A Key Investment

Many control states across the country are discovering the benefits of computerized point-of-sale systems. A good p-o-s system does more than just tally sales and keep tidy databases; it is a marketing tool, enabling retailers to boast in-depth product knowledge and gather insight into consumer buying habits. The question is, how does a store owner or manager find the best system to suit his or her needs?


Perhaps the best way to begin researching computer systems is to talk to other retailers. Industry trade shows are good places to find retailers who are not your competitors but who run operations similar to your own. Also, trade shows often offer seminars on the subject of choosing computer systems. Even if you decide to stay home, you can get important information from the companies themselves. Many send out free demo disks of their products and an increasing number of them have websites on the Internet.


Indeed, once you begin researching computer systems, you may find yourself under an avalanche of information. Dig yourself out by focusing on the companies that develop systems for operations of your size. Some focus strictly on large chains, such as national supermarket chains, others on smaller chains run by specialty retailers, such as liquor stores, and still others focus strictly on one-store operations. When asked, most computer companies will tell you what their target market is.


Not surprisingly, the companies that offer systems aimed specifically at beverage alcohol retailers say they have many advantages. While some computer companies have a retail software system that they modify to meet the needs of different types of retailers — they may, for example, sell essentially the same system to a card shop as to a beverage alcohol store — the companies that specialize in beverage operations say theirs are built from the ground up to meet those needs.


“There are very specific things that liquor retailers do that no one else does,” said Chris Glor, manager of the retail systems division of Amherst Systems, headquartered in Buffalo, NY. He cited the example of retailers figuring out the federal excise tax, which is based on the alcohol content per gallon of products.


For a computer system to be “a jack of all trades and a master of none can be pretty dangerous,” agreed Rick Cole, director of marketing for Datasym, a company, based in Ontario, Canada, that sells 60% of its systems to liquor stores, convenience stores and small grocery stores. “It doesn’t take too long to realize that, given the unique aspects of your business, a system that seemed all-purpose has limitations that you can’t get around.”


One feature beverage alcohol retailers should look for in computer systems is the ability to handle products that are ordered and sold in different packages and venues — for example, the various bottle and can sizes, by the six-pack, by the case and as either a warm product or a cold one. Retailers who sell fine wines often find they need a computer system that can generate its own bar codes, which many imported wines lack. “These are fairly subtle things, but they make a world of difference,” said Amherst’s Glor.


Computer suppliers drawing up a list of exactly what you need your system to do. “From there, if a system doesn’t have 90% to 95% of what you are looking for, you’re wasting your time [considering that company,]” said Robert Brown, president of ProphetLine, a company based in Fort Smith, AR.


Both retailers and computer company representatives warn against focusing solely on a single feature or two when making your buying decision, though they do suggest sticking to what you use everyday — customer, pricing and inventory features. And no matter what system you ultimately choose, the most important thing is that you feel comfortable using it.


The quality of the actual computer system isn’t the only aspect retailers have to consider. Equally important is the stability of the company behind the product. “That’s crucial,” said Brent Melbye, national sales manager for Cam Data Systems, a company based in Fountain Valley, CA. “Fifty percent of my business is replacements: selling systems to retailers who can no longer get support or enhancements for their current computer system.”


Melbye suggests asking computer companies for their financial statements. “Companies usually have something they can give you, and if they don’t, that should be a red flag, a cause for a little bit of concern,” he said.


To begin with, look for companies that have been in business for several years. “Once you lay your money down, that’s just the beginning,” said Atlantic System’s Novellino. You need to have a company that can provide you with service support for all the years that you will be using your system and one that will regularly provide you with enhancements.


Ask the companies you are considering for references — and insist on ones that run retail operations similar to your own. Calling these retailers can give you valuable information, not only about how happy they are with the system but also about the relationship they have with the computer company.


Tony Pitale, president of Innovative Computer Solutions, a company, based in Sea Girt, NJ which specializes in systems for beverage alcohol retailers, suggested trying to get beyond the sales pitch when talking to computer companies. “Often, who you are talking to is really a salesperson. They may not understand and know the system and they may tell you what you want to hear to make the sale,” he said. He suggests talking to the owner or a programmer at the company and even, if feasible, visiting the company’s offices. “That way, you get to know the people you will be dealing with.”


