Congratulations to all the retailers that have managed to maintain their business or grow from the previous year.   Managing expenses in the upcoming year is going to be the difference between the growth retailers and the ones that are looking for trouble.  But managing doesn't mean cut to the bare bone, it means making careful and thoughtful decisions about when and where to spend your money.  Setting up an Open to Buy Plan for your store is the most important tool any retailer can have and with some POS software packages, it is a built in feature and requires little maintenance.  

If you don’t have a good buying plan, you end up marking down much of your inventory and have lean or no profits.  The reverse is too little inventory and your customers will shop elsewhere and your loyalty is gone.  You need to have the right inventory at the right time in the right quantities.  Sounds simple, but how many retailers follow this as if their retail life depends on it, because it does.  If you don’t have an Open to Buy plan set up, do it now and start the new year off right.

The big box retailers will kill you every time if price is the only criteria used to sell more product. People want things that are different and they cannot get everywhere else, but they still want value. The value proposition is fairly simple, customers need to feel that whatever they purchase is worth it and the best way to do that is handle inventory that can only be purchased at your retail store. If you are currently using good POS software, you first must find out the value of your inventory in each department and the relationship of that department to your overall revenue. You then need to find product lines that no one else carries in your area and promote your difference. The big box retailers are constantly trying to figure out the product mix needed in the different locals that they have stores, but you have the advantage in living there and understanding the people. Price is important, but it can be overcome with the right value proposition. 

Can your POS Software handle Gift Cards?  Gift Cards are being used more and more instead of discounting.  Not only will the cards bring the customer back, they usually will spend more than the value of the card.  Another good reason, if you need it, is that 40% of gift cards are never redeemed and that is like finding money on the floor.  You can read more in this article By Jenn Abelson of the Boston Globe. read more...

Why is an Open-To-Buy plan so important besides keeping an adequate quantity of inventory on hand to keep the shelves full?  It allows you to stock new and fresh items that will keep your customers coming back and wondering what new items you will have next.  It also places restraints on merchandise commitments so the store does not receive too much new merchandise too early in the season -- - or not enough.
 

You will be able to estimate in advance the amount of cash that will be required to be invested in inventory from month to month for the coming season and still have adequate cash available. It also allows you to set goals and compare against actual sales and make the necessary adjustments from month to month.  All of these actions can happen with the right POS Software.