If you're a retailer, you may have mixed emotions — excitement, worry, a longing for simpler times — when you consider converting to computers in your store.
Your hesitation aside, you're probably aware of a growing trend: Up and down Main Street, your peers — from tiny specialty shops to big retailers — are converting to automated systems to manage inventory, transactions at the check-out stand, and other essential jobs.
Is it hard to switch to a "high tech" solution?
To find out, I visited Oberto Sausage Company — the Seattle-based king of beef jerky — to witness the first day that a new automated POS system would come online. Mind you, I was seeing only a glimpse into a process that entailed behind-the-scenes planning.
I imagined the frustrated cashiers, the cries for tech support, the angry lunch crowd packed like sardines behind a counter. To my relief, there was little drama. What I witnessed was a fairly uneventful first day. The secret of Oberto's success? Two things: Good planning, and a helpful implementation partner.
Here are five basic steps that Oberto used to get a new automated, POS system up and running — without a hitch.
On This Page
 | Step 1: Deciding on a New POS System |
| Step 2: Choosing system components |
| Step 3: Implementing the POS system |
| Step 4: Training staff |
| Step 5: Applying the system to all four stores |
Step 1: Deciding on a New POS System
On the first day of using the new computerized system, employees asked only minor questions (and some seemed to be looking for reassurance) as they navigated around the new touch screen computer. At least one cashier was delighted. "That (old register) is going to the Museum of History and Industry!" he said.
A few months before, David Heinz, Oberto's retail operations manager, had begun searching for an automated system by leafing through the yellow pages.
His goal: To increase business for the company's four outlet stores, which were selling in high volumes, but not profitably. He suspected that the lackluster profitability stemmed from poor inventory management, inconsistent pricing, and no sure-fire way to tell if a product was selling well or languishing on the shelves, he said.
Heinz wanted a new computerized system to more accurately control inventory and, potentially, boost sales. He had identified five POS systems — rejecting them all because they were offered by companies with no implementation or support staff. He eventually hired Randy Roe, a principal at Turnipseed Technology Design in Seattle and Microsoft Certified Partner, who designed and implemented the new system.
After much research, the two men chose a software system, Microsoft Dynamics Retail Management System (Dynamics RMS) "We worked together to design the right POS system — software, hardware, and networking," Roe said. (Need help or information from an implementation partner? Find one near you.)
Step 2: Choosing system components
After the software was decided upon, the two men chose the hardware and peripherals. "We evaluated five different touch screen terminals," Roe said. They chose hardware from Touch Dynamics, including Epsom receipt printers, MS cash drawers, and Metrologic Orbit Scanners.
Oberto had its own IT department, but Roe delivered the hardware in boxes to the company's main store. (Most retailers don't have an IT staff and rely on technology partners to set up the software and hardware for them.) Depending on the size of the retail business, implementation of a new POS system can take mere days to a few weeks — with cashier training taking about an hour, Roe says.
Roe installed both Microsoft RMS's Store Operations, the software for single store functionality, and the system's Headquarters module, the application to maintain all the data between multiple stores at a central location.
Step 3: Implementing the POS system
Two steps were used to implement the new POS system. First, the software was implemented in a "pilot" store. This allowed Roe and Heinz to fine-tune the system before it was applied to the other three stores.
The second step was the most labor-intensive: Figuring out a retailer's needs. Roe helped Heinz customize the system for doing everyday processes — such as managing inventory, creating sales reports, and tracking supplier and customer information. "(Retailers) need to ask, 'How do I want the system to do my job more efficiently?"
Once the procedures were customized, the details — accurate pricing on all of the retail stores' items — were entered into spreadsheets and later imported and edited in the system, Roe said.
Heinz was particularly interested in two things: the system's "end-of-month reconciling" feature and the "daily sales reports" that would show which items were selling well, he says. Oberto store managers said they wouldn't miss having to do physical inventories on Saturdays and Sundays — a tiring and frustrating chore.
"We've had frustrations in trying to understand our margins," explains John Blackford, a manager with Oberto.
Oberto faced several challenges
Overall, Oberto had several challenges, including:
| • | Keeping better track of inventory. Heinz needed to figure out which items were stocked at the outlet stores and how store managers were maintaining stock levels. |
| • | Accounting for all items. Some items at Oberto's retail stores had barcodes; some did not. Beef jerky was sold in different multi-packs, but there were also "caddies" and "boxes of caddies" for the beef jerky. Before the automated system, the stores had no way of taking a caddy out of stock and accounting for it. |
| • | Classifying bulk items. "I need to tell the [new POS] system how to break down the boxes in the stores," Heinz said. |
| • | Departmentalizing items. Roe advised Heinz on how to departmentalize and categorize Oberto product inventory. For example, the company's top product, beef jerky, had several styles and pricing, including thin style, thick cut, and different flavors and peppers. The stores were selling lots of jerky, but they weren't turning a profit. Heinz had no way of knowing how thin style was doing compared with thick cut. Plus, there were multiple SKUs that went with each style. |
| • | Dealing with older products. When jerky gets older, its price needs to be reduced. "They needed to know the costs of the product on a daily basis," says Roe. |
How the new POS system addressed the challenges
With the new system, Oberto was able to:
| • | Look at detailed sales reports. Heinz can now view detailed sales reports and understand profits by day, instead of finding out only at the end of the month what products are selling. He can adjust all business decisions based on real information instead of assumptions. (Plus he can do it remotely, too.) |
| • | Know which items aren't selling. The system's "valuation reports" indicate quantities of products on hand and by dollar amount. "If the value is too high and the store isn't selling enough of an item, a retailer is wasting floor space," Roe says. About 20 square feet of the main store was stocked with inventory that wasn't selling, Roe said. |
| • | Track employee charges. In its old system, Oberto had a tough time tracking employee charges. Oberto needed the system to give employees a discount and deduct store purchases from their paychecks. |
Step 4: Training staff
Staff training happened after all of the other issues were addressed. This proved to be the easiest aspect of the implementation. Three of the four Oberto store managers said they were computer savvy. One wasn't sure.
At first, the brightly-colored touch-screen computers seemed exotic. But overall training time took only a few minutes, Roe said.
"It was pretty easy," said Flo, the lead store clerk. During a busy lunchtime, he pointed enthusiastically to items stocked on the shelves — the boxes of smoked salmon, oysters, and dried fruit. He said he was eager to bar code them all.
Step 5: Applying the system to all four stores
The last step — getting the system to work in all four stores — applies to Oberto and other larger businesses with multiple stores. (For single-front retail businesses, steps one through four is enough to run the new automated system.)
In this step, the information was "uploaded" from the pilot store and exported to the remaining three stores, Roe says. "As soon as we did that, all inventory was synchronized and everyone was working with the same information."
In the end, Oberto had unique challenges. "But most retailers think of themselves as unique, Roe said.
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