 


LOOKING FOR SUPPORT

Exactly what kinds of support services — and what they cost — should be part of your purchase decision. Problems with software can usually be handled over the phone. “Not every call means that something is broken,” explained Atlantic System’s Novellino. “Most of the time, people call to ask how to do something.” Some companies can access the system running in a store via modem, so that the “help desk” employee at the computer company can see exactly what is happening. Companies with this ability can also load updates into a retailer’s system by modem, rather than sending the retailer a disk of enhancements that he/she installs themselves.


The support offered for hardware varies. Some companies sell both the hardware and software components of their systems. These will often provide support for both. The advantage of this, said Cam Data’s Melbye, is that the retailer needs to call just one number.


Some companies, especially the ones offering systems for smaller retailers, sell only the software. Though they will offer guidance — such as lists of preferred companies and products — they expect retailers to buy and install the hardware themselves. In this case, retailers can arrange a support contract with the hardware company. “The beauty of this is that you have a local rep available and able to make on-site visits for the hardware, while we handle questions about software through our 800 line,” said Bill Simmeth, president of Merchant Software Corp, a company in Morris, CT, that offers a software product called Liquor Store Controller.


Though hardware in general is becoming more reliable and less costly, what kind of hardware you use is still an important consideration. So much so that Vince Van Den Braak of Van’s asked his software company to make their system compatible with IBM’s SureOne point-of-sale terminal. Not only can the SureOne, which is PC-based, handle more functions, but Van Den Braak liked the assurance of buying from IBM. “I was buying the IBM name. I have used IBM [products] and I knew IBM’s reputation,” he said.


 


INSTALLATION

Once a computer system has been chosen, planning for the time and effort involved in its installation is crucial. How difficult the process will be depends on how large and complex the system is. For example, smaller retailers, who are looking at companies that offer only software, should ask those companies what kind of assistance they can expect when it comes to setting up their systems. “Our system is very, very simple,” said Gary Yancich, president of Software Creations in Evergreen, CO, whose Electronic Merchant software is meant for one-store operations. “Even if you know nothing at all about computers, you can invite a friend who is familiar with them — and they don’t have to be an expert — to help you. And you can always call us.”


Though ACR Systems, in Jacksonville, FL, sells just software — for larger chain operations, generally with revenues of at least $40 million per year — that company will buy the hardware for the retailer and set the system up. “Basically, we help the retailer obtain the best pricing available. We procure, assemble, test, bundle, ship and install the for the store and deliver one invoice,” explained Valerie Marquis, marketing services coordinator.


Many of the companies with complex systems will come to your stores to install their systems. Others are installed by their resellers, the local dealer who sold you the system. Make sure companies detail how the installation process will proceed, how long it will take, what they will do and what you are expected to do yourself.


Even in the case of complex systems, the actual installation of the equipment and software usually takes only a few days. The most time-intensive part of the project is entering the operation’s information into the system: how its departments are set up, information on its distributors, if the system can automatically generate orders and, of course, the operation’s inventory information. Many companies offer inventory databases already loaded with information about beverage alcohol brands — such as UPC codes and bottle sizes — to give their retailers a head start. Some retailers handle the job of entering their inventories by hiring temps. In fact, many companies point out that a store can operate their system even before the inventory information is completely entered.


 


LOOKING FOR SUPPORT

Finally, don’t forget to check what training the computer company will provide. While cashiers can usually learn what they need to know in less than an hour, managers and operators need to learn about more complex tasks. Innovative Computer Solutions, for example, offers retailers 40 hours of on-site training as part of its package. “And owners and managers do use that 40 hours,” said Pitale. Atlantic Systems even offers monthly review classes, held at the company’s main office, located in Spring Lake, NJ, as part of its support service.



Computer companies themselves warn that, like many markets, theirs is one in which the buyer has to beware. But with careful research, retailers can find reliable systems geared toward their operation for a reasonable cost — systems backed by companies that will get them up and running, and keep them that way.

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