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What You Can And Should Be Doing With POS
An Interview With Epicor's Steve Bieszczat
Steve Bieszczat is senior VP of marketing at Epicor. He has been with the company for 25 years and has worked with POS for all of that time. He led the initiative to take Epicor into the pharmacy market, because he thought the market was under-served at POS. In this interview with ComputerTalk senior editor Will Lockwood, Bieszczat talks about how he sees POS encompassing inventory, price, and margin management, as well as reporting. He outlines where pharmacies new to the technology should look for early ROI and where old hands with POS can turn to achieve new gains in productivity and efficiency, with particular emphasis on the impact POS can have in a multilocation business.
CT: Steve, let's start out with the big picture. What is the strategic view pharmacists should take when it comes to POS?
Bieszczat: Being able to run multiple locations with a single view of the business is, to me, ultra important. And this is a trend, as I think we are seeing consolidation over time as single locations get bought up by the big chains or a local, regional operator. The way I see it a fair amount of this consolidation is going to go to the local and regional operators as older pharmacists look for an exit strategy, with the result that the demand for multi-store systems is increasing.
CT: Let's talk about store management and some of the key ways to structure POS to manage multiple stores.
Bieszczat: The biggest benefit you get is visibility of the enterprise from a single location. The cases are too numerous to mention all of them, so I'll just mention a few. One is a consolidated view of daily sales. If you are a principal and you want to look on your phone to see what sales levels are across 11 stores, you can do that. If you are considering making a purchase, you can see inventory across the stores. You can see how much cash is in the draw at any location. With POS built for a multiple location pharmacy, you can pick up your phone, your iPad, or whatever and look at any one of 200 activity measures at a remote store.
You can also make changes from one spot and make them consistently across locations, while easily creating exceptions if there's a store that has different pricing or security requirements. A good example here is a price change, with new label printing driven remotely as well. The main thing is that you don't have to go from store to store to understand what's happening at each location or make changes today.
CT: For someone who is new to modern POS, what are the best ways to get the most out of a new system? What are the low-hanging fruit?
Bieszczat: The lowest hanging fruit is asset protection. Because all sales are rung up and it's obvious if they aren't. You also know what people are being charged; how much cash is in the drawer; what's been checked into the safe; who gave a discount; and who voided, credited, or returned something; All this is locked down by the audit trails and security that a POS system naturally imposes. You hate to think about it that way, but this level of control has a tremendous effect on the productivity of a business. And you get this by turning POS on.
CT: So you get a high level of accountability right out of the box. What else?
Bieszczat: Another area is pricing and margin program deployment and management. This could be price increases or decreases, setting margins by department, or anything to do with pricing strategy. You now have a way to implement this efficiently. Say you want to put something on special for the weekend, POS gives you a way to put it on and off sale easily. Before you had to go out and change the sticker on every item, instead of simply working off the item barcode and bin label.
Then there's another dimension - good old inventory management: What's my budget for inventory? What do I have in inventory? What's productive and what's not? Without POS you don't know what's moved and what hasn't. With POS you will know your exact dollar amount of inventory that hasn't moved over a given period. You can mark that down and get rid of it to free up that money to put into your A, B, and C sellers. Or if something is a D or X seller, you can decide if you need to keep it just because you are going to be the only guy in town who has it. And if you know that it is a D or X that you still want to stock it, you can then mark it up.
And inventory management then allows you to implement very simple pricing strategies. Cut your prices on your A items, because you are going to be price shopped on those. Run your regular items on your B and C items. These are convenience items that people are going to pick up. Then run your margins up on your D and X items, because these are items you are only going to stock if they are unique.
CT: Tell us more about the strategy around ranking items.
Bieszczat: This is a standard part of our Epicor Eagle POS system that automatically codes every item based on how it sells. And as I've mentioned you can then set your margins and have the POS automatically price and print out labels for everything. And if items move from one rank to another, then the margin will adjust as well. Really the computer suggests changes, and then you have to decide whether you want to make them. It will suggest stocking levels and pricing adjustments. It will identify missing inventory.
CT: So what you are getting is actionable intelligence on your business.
