You dont have to be a Wal-Mart to take advantage of retail technology. We take a look at how point-of-sale sofware helps one very small business be more efficient and responsive to its customers.
Just because you run a tiny high-touch, small-town business doesnt mean you have to forego the benefits of automation. Some people would even argue its all the more reason for automating to the hilt.
Kimberly Kennedy, owner of The Silver Basket, a gift basket shop in Presque Isle, Maine, may be the ultimate case in point. Kennedys business, which she launched three years ago in this town of 10,000, is about as low-tech and high-touch as they come. She custom assembles gift baskets filled with gourmet foods and snacks.
And its certainly tiny enough. She has one full-time employee, her mother. During peak periods such as Valentines Day and Christmas, she might bring in as many as three part-timers.
The Silver Basket pretty much caters to people in and around Presque Isle within about a 60 mile radius, she says, though shes now working on a Web site. The company had less than $100,000 in sales last year.
Kennedy is nobodys technology wiz either. She prefers in any case to stay focused on her very people-oriented business. But that doesnt mean she was blind to the potential of using technology to make it run better.
When she started, she knew she needed a computer and knew she wanted a computer-controlled cash register, but that was about as far as it went. A local reseller suggested QuickBooks Point of Sale software from Intuit Inc.
The entire set-up computer, printer, cash register, barcode scanner, QuickBooks POS and installation cost Kennedy about $3,500. It really had everything I needed, she says of QuickBooks POS. It saves a lot of time on my end and delivers many, many benefits.
QuickBooks automates virtually every aspect of the operation, not just controlling the cash register and accounting, but also inventory control, financial reporting and even business intelligence.
In fact, it enables the very feature of The Silver Basket operation that Kennedy believes is her competitive advantage: it makes it dead simple for her to assemble from scratch -- and bill for -- a basket that contains just the items her customer wants.
Not that Kennedy has any real competition anywhere within a three-hour drive, but offering customers absolute flexibility has helped make her successful, she believes.
She doesnt stock any ready-made baskets and doesnt even insist on a minimum price. Customers can tell her how much they want to spend $50, say, or even $10. They might give her a general idea of what theyd like to include in the basket, or a very detailed list of items.
Or they might leave it entirely to her discretion. A lot of people just trust us, Kennedy says. Weve built a reputation.
As she adds the individually priced items to the basket usually while the customer waits she scans their barcodes and theyre automatically added to the receipt. She can see on the screen when shes reached her dollar ceiling. And she can print off an itemized bill for the customer in seconds.
If I had to write down 10 items on a paper receipt every time, it would take a lot longer, she points out. But I can scan in a number very fast. And that means customers can get in and out quickly without having to wait.
As well as using the system to generate receipts for retail customers, she can take sales orders over the phone from customers to be invoiced later. QuickBooks will even cue her if the customer is eligible for a discount or tax exemption.
And the program makes closing, a task that in the past often kept retail owners and managers working late, a breeze. At the end of the day, it takes me about five minutes to close, Kennedy says.
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The program also enables the kind of personalized service that goes along with offering a fully customizable product. If a customer calls and says she wants another basket the same as the one she ordered for her mother-in-law two months ago, Kennedy can, with a few key strokes, pull up that customers order history and see exactly what was in the original basket.
She can also include notes in customer profiles to remind her if any regular recipients have nut allergies, for example, or if the customer wants to always exclude or include certain items.
Kennedy has experimented with proactive marketing sending out postcards or coupons to customers at the times of year they have ordered baskets in the past. Its clear shes wary of annoying customers with unsolicited mail and she only does it with those shes sure wont mind, usually her most frequent customers. QuickBooks can be set up to routinely generate alerts of such opportunities.
Despite customization and personalization being the shops main modus operandi, QuickBooks innovative gift card functionality has been a small but not insignificant business builder.
Sometime customers simply dont know which items their friend or relative might like. So they buy a Silver Basket gift card and charge it up with a set amount of money. Kennedy can ring it up, and its shown on the books as a regular sale.
When the recipient comes in to order a basket, Kennedy puts the gift card in a special card reader that works with QuickBooks to automatically debit the card by however much the person ends up spending. She can also recharge it with funds if the customer wants.
Its a small percentage of our sales, but in a town of 10,000 people, I think customers really appreciate the option, she says. Sales of cards sometimes to businesses or the local hospital to give away or auction have increased steadily. Theyre on track to be up 12 percent this year over last.
Automating the Back Office
The point of sale functions are crucial, but QuickBooks also looks after the back office, automating inventory management and product ordering among other things.
Its a small store, so Kennedy usually knows what she needs just by looking around. But when she generates monthly inventory reports, QuickBooks flags items on which shes running low so shes less likely to miss something.
Monthly and quarterly inventory reports also show selling trends and seasonal patterns in demand for particular items or types of items, which makes it easier to do long-term planning.
Reordering is simple. She scans an items barcode, and it automatically appears in a new purchase order along with the sellers information. She only has to enter the quantity, add any other items from the same wholesaler, and the order is ready to e-mail or print.
And when the order arrives and she keys in the actual unit prices charged, QuickBooks will alert her if the wholesale price as gone up.
Before you print barcodes for the chocolate bar or whatever it is, it will tell you youre now paying 50 cents more a bar for this item do we need to adjust our [retail] prices? Which is nice.
Its these small grace notes that make Kennedy so enthusiastic about QuickBooks. It was also crucial that whatever program she bought be easy to learn and use. QuickBooks has been that.
Ease of Use
Everybody who has worked for me has found it very easy, she says. It basically asks you questions and you fill in the blanks. Its very human friendly.
Her computer reseller handled installing and configuring the software and gave her a tour to show her how to use it. Its mostly self-explanatory, though, and there is always pop-up Help information to guide her if she forgets.
The only slightly hard part was initially entering all the wholesaler and item information and printing the first batch of barcode labels. But I dont remember it being really hard or pulling my hair out over it or anything, she adds.
Now its just a question of occasionally entering a new supplier and new items, and printing barcode stickers for newly arrived shipments which is a lot easier than hand printing prices, Kennedy points out.
All of this just goes to show that it doesnt take a lot for even a very small business to operate with all the sophistication of much bigger companies. And the pay-backs the time and labor saved and the business intelligence a program like QuickBooks provides keeps delivering a return on the initial investment for years.
Based in London, Canada, Gerry Blackwell has been writing about information technology and telecommunications for a variety of print and online publications since the 1980s.
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