If you're like most retailers, you don't consider yourself a software expert. You may know a lot about this fall's merchandise or last decade's wines, but when it comes to selecting your next point of sale (POS) system, you'd rather wait until tomorrow…
At the same time, you realize the benefits of automating your store(s). You can speed up the check out process, better manage inventory and keep a tab on your profits each day. You know it's time to bite the bullet and find the right retail management system.
The truth is that selecting your next retail management software system doesn't require in-depth technological knowledge. Instead, you simply need to roll up your sleeves and run a disciplined selection process – skills you probably already have available, assuming you are succeeding in the challenging retail industry.
Here we present ten best practices for selecting your next retail management system. While there are hundreds of retail software packages on the market, you can quickly narrow them down using these processes and criteria.
- Get management involved. Your retail management software will impact most every aspect of your business, so this is not a decision that can be delegated to a junior staffer or the local "computer guy." This process demands the management talent, process expertise and perspective that only an owner or senior manager can provide. What if your computer guy selected a system based on an underlying database he liked, but failed to recognize that the system accounts for inventory differently that you do? Take ownership!
- Determine your needs. Too many buyers let the software salesmen drive the process and determine their requirements. Only you know how best to run your business and where you need to automate for the greatest return on investment. Therefore, it's critical to map out your core retail business processes and feature requirements. Are you simply looking for a high-end cash register, or do you want integrated inventory management, automated purchase orders and an integrated e-commerce system? Build an exhaustive list of features and then prioritize them based on what will give you the most bang for your buck. Don't be afraid to phase in components over time.
- Get the right package for your industry. I doubt that you frequently describe yourself as a "retailer." No, you're a liquor store, a grocer, a dry cleaner, an auto parts store… In that case, be sure to select a system that has features specific to your unique retail segment. Highly focused packages will more closely map to how their users operate. Broadly-focused "mega vendors" may have big dollars and broad reach, but are not always specialized in your industry. Ask them for customer references from within your market segment. At the same time, keep in mind that there can be a tradeoff between how narrow a software vendor focuses and what level of investment they can afford to make in ongoing development and infrastructure (see #8).
- Buy for your size and growth plans. One size does NOT fit all. Retail systems range from shrink-wrapped packages for a small, single location store to "enterprise-class" systems for national retailers. Prices vary accordingly, from just a few hundred dollars to literally millions. When building a short list of systems to evaluate, consider your current scale and future growth plans. How many registers do you need to automate? Do you need to support multiple stores or just one? Do you know each of your three employees or do you need a sophisticated system to manage HR and payroll for hundreds of staff?
- Focus on ease-of-use. Retail businesses face some of the highest turnover of any industry. Therefore, it's critical to get new staff up-and-running on your systems quickly. Central to meeting that requirement is finding a system that is highly intuitive and easy-to-use. The simplest way to evaluate ease-of-use is to use a demo copy yourself. Try to manage a common process like ringing up a sale, without a salesperson's assistance. Did you figure it out right away? These days, the right software should make it easy. Features that can augment ease-of use include on-line help functions, touch screen interfaces and a "training mode" that lets new employees learn without acting on live transactions.
- Assess support and upgrades. You'll need them. Leading vendors provide support 24 hours a day / 7 days a week. You'll most certainly want weekend support and you might want nighttime support too, even if the shop is closed and you're just managing the books. Consider also how that support is delivered. Are you up for talking to foreign call center staff? Do you want help on-site? And remember, when it comes to software, support isn't just technical assistance; support often includes access to new features, bug fixes and major upgrades. Assess the vendor's track record in delivering consistently high quality new releases of their software. After all, you'll likely pay for them annually.
- Demand accountability. When it comes to technology, things do go wrong. When they do, you'll want a single of point of accountability. Unfortunately, in the retail systems marketplace, fingers point in every direction. A reseller may blame the software vendor, who in turn blames the hardware vendor, who blames the credit card processor. Ultimately, you just need to get back up and running, quick! The best strategy may be to buy from a single source that can provide the software, hardware and services you need. Sometimes that just isn't possible, especially if you want to avoid getting "locked in" to a proprietary system. In that case, determine ahead of time which vendor supports which components. Look for those vendors willing to support third-party products and take ownership. And get it in writing!
- Consider vendor viability. A retail system isn't all you're buying. You're also entering into a long-term vendor relationship. It's critical to assess the software company's viability – not just if they survive, but how… Sure, healthy margins in the software business keep most established vendors afloat, but what about the vendor's "strategic viability?" Can and will they invest in new development? Will they maintain adequate support staff? Will they sell out to a larger company that soon thereafter "sunsets" their product? All of these situations could have big implications for you. Make sure you assess the vendor's reputation, financial well-being and their vision for the future.
- Be smart about your budget. You can quickly narrow down your retail software search based on price. However, this approach will more than likely limit your ability to find the right system. While software does not have to be expensive to be good, never buy on price alone. A good rule of thumb is that retail leaders spend 2% to 3% of their annual sales on technology, while the average retailer spends 1.5%. Of course, if you only invest in technology every five years or so, you should expect to shell out 5% to 15% of sales in year one, for a system that will last five or more years. The more sophisticated buyer will consider the value of the system (as measured by return on investment), rather than thinking in absolute dollars. Consider how incremental investment can help grow sales or reduce costs.
- Plan your hardware needs. While we recommend that the software you select should drive the hardware you buy, don't forget that these components are often highly interdependent. The right software for your retail business may only be compatible with certain hardware platforms or software operating systems. Moreover, there is a wide range of peripheral components to consider, such as keyboards, receipt printers, labelers, signature pads and credit card readers. Be sure to assess your hardware and peripheral requirements and make sure your new software system will support these devices.
Best practices are critical for selecting the right software for your retail business. While we could suggest many more criteria for your process, managing to these ten best practices will get you most of the way to finding the right system. Good luck! Compare leading point of sale software systems to find the right solution for your business