Most businesses are slowly implementing technology in their operations. One of most applied technology is the point of sale system, which is a computer-based order entry machine that captures the data of materials checked out by reading the Universal Product Code (UPC). Alliance supermarket have successfully used POS data in tracking and replenishing stock. However, there is still more that can be captured at the same POS and used to benefit and sustain Alliance Supermarkets in the market. This paper explores some of the data pertinent data that could be used by Alliance Supermarkets as well as suggest a new method that can be used to obtain purchase information from individual customers.
What information may help Alliance reduce costs while providing better service?
Most businesses are tending to roll off the traditional point of sale terminals that were more of business-based rather than consumer oriented. Alliance supermarket may use the information obtained at the point of sale for customer relationship management (CRM) (Samli, 2015).POS with CRM based functionality will be able to record the data of the customers. Apart from customer relationship management the data recorded could be important in sales forecasting and marketing. The demographics of the customer are usually recorded. This includes their names, residence, age, gender, career, email address, phone numbers, order information and in some cases a medical history of the customer (Angeles, 2014; Samli, 2015). The other information that is recorded at the POS and could be of importance to Alliance Supermarket includes the daily, weekly, monthly and annual sales. Each and every data could be useful by Alliance Supermarket in realizing profits while at the same time reducing costs.
From a single transaction, the POS is able to capture and automatically store the data captured in a database that are always stored in a separate location for security purposes. Some POS are capable of transacting payments from debit and credit cards (Angeles, 2014). Based on this information the POS is able to produce an individual report that outlines their preferences and how often they visit the store (Samli, 2015). Being that there are customer purchase history and contact details, they can be informed through the phone call or email of new products that fit the description on their profile in the system report (Angeles, 2014). This is useful in the long run as the redundancy in the manual systems is reduced and the cost of labor is saved.
The data that is recorded at the POS could also be used to improve customer experience by keeping track of what they like and having them send feedback on the services and products that are offered. The access of this in real-time and can aid the company in target marketing since the data can be mined and used in the segmentation of the market based on the information that is at hand. Additionally, the manufacturers will benefit in that there will be an effective knowledge-based market segmentation for every product. This will also make it possible to forecast demands and make a rough estimation of the stock that will be required with time. Through targeting a specific niche or target market, it is also possible to undertake a cost-efficient promotional and sales strategy based on the intelligence collected from the POS.
Based on the customer history and purchase records, Alliance Supermarkets will be able to identify the loyal customers and create loyalty programs (Samli, 2015). According to Samli (2015), three customer groups can be identified: those who have a lot of benefit to the POS, those who are not worth pursuing and wasting time on, and those who frequent the shop and are likely to return (Samli, 2015). This could aid the supermarket in arranging for marketing campaigns as well as loyalty programs to retain the loyal customers. When there is product replacement the customers are likely to be informed and persuaded to make purchases.
Propose a new approach that could be used by Alliance by using the purchase information that can be obtained on individual customers.
As identified above there is much information that can be collected at the point of sale terminals about an individual customer. Unfortunately, the POS alone cannot be able to collect the information, and, therefore, there are additional requirements that need to be met by Alliance Supermarkets. For this functionality to be a success, Alliance Supermarkets should consider fusing it with Customer Relationship Management software (Samli, 2015). The CRM system will be able to collect the individual data of the customers whether be it those who log online to search for information or make purchases in case the supermarket has an online presence (Angeles, 2014).
Since the cost of implementation and maintenance of the system will be high, the supermarket should consider assessing the needs and thus integrate the new system that will allow it to smoothly operate with the POS (Samli, 2015). The data recorded would be mined using special algorithms within the CRM software and generate useful reports as well as allow an automated back-end process that will ensure effective customer management through timely communication (Angeles, 2014).
Assess ethical and privacy considerations of information gathered from the POS system or purchased items.
POS like any other electronic system has ethical and privacy challenges. First off, the hackers might access the information in the databases especially if they are being transmitted through networks (Kizza, 2013). Secondly, some unethical employees might be able to trade the data of the employees that can be used for ill purposes (Kizza, 2013). For instance, an employee or an unethical system administrator may decide to use the credit card information to impersonate a customer and thus manipulate fund transactions electronically. However, the company should invest in security as well as restrict access to the databases (Kizza, 2013).
The capabilities of a point of sale terminal should be appreciated. The competencies of POS can be optimized if it is integrated with a CRM system or software that will allow it to perform better and have access to individual information and further manage it. However, there are ethical and privacy concerns that Alliance supermarket is likely to encounter. The suggested strategies can go a long way in addressing these concerns.
Angeles, S. (2014, August 1). 5 Ways CRM-Enabled POS Systems Can Help Your Business.
Kizza, J. M. (2013). Ethical and social issues in the information age. London: Springer-Verlag.
Samli, A. C. (2015). Coping with retail giants: Gaining an edge over discounters. New York, United States: Palgrave Publishers.