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Retail Technology, Retail technology News

Price changes: Is VAT the problem?

Friday November 19 2010

With retailers set for a busy Christmas and New Year, and the latest set of VAT raises looming, retailers need to find a way to simply and effectively manage in-store signage and labelling changes, especially as the government has seen that VAT changes are a way of increasing revenue without a great deal of resistance, says Derek Buchanan

With retailers set for a busy Christmas and New Year, and the latest set of VAT raises looming, retailers need to find a way to simply and effectively manage in-store signage and labelling changes, especially as the government has seen that VAT changes are a way of increasing revenue without a great deal of resistance, says Derek Buchanan

 

The run up to Christmas is a stressful time for retailers. Businesses need to be concentrating their efforts on providing great customer service so that profits are maximised, according to Derek Buchanan, chief executive of global information technology solutions and services company, Episys. However, he said that, due to the nature of the season, with increased trade, it’s very easy for staff to make mistakes when under pressure.

 

“Christmas is a peak trading time for retailers and they do not want to be left with unwanted reduced Christmas goods cluttering the shelves in January,” he explained. “Retailers must be able to act quickly to ensure that any price changes are introduced not only quickly, but accurately.

 

“At Christmas, time is tight for retailers and most businesses start their sales prior to the end of the Christmas rush. Some organisations like to introduce promotions, such as 20% reductions, but without an integrated signage system this can be incredibly complicated. Store staff will have to waste a lot of time working out price changes manually, and once the new price has been established, further time is taken up printing new labels and signs. Furthermore, this process will have to be repeated for any further Boxing Day reductions, the January sales, and then once again for the VAT rise on 4 January, presenting a never-ending headache for retailers.”

 

Labour intensive, time consuming

 

“Once price changes have been calculated, store management are then faced with the challenge of finding the labour resource for changing labels in store,” Buchanan continued. “This time-consuming job is likely to require the help of a number of staff, which means even more time lost where store associates are taken away from their duties of assisting customers.

 

“And this is only the beginning. Further problems will arise for retailers without an integrated signage system linked to the EPoS [electronic point of sale], as the challenge doesn’t end with price labels being changed. Customers may have been seduced by the retailer’s tempting offers, but with no link from the signage system to epos, it is not guaranteed that the reductions will be recognised at the till. This is likely to result in flustered sales associates and dissatisfied customers. Furthermore, once the promotion has ended and the price at the till has reverted, how can the retailer be sure that the corresponding promotional signage has been removed?

 

“But there is another way. If a retailer has an integrated signage system the situation can be dealt with very differently. By linking into the retailer’s pricing and promotion systems an automated batch of signage (that can reflect the stores actual range of products) can be electronically sent to the store. At the press of a button, store managers can print out the new labels, in ‘store walk’ order, so that the labels are in the correct order to be placed by the products. Simultaneously new prices are automatically updated to the epos, and managers can use the templates that are already set up to print out his promotional signage and posters, ensuring that the material is all in the corporate style, and that customers benefit from clear and consistent messaging. In addition, by making the process as efficient as possible, managers can maximise the time that associates spend on the shop floor, helping customers and driving up sales.”

 

Integrating sales with signage

 

“Smart retailers are already seeing the benefits of using integrated signage systems that enable them to effectively and efficiently manage their signage,” he added. “When the last VAT reduction came into force, Fortnum and Mason, the prestigious department store located in Piccadilly, London, were able to change every sign in less than 24 hours by keying the new rate into their signage system, which then automatically printed out all the new signs.

 

“For retailers worrying about having the resources to provide high-impact signage quickly and easily to accommodate the VAT change, without the investment of a costly IT infrastructure, a web-hosted signage system is the ideal solution to provide an immediate impact. All the retailer needs is a web browser and printer in-store to overcome the problem instantly and without any panic ahead of the peak period.

 

“With no guarantee that the VAT rate won’t change again in the near future, retailers need to accept that price changes look set to become business as usual, but the right signage solution will take the stress, cost and time out of making sure consumers always get the best possible messaging,” he concluded.