When we talk to retailers about their approach to buying and using POS in their stores often the discussion proceeds something like this: Retailer – We are spending £1 million per year on our POS and are looking to reduce our costs and cut our budget this coming year. Simpson Group –Why is this – is the POS not working for you? Retailer – Well it’s a big cost to the business and we’re looking at all our costs at the moment. Simpson Group – If you’re looking to reduce operating costs and the POS isn’t creating any value why not just stop using POS completely? Retailer – That would be going too far. If we did that we think it would negatively impact on our sales. Simpson Group – You think or you know? Retailer – Well we can’t be absolutely certain as we can’t measure the effect of POS on sales can we? OK so if there’s an acceptance that removing POS entirely from your shops will negatively affect your sales, then using POS should have a positive effect upon your sales. Maybe but it’s not quite as simple as that. It depends on how you use POS. So in the light of this discussion let’s consider the title question again – Is POS an operating cost or a marketing investment? The answer is it can become either depending on how you approach it. If you treat POS as a cost of your business then it will become exactly that. However, if you view it as an essential investment in building your brand and growing your sales, then it will become exactly that. Just as we become what we do; what we do defines what we can achieve. So POS can either be dull and uninspiring or bright, fun and compelling. The effect of either can be measured. You could spend £5 on a flat, standard sign or poster and watch as sales stagnate or fall. Or you could spend £500 on a disruptive piece of window theatre and sit back with a smile on your face as sales grow by double digit margins. Which option provides the overall lowest total product cost to the business? Well obviously the second option despite the price being 100 times more than the first option. But again we hear you ask can it really be measured? Yes it can and we do. If you can measure your current footfall and conversion ratios, then controlled store testing, measuring before and after figures can provide the answers. Our ROI Calculator considers four key strategic areas of your business:
- Wastage – where is the business wasting precious business resources?
- Operating Costs – how is this affecting my business’ ability to grow sales?
- Marketing Process – how can I make my marketing process more effective?
- Sales Growth – how can I innovate our in-store promotions to increase sales?