andtheir delivery times - and improve on the results.
Supply chain benefitsSupply chain benefits
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Case StudyCase Study -- LiliputLiliput
Introduction:
Lilliput entered the domestic retail market with the launch of its first store in Delhi
inAugust 2002. Today it has a strong presence in the kids wear section, in both
Indian and international markets. It has more than 140 brand outlets, and over
150 large multi brand outlets like Shopper's Stop, Lifestyle, Pantaloon, etc.
Problem:
With growing number of stores and multiple transactions at the company, there
was a need to record various business processes in a single database. Thus,
Lilliput was in search of a solution to support the growth of its stores. The
company needed a solution, which would enable the employees to trackindividual orders, map inventory processes, and handle store operations more
effectively.
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Approach - Powerful POSApplication:
LS POS is the Point of Sale/Service (POS) part of LS Retail. LS POS is a fast,
dependable and powerful POS application, with a graphic user interface.
Choosing LS Retail provided Lilliput with advanced features required by the
store to effectively run promotions, loyalty schemes and periodic discounts.
The bills were faster to generate. Usability of the product reflect in the
immediate incorporation with Microsoft solutions such as MS Word,MS Excel
and Outlook; making it positively easier to comprehend.
Case StudyCase Study -- LiliputLiliput
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