IBM is attributed with starting a revolution in US retailing in the early 1970s with the first point-of-sale (POS) systems. As would be expected, those early POS systems were mainframe units installed by large retail organisations and it wasn’t until the 1990s that the technology began to get a foothold in smaller retail businesses, including independent jewellery stores.
While the POS acronym has stood the test of time, the technology has advanced considerably since those early years. POS system distributors now talk of integrated software that offers a complete path-to-purchase across multiple retail channels, both in store and online.
This new, multi-channel approach to shopping has provided software suppliers with opportunities to incorporate advancements that focus on consumers and their buying behaviour as well as just ‘back office’ management – it’s all about improving the way businesses engage with customers and their changing shopping behaviour.
Malcolm Alderton, founder of Advanced Retail Management Systems (ARMS), has watched the changing retail landscape for three decades.
“POS and retail management systems have become vital for all types of businesses to not only survive but thrive in a time when so many companies are competing for the consumer dollar,” Alderton says. “In the ‘old days’ you used to be able to put jewellery in the showcases and know that it would sell. These days you have to be much smarter about what stock you have to avoid missed sales.”
There is no doubt that the old days have long gone but have the old ways? The average age of jewellery storeowners is 55 and higher, which explains why there is often a reluctance to change with the times.
Stores closing
Gordon McLister, Australasian manager of Retail Edge Consultants, believes it is not change that is the issue for businesses but the rate of change. Businesses must constantly review their processes if they are to keep up with relentless progression and many simply don’t move quickly enough.
“We are seeing two patterns in the industry: older jewellers closing their stores and new jewellery retailers entering the market – often from a supplier base or from outside the industry,” McLister says. “Typically it’s the new jewellers who understand data better and to make the best decisions you need data, facts and good judgment.”
The speed of change is certainly a major issue across all industries and staying on top of day-to-day issues is tough, especially for small, independent retailers. This is where software helps, according to Raeleen Kaesehagen, founder of Swim Jewellery Software.
“Life is already too busy; everyone is scrambling just to keep up,” Kaesehagen says. “The tools of POS and retail management free up valuable time of both the owner and staff. Without these tools independent business owners just don’t have enough hours in the day to do everything that needs to be done to keep up with the demands of the digital age.”
Alderton agrees: “Without a comprehensive stock management system, you will not have time to evaluate your inventory’s performance to ensure you always have fast-selling stock available. A good POS is an invaluable sales tool for any jewellery store.”
McLister adds that the management needs of storeowners have changed. “Many retailers have been analysing stock, identifying fast-sellers, and have a disciplined re-order system; however, sales people have been left floating – unmanaged,” he warns. “The latest computer systems provide in-depth analysis of salesperson performance, allowing the setting of goals.”
He also points to the need for better customer management. “The public have higher expectations – they want to be sold to, wooed and have all their senses tickled,” McLister says. “They expect to be marketed to; they expect a text message that their repair or lay-buy is ready; they expect to be made offers – CRM (customer relationship management) systems allow this to happen.”
Kaesehagen makes an interesting observation. Too often it’s thought that doing business in the digital age is about dealing with customers ‘digitally’, which can strip away the human interface. “The digital age doesn’t mean we have to service the client digitally; the digital age means we have to over-service the client, giving them an amazing in-store ‘human-based’ customer experience,” she says.
Kaesehagen’s point is more important to jewellers than most other retail categories because of the knowledge and trust factors required for jewellery purchases. Therefore there must be a balanced approach to the use of technology while maintaining many of the traditional ways of retailing, especially for small independent businesses that survive on the human touch. This is where retail management technology is increasingly moving; it integrates traditional tools like stock management, re-ordering, supplier management and financial data with modern tools that increase customer engagement, such as loyalty programs, social media, email marketing and mobile shopping.
The future
According to Kaesehagen, the next five years will see a further convergence of the four main channels: online, bricks-and-mortar, mobile and social. “Consumers are using a combination of online, mobile and social to shop before they visit a store. Being ‘found’ on these mediums is an absolute necessity (for businesses).”
Jewellers are often reminded that it’s much easier to do business with existing customers than find and develop new ones but the challenge for stores to be seen, or found online, in an increasingly competitive market is now crucial.
“For fashion jewellery, internet sales will continue to be strong because there is limited trust required by the consumer so the risk [of online buying] is low; however, and because of that, channels such as eBay are already clogged – try searching for an item and you get pages of hits,” McLister observes, adding, “The winners will be the retailers who have a website presence that people are driven to – the buying groups and major retailers can do this but it’s virtually impossible for an individual retailer, consequently the cost of their websites will never be recovered.”
Alderton points to the way that people find a jeweller is vastly different than it was 10 years ago. “The Yellow Pages is essentially gone and has been replaced with internet search so an online presence is no longer an option; it is a necessity,” he adds.
Alderton believes that the choice of brands showcased on a jeweller’s website will become even more important and that online sales for jewellers will steadily increase over the next five years, gaining more momentum towards the end of the time period. “It may even get to the point that some businesses will opt out of bricks-and-mortar stores altogether in search of the lower overheads and higher profit of an online business,” he says.
McLister doesn’t necessarily agree, and he believes that the traditional store is still vitally important for jewellery, especially fine jewellery: “For items above $200, internet sales will continue to be low volume because the nature of the product is ‘look and feel’ – even younger customers want this pre-sale experience.”
To some extent, a major confluence could be in the making – Gen Y is reaching the peak of their buying power at a time where many jewellers are approaching retirement. “As the younger, more technology-savvy generations start to gain more buying power, it will be important that a jeweller’s website be an online extension of the culture and atmosphere of your store so customers know what experience to expect if they shop with you,” Alderton says. “A jeweller’s website will be one of the biggest marketing tools to get customers through your door. The bottom line is people will come to your store if the website attracts them.”
With the increasing prominence of mobile devices in the shopping experience, along with a new generation of tech-savvy consumers – many of whom only know a world with the internet – the need for an all-encompassing approach across retail channels is most important.
Kaesehagen deals with the issue most succinctly: “Having a customer experience that is seamless across the various platforms and is ‘exceptional’ in-store is a must for any retailer.”
3 part Point of Sale report
Read about the POS Systems on offer
Interview with Malcolm Alderton, ARMS
Interview with Raeleen Kaesehagen, Octahedron
Interview with Gordon McLister, Retail Edge Consultants