Tennis Specialty Retail Tip: A POS System Will Help Grow Your Business
According to a recent survey among specialty sporting goods retailers conducted by Leisure Trends Group, “Point of Sale systems are the front line of technology in a retail environment. The ability to integrate sales, inventory management and customer communications from a single platform are essential when servicing savvy customers who have grown accustomed to a more fulfilling shopping experience.”
The Leisure Trends Group study found that 89 percent of the specialty sporting goods retailers responding to the survey have embraced and are using a POS system.
But among tennis specialty and pro shops, use of POS systems is much lower. According to the TIA’s Cost of Doing Business–Tennis Retailers survey, only 44 percent of the responding retailers use a POS system. This means every tennis shop that doesn’t have a POS system has a huge opportunity to greatly improve retail operations, inventory management and profitability.
But there’s more. In our experience dealing with retailers, we’ve found the difference between a typical specialty retailer and a high-profit specialty retailer (defined as achieving a double-digit net pre-tax as a percent of total revenue) is, first, using a POS system, and second, complete utilization of the features and functions built into the POS system. In other words, a POS system will help your business, but it will help it even more if you use all the features that are available.
The Complete System
Basically, a POS system is a way to ring up sales, produce detailed reports and track inventory, and it can be expanded as the business grows. At its core, specialized POS software runs on a standard computer, connected to a cash register, monitor, PIN pad and receipt printer. Other equipment can include a bar-code scanner and a credit card reader.
Often, POS systems are sold preconfigured, but you can buy the components and software separately and add to the system as your needs grow. If you’ve never had experience working with a POS system, it might be best to start simple, but with a system that will allow for future expansion.
High-profit specialty retailers utilize every feature and function of their POS systems, and they train and educate each of their staff members, whether full time or part time, on the complete use of the store’s system. They squeeze everything they can out of the investment they have made, and when they do, they realize a huge return on that investment.
This complete utilization includes using modules such as purchasing, open to buy and integrated accounting to expand the capability of the POS system to contribute to the operational excellence and growth and profitability of their retail business.
The cost of POS systems has dropped over the last decade, as has the cost of the computer hardware to support these systems. Basic POS software starts around $1,500. Also, there are now hosted (i.e. web-based, or on the cloud) POS systems available to all specialty retailers that further lower the cost and enhance the ease of getting started because of the simplified installation.
The other common features of POS utilization by high-profit specialty retailers is integrated or compatible accounting. Several systems offer integrated accounting, and others are compatible with computerized accounting systems. In either case, the integration of POS data and accounting data speeds up the analysis of the business, and makes it possible to look at key performance indicators (KPIs) weekly, and some KPIs as frequently as every day.
Inventory management is also either built-in or can be added on, including modules for purchasing, open to buy and special orders. The combination allows the store to bring efficiency to managing all aspects of the investment in inventory, and realize higher inventory turns, while enhancing customer service by having available what shoppers want, when they want it!
From the store’s standpoint, the gross margin return on inventory (GMROI) is improved and the increase in profitability drops right to the bottom line.
Coming Up: Choosing the right POS system for your business, and KPIs you should track weekly.
Stay tuned for information about upcoming TIA webinars on selecting and using a POS system to help your tennis retail business. Also coming up, TennisConnect, the TIA’s cost-effective software tool for tennis providers, will soon introduce a QuickBooks component for tennis retailing, making POS integration even simpler and more cost-efficient. Check out all that TennisConnect can offer retailers at TennisConnect.com.
This is the second in a series of retail tips presented by the Tennis Industry Association and written by the Gluskin Townley Group (gluskintownleygroup.com).