We are constantly being asked “do you do EPOS”? What do people mean when they ask us this? Usually it’s more about some kind of scanning system than anything else.
EPOS – Electronic Point Of Sale. In simple terms a quick and easy way to sell products and take money.
This is where the product is identified at the check-out usually by a bar-code or PLU (Price Look-Up) code rather than in the early days when every item just had a price label on it. Retail products were sold by price and very rarely were they actually identified individually. If you’ve ever watched Open all Hours you will see that an amount is entered into the till but nothing else.
There is no way of knowing what has been sold or what value is being tendered, that was all in your head as you processed the sale. However, by using a bar-code or PLU it links it directly to an actual product so that we can identify what is actually being sold and at what price. Think of the bar-code or PLU as an address, a bit like your house, where inside is lots of information as to who lives there. So we scan or enter the code and the ‘EPOS’ system looks and finds out exactly what it is. It could be part of a multi-pack offer or a special sale or any other type of incentive so by scanning the code we know that we have the correct product at the correct price.
Having completed the sale the system should also update your stock records to show that an item has been sold. This is where it gets much more complicated as we’re moving away from EPOS now and into the ‘back-office’ where all the business management is done. The EPOS system has identified the correct product at the correct price, the customer has paid and left the store so the work of the EPOS system is actually done. However, we know that you don’t run a retail business from the counter but with up to date, accurate information on your sales and profitability. EPOS is not able to provide that, this is where true ‘Retail Management’ takes over, an area in which Merlin® excels, having been providing Retail Management Systems now for over 40 years!
In this time of escalating costs it is absolutely vital that you ‘know your numbers’! What is selling and at what price and what is the profit per item? If you don’t have this information it is possible that you’re not making as much money as you could be.
Check out these examples of a simple Gross Margin report in which it identifies the category ‘Alcohol’ in total, which shows a gross margin of 40%. It then breaks that category down into a sub-category ‘Beers’, where you can see that in this case the new gross margin is now 30%. However, 30% may be an acceptable gross margin so nothing untoward here, or is there?
Now look at the breakdown of ‘Beers’ into actual products where you will see that, in this example, one of the individual beers is actually only contributing 5% and is being ‘propped up’ by other higher margin products. This is only using six actual products and already one is out of line. Just imagine the effect here with a much larger product file of dozens or even hundreds of individual items with several of them being ‘propped up’!
This is where true ‘Retail Management’ comes into play as you MUST be in a position to get this level of detail out of any system you choose. In addition, what if the cost price changes? Is your system capable of recognising this and either warning you that your margins are going to be affected, or even automatically adjusting your retail prices to reflect the increase in cost to ensure you always achieve your target margin for every product?
So, leading on from this you now have your pricing and profitability under control, what about your stock holding? Do your actual stock levels reflect sales, availability and delivery lead times? Do you err on the side of caution and just over-stock to cover all eventualities? It’s fair to say that many retailers will take the latter view and over-stock, but what about those items with sell-by dates on them? Ideally we should all work on a Just in Time (JIT) model but clearly that’s impossible, however, we should try and get as near to that as possible.
Once again ‘Retail Management’ takes over by looking at actual sales for the previous period then looking forward at the projected sales for the next period (this would be based on product availability) and comparing it with the same period last year. Whilst not an exact science it’s a very good indicator of exactly what you need to buy and when. By all means add a small percentage to your buying quantities but keep it within manageable limits.
As a final thought here we’re often asked about identifying ‘Top Selling Lines’ and making sure we know what they are so that we have sufficient stock available. As has been mentioned previously, Merlin® has this totally under control but what about the stock that hasn’t sold? I would suggest that you would know your best selling lines as these are the repeat orders and the constant ‘facing’ of the displays. However, what about your ‘Worst Selling Lines’, do you know what those are (other than by the dust on the packaging)? With Merlin® it’s a no-brainer as this information is readily available at all times.
Hopefully you can see by this article that there is a lot more to Retail Management than just EPOS. Yes, to answer the original question Merlin® does do EPOS, but it also manages the total business from front to back and everything in between.
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