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Positioning for a Turnaround


It’s no secret that retailers are tightening IT budgets and that the technology projects that do get a green light must produce a strong return on investment to make it worth a chain’s while.

Point-of-sale systems are no exception, especially as more retailers strategize to get “back to basics” in light of the down economy, according to Chris Moreira, director of marketing for the retail division of Alpharetta, Ga.-based Radiant Systems, a provider of POS technology.

Associate editor/Web editor Samantha Murphy spoke with Moreira about how the economy is affecting the POS industry. Moreira also discussed how retailers should be positioning themselves today so they can remain strong once the economy finally turns around.

How is this economy different from other downturns? 

Retailers, and Americans in general, have not experienced this type of an economy in decades. What that means for retailers is that they need to be more practical and sensible when spending their IT budgets. They are shying away from selecting providers that require an extensive implementation process. Long-term implementations only delay their ROI and ties up their capital.

They are seeking affordable solutions with uncomplicated and rapid implementation processes and promise an undisputable ROI. Retailers have to learn how to get the most of out of their IT investments. Even as the economy improves, I think this trend toward maximizing dollars spent will continue.

Given the state of the economy, what trends are you seeing in the POS systems industry? 

Most retailers are looking to partner with technology companies that are strong financially and can provide value with a proven ROI. Retailers want best-in-class technology in every area of their business while minimizing the cost, time and risk associated with technology implementation. In this economy, retailers are especially determined to find store technology that can be rapidly deployed at a competitive price. The days of POS systems being linked to complex, high-risk enterprise application deployments are behind us. Retailers just want results.

Given that we are in an environment where many technology providers are barely surviving or are closing their doors, it is also important for retailers to take a long, close look at the company that will be manufacturing and developing their hardware and software.

Since the economy is forcing many retailers to “get back to basics,” where does POS fit into the mix? 

Inventory management is at the core of every retailer’s “back to basics” strategy. It is imperative retailers have the right inventory at the right time, in the right place and at the right cost.

A robust POS system provides retail management with the key data they need to optimally manage inventory and make business decisions. Whether it is inventory turn rates, sales-to-stock ratios, customer-loyalty patterns, or vendor purchasing advice, having this data empowers a retailer to make proactive decisions that improve business efficiencies and optimize capital usage.

Another fundamental is to focus on increasing sales from loyal customers. We are seeing more interest in offerings targeted to specific customer preferences, loyalty promotions and a wide use of gift cards across all markets. Loyalty programs and customer tracking built into the point-of-sale workflow is very critical to make this happen.

What are the key elements retailers should be focusing on as IT budgets tighten? 

Retailers should focus on implementing and growing solutions that offer a low total cost of ownership and that provide a quick ROI. It is also important that retailers choose versatile solutions that provide key metrics and can help them measure the health of their business. Again, it’s extra imperative that they partner with strong companies that will continue to develop features, provide support and remain dedicated to the success of their business.

How will using certain solutions help retailers move forward once the economy turns around? 

For one, retailers will see an ROI by the time the economy turns around so they will be in a much better position. Plus, their business will be healthy. Retailers that take advantage of this slower time to effectively manage their inventory, cultivate loyal customers and negotiate superior pricing with their vendors will be in a position to be very profitable and grow as the economy improves.

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