How can a retail management system help retailers become efficient, save costs and make them ready for the holiday season

One thing’s for certain about the 2022 holiday shopping season – it’ll be unlike any that we’ve seen for a while. For a start, it will be the first ‘unlocked’ festive season for three years. Retailers can expect what the Washington Post calls a ‘revenge’ Christmas, with shoppers getting out and buying, just because they can. They’ll be doing more socialising, more gift giving and entertaining, boosting a range of retail sectors including fashion and accessories, home décor, gifts, food, wine and spirits. Retailers would need a sophisticated retail management system to manage the holiday season rush.

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But on the other hand, whilst sales may be up in dollar terms, inflation will rein in increases in sales order volumes. Retail consultancy GlobalData predicts that sales value will be up by 6.6% – a lower level of growth than we saw in 2021, when stimulus payments were still fuelling spending.

So whilst it’s not a bad picture, it’s not great either, and the retailers who will make the most of the season are those who can attract customers and sales, whilst driving efficiencies and cost savings for a profitable holiday season.

When it comes to efficiency, one of the most effective strategies for a retailer is to have a retail management system. Not just a point of sale, but a fully integrated suite of retail functions – including in-store and online sales orders, inventory visibility, goods receipt, staff rostering, payroll, marketing and accounting. Implementing a retail management system with functions that collaborate, share data and automate processes is the fastest way to shave off excess costs in a retail operation as the holiday season approaches. Some of the ways that an integrated retail management system can reduce costs are:

  • A retail management system that integrates point of sale with powerful inventory management software gives retailers real-time, reliably accurate inventory visibility. They can automate re-ordering based on stock level triggers, and use historical sales order figures to accurately predict required order quantities. This offers a significant saving according to the National Retail Federation, who estimate that U.S. retailers lose $45 billion from not having inventory in stock and $224 billion due to excess inventory.

    It’s a picture backed up by Statista, who tell us that retailers save 8% of their costs if they can avoid a stockout.

    One retailer saw a revenue improvement of 40% by using integrated inventory management to more accurately replenish out-of-stock sizes.

  • An integrated retail management system that gives full inventory visibility to the online store means that retailers can process BOPIS/click and collect or curbside pickup orders faster. With flawless inventory management across every location, the customer can see which retail stores have the goods in stock, and be offered the fastest pickup time. Faster click and collect translates to a 10% saving for the retailer.

  • When the retail management system includes staff rostering integrated with a mobile network, staff can see, accept, change and request shifts on their phones, dramatically reducing the person-power needed for scheduling. Include geolocation to track when they are actually in the retail store, and the retailer can automatically send the number of worked hours to the payroll and accounting systems to calculate and manage pay. Making the best use of staff is particularly important in today’s environment of low unemployment and higher salaries, and retail stores can reap as much as a 9% reduction in operations costs by managing staff efficiently

  • When types of promotions and marketing information are part of a retail management system, along with sales and pricing systems, retailers can manage several levels of pricing for the same product – for example in-store vs online, or to a loyalty program customer vs a regular shopper. This helps to maintain the balance between volume of sales and profitability.

The overall goal of an integrated retail management system is to pull together information from  what McKinsey calls the ‘traditionally siloed’ departments, and get a view of the total cost of every SKU based on its journey through the supply chain. This in turn helps them to make data-based decisions about what to sell, where and to whom in order to maximise efficiency.

According to Intuit market research, by using an affordable, integrated POS system, an independent retailer with revenue of $300,000 can cut costs by close to 10 percent, saving an average $30,000 a year. Savings like that would be a wonderful holiday gift for any retailer.

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