Apparel Retailers Are On Mission POSsible

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Apparel Retailers Are On Mission POSsible

By Arvind K K, Senior Consultant, Consumer Goods – Domain Consulting Group, Wipro Limited & Manish Murthy, Business Analyst, Consumer Goods-Domain Consulting Group, Wipro Limited - 09/26/2016
Apparel retailers are looking to improve their in-store experience, while also being able to sell from any device, anywhere and acquire as many new customers as possible. What becomes vital to this mission is a customized POS application.

The functional designs of POS systems have not kept pace with retailers' evolving business models. Apparel organizations require POS systems that are simple and flexible enough to handle the needs of their operations and enable a seamless journey for their customers.

5 POS must-haves for the modern retailer
Retailers need POS systems that are simple yet sophisticated enough to handle their business operations. The primary mandate is to have a constant flow of in-store management data — such as inventory, sales, returns, pricing and all other information related to business functionality — so the information is seamlessly shared with all stakeholders across channels. The more sophisticated the POS system, the higher the initial cost will be to implement, but retailers will quickly see a return on their investment and break even faster.

Both the in-house POS systems (a must have for retailers) and the commercial off-the-shelf (COTS) POS products have their own limitations, but there is a way for retailers to have a POS system that transcends those limitations and fulfills business needs. No existing COTS product provides a complete solution, which can be the key for enhanced in-store operations. Apart from its regular day-to-day operational features, below are the important features that apparel retailers should leverage from their POS systems.

Inventory transfers. Each store will have three different types of “transfers” that include: returning defective merchandise, inter-store transfers of apparel products, and warehouse transfers during the end of fashion seasons. A well-configured POS system should be able to manage all these transfers synchronously, while also streamlining the inventory management process. Any major issue with any of these transfers will directly affect revenue and sales. An efficient system should require less manual intervention.

Customer relationship management (CRM). A general opinion is that CRM and POS are two unrelated systems. But, ideally, CRM is an extension of a POS system, with its own functionalities for retail operations. A CRM can be maintained as a separate system as well as an integrated part of the POS system. An effective solution is to have CRM functionality woven into the POS as the source system linkage will always enhance customer experience. This would also help in application rationalization and synergy between different business teams such as merchandise planning, store operations, marketing, etc., during customer-centric activities, including promotions and loyalty programs with necessary data points from the integrated system.

Promotions management. A POS platform can, and should, help with sales-promotion management. Sales and promotions play a key role in increasing customer loyalty and also generating revenue. Managing current sales promotions is an important activity for retailers, and a POS system should enable the business to provide the right promotions at the right time. Evolution of technology has resulted in multiple channel selling points, and a good POS system should be able to help with promotions management and apply it across multiple selling channels. This results in a seamless experience for consumers across multi-channel selling points. Basically, no customer should second guess whether they will get the same discounts or deals in store compared to online shopping.

Sales analytics. There is a lot of scope for analysis with the data obtained from the POS. Retailers should be able to derive the behavioral, demographic, sales and size patterns from the raw data obtained from the POS system. Utilization of this analytical data would be for:
  • Size pack optimization, which helps allocate right sizes at the right place;
  • Markdown optimization, which helps clear shelf inventory by minimizing losses;
  • Customer analytics, which understands buying patterns and creates promotional campaigns that can be used to create loyal customers.
There are no existing POS products with these extended analytical features. However, there is no reason why the conversation around an analytics-enabled POS system shouldn't start now. This would be something to consider in the future, once organizations realize how to utilize their raw data to improve bottom lines.

Footfall count. Footfall traffic is a key indicator of a store's performance. POS helps business teams to maintain and analyze different KPIs such as sales conversion ratio, street conversion ratio, staff performance metrics, promotions performance, staffing requirements etc. This helps to identify the stores that require additional attention due to their performance and help the retailers make the best decisions related to promotions, closing or expanding stores, inventory replenishments, deciding on the threshold inventory levels, and more.

Need for robust systems
POS systems are an integral part of any apparel retailer's business. Despite the high level of usage, POS systems are still in very nascent stages. Robust, simplified and standardized POS systems are a necessity in this increasingly competitive environment. All of the above features integrated with POS systems would certainly provide a cutting-edge product for the apparel business.


Arvind K K is a senior consultant for the Consumer Goods – Domain Consulting Group, Wipro Limited. He has around seven years of consulting experience in developing business focused solutions for manufacturing and consumer goods companies.

Manish Murthy is a business analyst for the Consumer Goods-Domain Consulting Group, Wipro Limited. He has worked for more than four years in business process optimization and has experience in implementing innovative solutions for manufacturing and consumer goods customers.


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