The Key to a POS Tracking System - Business Intelligence!

If you’re a wholesale distributor of beverages and an OnTrak application software user, I’m going to assume that by now you are either an expert or well on your way to becoming an expert in POS tracking.

This includes the accurate and efficient capturing your POS promotion orders from your sales reps in the trade, and approving, assigning and producing your orders once they have been accepted.

I’m also going to assume you’ve become quite adept at creating ad hoc reports requested by distribution sales management and your supplier’s sales managers.

Now, I’d like to take your expertise to the next level.

POS Business Intelligence — What Is It!

I’d like to offer you suggestions on increasing the value of your POS marketing campaigns by using the data stored in the OnTrak applications to create POS Business Intelligence

POS Business Intelligence can take the form of a report or a screen view that causes someone in your organization to take action to achieve a certain, hopefully beneficial, sales outcome. If you’re like most system’s users, much of the reporting and other information that comes from just about all application software is of the “good to know” variety. This isn’t meant to suggest that data that is used to provide confirmation of an event or fact, or produce invoices and other outputs, like picking tickets, purchase orders and shipping manifests, is without value. 

Rather, it is meant to suggest that systems like MenuTrak, PermaTrak and SignTrak, can be used to generate information that can help you increase your productivity (sales or ROI) and decrease the potential negative (out-of-stock items) of your POS initiatives.

Beverage distributors, especially those who both create their own temporary POS and buy permanent POS promotional materials, face a unique challenge — and likewise have a unique opportunity. A challenge and opportunity that their suppliers may not typically see with respect to POS promotional campaigns.

POS Promotions Work

As you know, POS promotions work. If your beverage distribution organization creates and places signage — or other forms of POS including menus, tap-pulls, lit or moving permanent signs, etc. — history suggests sales of the items being promoted will most likely increase. And, if your POS informs shoppers of a sale price, increased sales are a virtual certainty.

Most beverage distributors manage thousands of SKU’s these days; and they also must constantly manage multiple POS promotions. Even though distributor route accounting systems (RAS) usually have some form of inventory management application, retailer stock-outs can occur and are more likely when items are promoted at-retail, using POS signage.

Due to the effectiveness of most POS materials, when items are promoted at-retail there is a chance to make extra profits or a chance to lose potential sales.  The question is: What can you do to facilitate the former and eliminate the latter?

Tracking and Managing the Impact of POS Promotions

The answer to that question requires that you have a system in place that allows you to track, measure and manage your POS activities. POS promotions typically create special selling situations and the potential for out-of-stock situations. These stock-outs, or lost sales, can be mitigated by correlating historical POS promotional data available in OnTrak applications, with the sales data collected and stored in most route accounting systems’ data bases.

Distributors are uniquely positioned to know where, at individual customers, the POS materials have been placed, and by reviewing historical data will also know the likely impact of a certain type or style of POS and the impact of the message conveyed. Using the data from the POS management system correlated with sales data from the RAS system to forecast “demand during a promotional period,” stock-outs can be substantially reduced or eliminated, thus improving the quality of future promotion period forecasts.

One OnTrak customer determined that there was a measurable improvement in sales when they shifted their POS promotional approach from “several small” to “fewer large” signs. Now, when they plan for a POS campaign, they know “bigger is better and less is more” in terms of the impact on sales.

They use key OnTrak data elements correlated with data from their RAS to determine the required product order quantity, for each customer where there will be a POS promotion, based on historical information. In other words, they use OnTrak POS data correlated with sales data collected during the promotional period from their RAS system to create Business Intelligence. In their case, the actionable information has substantially reduced the number of stock-out’s their retail customers experience.

Naturally, the reduction of stock-outs increases both the retailer’s and the distributor’s sales and profits; and sales forecasting accuracy is improved for subsequent POS promotions. Of course the increased sales will be noticed by the distributor’s suppliers. Beyond the obvious benefits to all members in the supply chain, additional benefits accrue to distributors. Since suppliers are often co-opting promotions, or paying some or all of the distributor’s costs, the reporting capabilities provided by the OnTrak POS management system can assure them that they are receiving full value for their promotional spending.

By now, it should be clear that the “secret sauce” that will improve the productivity of your POS initiatives is the data that is used to create actionable information — reports using the distributor’s RAS sales data correlated with POS promotional data stored in every OnTrak application. Because distributors using virtually any RAS system and at least one OnTrak application can better forecast sales increases attributable to POS campaigns, out-of-stocks can be virtually eliminated and the most effective POS campaigns can be employed repeatedly and adjustments can be made as needed.

Improving Relationships with Retailers and Suppliers

Using OnTrak’s applications can increase the retailer’s confidence in the distributor’s sales forecast making it more likely that the distributor can increase the retailer’s order quantities to avoid stock-outs. Suppliers, too, will have increased confidence in the effectiveness of their distributor’s POS initiatives making it considerably easier to pay the distributor’s POS cost recovery claims.

Summary

Using a combination of distributors’ RAS sales data, correlated with their POS promotions data to create POS Business Intelligence — in the form of suggested retailer item order quantities — can help reduce stock-outs during promotional periods thus increasing both revenues and profits. Also, such actionable information can take much of the guesswork out of POS campaign planning.

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