Bieszczat: That's right. If you order through the POS and then sell it through the POS, I can tell you almost exactly what went on in between.
CT: How about advanced users? What are they implementing once they've really gone to school on POS?
Bieszczat: One thing that builds on what we've been talking about is taking the inventory ranking reports to any number of more in-depth levels. But the top areas where advanced users today are putting in a lot of effort are strong loyalty and customer management programs. They are getting the customers on file, giving them some sort of ID number, and then tracking sales by customer. They are marketing directly to those customers using mail, email, gift cards, etc. They are encouraging repeat business and loyalty.
CT: What are the basics of a customer loyalty program?
Bieszczat: The possibilities that you have through the automation POS brings you customer loyalty beginning with just getting someone's email. You can collect an email by asking, or by offering the convenience of emailing a receipt for the customer's records. Then a week later you email them a loyalty card number and a coupon for their next visit. It's that simple. I am just so keen on the concept of emailing people money. It doesn't have to be much, but it's something that they have to spend at your store. Very few people who get a coupon for $1 or $5 won't come in and spend $12 or $15.
CT: And you have to consider the cost of getting that same customer in through other channels.
Bieszczat: That's right. And this way you know if they are redeeming the offer, and if they don't, it hardly costs you anything. Building loyalty and customer traffic by using the POS to create points of contact and points of satisfaction is exactly what the advanced people are doing. You see this every day in advanced retail, and independent retail can do this too without a lot of work.
CT: It's interesting that you mention big retail. The service levels they offer mean that customers expect a lot of basic things to be right in a retail setting. They aren't impressed simply because you have something in stock and on the shelf. They need more than that.
Bieszczat: Making your retail floor space productive is so important. Labor at retail is a fairly fungible item. It's out there and you don't pay that much for it. You can often even find someone who has already been trained by one of the big retailers. So if you build traffic, you can service it. You also have your pharmacy's prescriptions to help create traffic. So to me it's a no-brainer for anybody who's not an apothecary to get some people in who understand retail. Don't have the pharmacist focus on this. He's got other concerns. Make it someone's job to make the front end work for you.
CT: What do you think is coming down the road that will be significant for POS users? What will they want to focus on next?
Bieszczat: One thing that's really here and now, but not in use by as many people as it should be, is the pharmacy management system integration with POS. It is getting very sophisticated, and enough so that a pharmacist can obey the regulations - that is, get the right HIPAA signatures, the right safety cap signature, and all that stuff - by using a relatively low paid clerk. You can also make sure a whole set of business rules are followed, for example ensuring that all prescriptions that are ready are picked up, that family relationships are respected, etc. All this used to be done at the pharmacy counter, but now you can use a clerk and the integration between the POS and the pharmacy system to drive this. It saves the pharmacist a lot of time and provides the customer with a level of service that, frankly, they don't get at some of the chains. You want to get this integration, then let prescription pickup flow into shopping the front end, and let it all culminate at the POS. A good shopping experience lets you make yourself a destination and it helps you differentiate yourself on convenience. There's room for a pharmacy that offers a really positive customer experience in most communities.
CT: And what about for the future? What's coming next?
Bieszczat: Looking at the future, with the younger generation convenience is defined to a great extent by how they can interact with you on their phone. Not by giving you a call, of course, but through mobile search. So pharmacy retailers need to make sure that they stay visible in their local markets in a format that shows well on a phone and tablet. They don't have to run an e-store. That's an entirely different thing. But your location and what you stock needs to be published in the local Web shopping services.
CT: Let's wrap up by talking about how a pharmacy can make sure it is visible on mobile devices, and use POS to help.
Bieszczat: There are two ways, and they are pretty simple. One, make sure you have a website. And make sure that it is also optimized for mobile viewing. Next, take your inventory and make sure it is searchable on your site. Again, this is not running an e-store with fulfillment and payment issues. On our system, and I suspect others, you can publish your inventory to local shopping services such as Google. You can publish your inventory data to these sites on a regular basis through APIs that the services offer. Then when someone searches for a product on a mobile device, they will be able to find your pharmacy, and not because they were looking for it specifically. CT