Let’s get right to the point: There’s a lot more you can do with point of sale data than casually seeing what’s selling and what’s not and perhaps adjusting your orders in accordance with your own instinct.

Consider this example. Increasingly, smart retailers are warehousing point of sale data in databases and then, via software tools, mining it to engage in category management practices either in conjunction with their vendors or on their own. In these situations, the tools create demand forecasts for each item based on sales patterns. The benefits are significant. In addition to reducing inventory, including overstocked promotional items, category management allows you to recover sales by having in place, based on forecasting, appropriate quantities of individual SKUs. One retailer recently leveraged a software-generated analysis of its point of sale data to slash inventory levels by 30% and reduce the volume of overstocked promotional items on its shelves by about 65%.

Additionally, mining point of sale data for the purpose of practicing category management leads to more “efficient” assortments. For example, retail category management experts have long said that within the cereal category, retailers can garner a full 99% of their profits from 85% of the SKUs they carry. By applying analysis tools, they can then weed out slow movers and discontinue poor sellers,  yielding merchandise mixes that consistently produce a higher volume of sales.

pcAmerica’s Cash Register Express software offers retailers a cost-effective point of sale solution that makes data easy to access. More information is available at www.pcamerica.com. And for other ways to do more with point of sale data, see Part Two of this four-part series.