SSCS Technology allowed Austin and Calvin Barney to uncover the profitability in every nook and cranny of their store.
Seeing the Store through New Eyes
In Parts 1 and 2 of this profile we described how the Dug Out, a high-volume, family-owned convenience store in Spanish Fork, Utah went from no computerization at all to implementing a full suite of SSCS software to help identify, manage, and unlock the profit potential of their store.
Under the watchful guidance of brothers Austin and Calvin, the Barney family didn’t hold back in their approach, fully investing in the Computerized Daily Book (CDB) back office system, Central Price Book (CPB) enterprise pricing management, Hand-Held Data Processing (HDP) scanning and inventory solution, and Transaction Analysis (TA), an application complementary to the CDB that records POS sales transactions and organizes them into actionable information.
Each tool ended up contributing in its own way to Austin and Calvin’s ability to see their family’s store through new eyes. “Now that they had the right solutions at their disposal,” says SSCS Sales Associate Shon Allen, “the Barneys became very motivated to explore every nook and cranny of their operation to find undiscovered profit they didn’t previously recognize.”
Last week we showed you how a single module of the CDB, EDI, allowed the Dug Out to proactively manage item profit margins continually over time. Now let’s explore a few other ways SSCS software has beneficially impacted their store.
Uncovering What Really Works
A fundamental aspect of the CDB that appealed to the Barneys was the system’s ability to help manage multi-item promotions – for instance, three energy drinks for the price of two; or price reductions on chips, a sandwich, and drink when they’re purchased together.
Promotions aren’t a gimmick; they are fundamental to a store’s ability to compete—yet they’re difficult to manage effectively.
“You can’t tell which promotions work by guessing,” states Austin. “On the surface selling more cans of soda looks good, but if your margins are too thin you’re losing money. You need detail to make the right decisions, and SSCS software gives us that. We can build, item by item, as many promotions as we want. Then we decide and record how to distribute the discount across items. Once we do that, we send the information up to the register where items will be recognized as part of the promotion and discounted accordingly. The automation also makes sure the promotion starts and ends when it should.”
In addition to removing the potential for manually induced errors, the CDB allows the Barneys to review the performance of their promotions on a continual basis assisted by focused reporting and documentation. Adjustment of item margins and promotion-related information (or complete deletion of the promotion) can then take place.
Fine tuning promotions is an example of how the Barneys got control back over their store, but the CDB’s ability to separate each inventory item into discrete parts (list, cost, and margin, for example) and provide the means to adjust them pays off in ways that impact the entire store.
The Dug Out’s Foodservice program also benefits from SSCS tools and applications. Take the deli sandwiches the store sells, for example. The detail of CDB item processing allows the Barneys to break down proportionally the cost and price of each ingredient that goes into the recipe: bread, meat, condiments, even wrapping material, if required. These increments are tracked out of inventory and reordering can be automated, if desired.
“SSCS gave us the ability to really appreciate, for the first time, how well the fresh items made in house were doing,” says Austin. “It was so much better than trying to figure this stuff out with a spreadsheet, and it confirmed that our Foodservice offerings did much better for us than pre-packaged food and snacks. They weren’t loss leaders after all, so we adjusted our inventory mix accordingly to take advantage. In addition, we got a more precise idea of just how much waste was costing us so we could take steps to reduce it effectively. I don’t see how anyone assembling food in their store can proceed profitably without the kind of feedback SSCS Technology provides.”
An Effective Afterthought
One of the biggest contributors to the resurgence of the Dug Out was a piece of technology that Austin almost considered an afterthought—at first. “The CDB back office with SSCS’s inventory scanning solution got most of our attention at first and for good reason,” he says. “But as we moved forward and got comfortable with the system, Shon pointed us in the direction of another tool had a huge impact on the health of our store.”
That tool was Transaction Analysis, SSCS’s web-based application. The program provides a receipt by receipt, date-stamped feed of sales data from the POS as transactions occurs. The system then organizes the information into a reporting structure that makes it easy to uncover trends and take action on them, which is exactly what the Barneys did. “It was almost like an added bonus,” Austin recalls, “that we really didn’t expect.”
Receipt level detail has proven a source of support for the Barneys’ quest to get the most accurate, profitable product mix. The store’s top sellers are easily identified. The basket mix of each transaction is also available, so patterns regarding which items sell with other items are documented, particularly useful for stores figuring out the contents of their promotional strategies. “An accurate picture of consumer behavior helps us stock items that move off the shelves,” adds Austin.
Where Transaction Analysis had the most immediate impact on the Dug Out was its ability to identify theft and take action to resolve it. “You see everything that’s passed through the POS including suspicious activity like excessive voids and no sales or mysterious discounts,” Austin states. “With a little bit of research and a good in-store video system you can find out if theft is happening and take the appropriate action. You can’t do that with spreadsheets. Within a month we were saving $1500 thanks to Transaction Analysis.”
We’ve just scratched the surface regarding what SSCS Technology has done for the Dug Out, including the CDB’s seamless interface to Intuit’s QuickBooks accounting software (useful for General Ledger exporting) and the fuel analysis tools that help the store maintain its weighted average margin at acceptable levels.
“I can’t say enough about SSCS Technology,” says Austin. “We were on the verge of selling our store because of poor performance when we invested in it. In a few months we could see the difference it was making. It cut down on paperwork while giving us the clearest picture of our store that we had ever had. Take it from me; we weren’t sorry to see our big file cabinets go. SSCS really is a total solution, not just because of the reach of its software, but because of the people and the company that stand by it, too.”