10/08/2019
How toy stores can sell more with a point of sale
by Alix Friser, Lightspeed POS Inc
The holidays are a critical time for retailers, and possibly none more so than toy stores. Along with clothes and gift cards, toys top the most-bought lists year after year. On paper, the festive period is an excellent time to be a toy retailer – but with a popular product comes competition.
You can run holiday promotions, host seasonal events and run the best marketing campaign in town. However, if your inventory is working against you instead of for you, your promotional efforts could be all for naught.
If you want to boost your holiday sales this year, optimizing your inventory can get you there – and to optimize your inventory, you need the right tools.
Holiday readiness with a POS
When it comes to getting holiday-ready, consider what a point of sale can do. A modern POS does more than process transactions. Point of sale systems can monitor stock levels, collect data, manage customer profiles, ease ordering and much more, including the following.
Set inventory reorder points
Your best sellers flying off the shelves seems like a good sign, but if you’re out of stock during the holiday-shopping period, you’ll lose out on revenue. Keep an eye on upcoming toy trends going into the season (and run your own reports. More on that later).
A POS like Lightspeed Retail comes equipped with the power to set inventory reorder points. Once you’ve discovered your bestsellers and crowd pleasers, set the minimum level at which you need to purchase more stock. The system gathers this data in a low-stock report and lists out what needs to be replenished as items sell, so you have plenty of time to reorder hot holiday toys.
Ensuring you’re never low on valuable stock does more than keep you ready for a steady stream of sales in-store. It also opens up the world of e-commerce for toy retailers who are worried about tracking and maintaining stock. As reorder points take all of your stock into account, a brick-and-mortar location and its online presence don’t have to compete for
inventory if numbers get low – because they won’t.
Track your sales history
A POS is already processing your transactions and inventory levels. Why not put that data to work as you get your toy store ready for the holidays? Whether it’s through built-in reporting capabilities or an advanced analytics module, there are many useful reports you could be running.
• Recently out of stock with sales: a handy way to see if you should expand your reorder point strategy. This kind of report should tell you what toys are off the shelves, ranked by quantity. You can use it to see if there have been any sudden increases in demand you should account for in your holiday readiness plan; and
• Sales by category: this kind of report will tell you how your categories and subcategories are selling. Specialty toy retailers will particularly benefit from this kind of report; your inventory is an investment, and there is no point in stocking niche products that aren’t resonating anymore.
Assess your stock
Your bestsellers aren’t the only products you need to keep an eye on during the holidays. Dusty inventory – any toys that haven’t sold in a set time, typically 180 days – clutters the shelves. Without a way to track old inventory, you can end up with deadweight holding your purchasing power back during the holidays. You could also become backordered without realizing it, which leads to delays that make or break the holidays.
Luckily, a POS can help here, too, because it’s been keeping track of your stock. To make sure you’re not being held back by any inventory snags, look to your POS or analytics module to run the following reports.
Negative inventory: this is a particularly vital report to look for. Negative inventory levels mean something went wrong – you forgot to receive a PO, you over-transferred to another location or a mistake was made in a vendor return – but you were still able to complete sales. Find stock discrepancies fast during the holidays.
Dusty inventory: run this before the holiday shopping season starts to pinpoint any areas of your inventory that you might need to adjust. If dolls from a particular line have stopped selling, there is likely no point in stocking up on more as what’s popular shifts.
Optimize inventory classification
How have you set up your inventory? What classifications have you set? Are you using your subcategories? Specialty toy retailers carry many product variants; are you using product matrices to classify them easily?
Organizing your inventory makes the data your POS gathers more accurate and more actionable. Once you’re able to collect data on how different products and categories are performing, use A-B-C classification to sort your inventory by thirds according to their importance to your business.
The first category, “A” inventory, should consist of around 20 percent of the items in your inventory and make up 80 percent of your sales. The second, “B” inventory, should cover the 30 percent of your inventory that makes up 15 percent of your sales, while the “C” inventory covers the remaining 50 percent and 5 percent, respectively. Use these classifications to prioritize restocking during the holidays, as products from A will sell faster than products from C.
Leveraging the power of a POS for better sales
What does holiday readiness with a POS look like in action?
Now that you’ve organized your inventory and armed yourself with data about your stock, you’re ready to craft some special holiday promotions.
Gift bundles help you upsell during the holidays, and now that you’ve identified your top sellers, you can start sorting them into tailored groups. Check your category reports and go from there! Boys’ gifts and girls’ gifts are easy bundles, but they’re not descriptive.
If, for example, you’re selling science kits well, build a bundle based around the young learner. Include one or two top-selling products, and then examine your dusty inventory report. Are there any items that aren’t moving that could be bundled with the superstars? Keep your A-B-C classifications in mind to build balanced toy bundles that optimize value for you and your shoppers.
Repeat for each top-selling product, create the bundle as a grouped or boxed product in your POS, then display your gift bundles prominently and promote them in your holiday advertising.
You’ll move old inventory, inspire impulse purchases, help holiday shoppers and boost your sales – all with help from your point of sale.
Lightspeed is a cloud-based commerce platform powering small and medium-sized businesses. With smart, scalable, and dependable point-of-sale systems, the Montréal, Canada-based firm is an all-in-one solution that helps retailers sell across channels, manage operations, engage with consumers, accept payments, and grow their business. For more information, see the ad on inside back cover and visit lightspeedhq.co
