Article 39- What Your POS System Is Trying to Tell You

Over the years, I have seen plenty of retailers spend a great deal of money on a POS system and then use it mostly to ring sales, look up inventory, and print a few monthly reports that nobody acts on quickly enough.

That is like buying a good hearing aid and then leaving the batteries in the box.

A POS system should not just record what happened yesterday. It should help you decide what to do tomorrow. If you are willing to listen, it can tell you a great deal about your business: what products are gaining traction, what categories are getting stale, which items are selling only because you marked them down, what customers are buying together, and where your marketing efforts ought to be aimed.

In other words, a good POS system is not just an accounting tool. It is one of the best marketing tools in the building.

Your POS Is Showing You Customer Behavior, Not Theory

Retailers often think of marketing as the outward-facing side of the business: social media, email blasts, events, paid ads, loyalty programs, and whatever vendor promotion is making the rounds that month. But the best marketing decisions usually begin with understanding what customers are actually doing inside your four walls or on your website.

That is where the POS system earns its keep.

It tells you what sold, but more importantly, it tells you what sold at full price, what had to be discounted, what categories are turning, what brands are fading, and what items are quietly becoming dependable performers. That is not just inventory information. That is marketing intelligence.

If a comfort sandal line sells cleanly every spring without markdown support, that should influence how you market it. If a walking shoe consistently brings customers back for repeat purchases, that brand probably deserves more visibility in your email marketing, your sales floor presentation, and your staff training.

Too many retailers market from instinct. The better ones market from evidence.

“Top Sellers” Is Only the First Page of the Story

Most retailers know how to pull a report showing their top-selling brands or styles. That is useful, but it is only a starting point.

When I was in the shoe business, I wanted to know more than what sold. I wanted to know:

·         Which styles sold at full price and which ones needed markdown help

·         Which vendors were producing real margin dollars, not just volume

·         Which sizes were driving the sales and which sizes were sitting there like lawn furniture in January

·         Which items deserved a reorder and which ones deserved a markdown

·         Which products were selling across multiple stores and which should be transferred rather than reordered

·         Which categories were bringing customers back repeatedly

Years ago, we developed internal ways to flag merchandise based on how it was performing. In plain English, some goods were “reorder now,” some were “watch list,” some were “transfer candidates,” and some were basically telling us, “Please stop pretending I’m going to become a hit.” That kind of discipline matters. A POS system can help you identify winners early, move out of losers sooner, and free up cash for better merchandise.

That is not just inventory management. That is marketing support. You should not be spending your ad dollars, email space, and sales floor energy on products the data is already warning you about.

Size Selling Can Tell You More Than You Think

In a footwear business, size selling often tells a story before the sales summary does.

I have seen stores conclude that a style was a disappointment when the real problem was not the shoe at all. The problem was the buy. Maybe the store bought too broad a size run. Maybe it brought in too many colors. Maybe it loaded up too deeply on a style that only had a narrow customer appeal.

A good POS report can expose that. If a shoe is selling well in a tight cluster of sizes but not in the rest, that may not be a failed style. It may be a buying mistake. That distinction matters, because the wrong conclusion leads to the wrong next step. You either abandon a good product unfairly, or you keep repeating a bad buying pattern because you never bothered to read the evidence correctly.

Basket Data Is a Marketing Gold Mine

One of the most valuable things a POS system can show you is what customers buy together.

If a customer buys a premium walking shoe and frequently adds an orthotic, a better sock, or a foot care item, that should not be left to chance. It should shape your merchandising, your staff training, and your marketing.

In a good comfort shoe store, add-on selling is not about piling junk onto the counter. It is about solving the whole problem. If the customer needs better support, less friction, better moisture control, or relief from a pressure point, the second and third item may be every bit as important as the first.

Your POS can tell you whether those add-on opportunities are being captured consistently or missed every day in plain sight. If customers buying one category regularly purchase a second related category, that information can drive:

·         email campaigns

·         website recommendations

·         staff selling scripts

·         floor merchandising

·         promotional bundles and event themes

Sometimes the POS is telling you that you do not need more traffic nearly as badly as you need to do a better job with the traffic you already have.

Your Customer File Should Be Driving Better Marketing

If your POS captures customer history, it should also help you segment your customer base intelligently.

You should be able to identify:

·         top customers

·         lapsed customers

·         seasonal sandal shoppers

·         customers who buy only on sale

·         customers loyal to a particular brand or category

·         repeat buyers of walking shoes, socks, orthotics, or foot care items

That should affect how you market to them.

A customer who buys premium sandals every spring should not receive the same message as a customer who only shops clearance. A customer who bought a walking shoe and orthotic six months ago may be a good candidate for a sock or foot care promotion. A customer who has not visited in 18 months probably deserves a different message than the person who bought two weeks ago.

Blanket marketing is lazy marketing. Your POS system gives you the chance to be smarter than that.

It Also Warns You When Something Is Wrong

A POS system is not just there to celebrate the good news. It can also tell you when a problem is developing.

If return rates are rising in a category, pay attention. In a shoe store, that can point to fit issues, quality concerns, poor staff recommendations, or a product that looks better on the shelf than it feels on the foot. If average transaction value is slipping, it may mean customers are still coming in but buying less, trading down, or not being shown the add-on products that would improve both their experience and your ticket.

It can also reveal unhealthy markdown patterns, weak sell-through in a department, or inventory that is quietly aging while you are busy congratulating yourself on one hot vendor.

Ask a Better Question

Most retailers ask their POS system, “What did we sell?”

A better question is: “What is this information telling me to do next?”

·         Should you reorder more deeply into a winner?

·         Should you reduce your size spread in a weak style?

·         Should you transfer inventory rather than reorder it?

·         Should you feature a full-price performer in your next email campaign?

·         Should you target customers who have disappeared?

·         Should you train your staff to attach socks, orthotics, or foot care more consistently?

That is where the real value is.

Your POS system should be part of your marketing process, your buying process, and your management process. If all it is doing is recording transactions and printing reports after the fact, then you are using a very smart tool in a very dumb way.

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About the Author

Alan Miklofsky is a business consultant, former multi-store footwear retailer, and long-time advisor to independent retailers throughout the United States. He is the founder of Shoes.com and the former owner of Alan’s Shoes in Tucson, Arizona. Alan specializes in retail operations, merchandising, financial analysis, marketing strategy, and helping independent retailers improve profitability and long-term performance.