Tech investments to make in 2016
If your bakery business could hire a valuable employee for $49 a month, would you not consider it to be a wise investment?
Niall Cooper, who owns BakeHouse with his wife, Lindsey Morse, investigated several options for point-of-sale systems prior to opening their retail/wholesale bakery two and a half years ago in Washington, D.C. They decided on ShopKeep POS for several reasons, such as analytical capabilities, customer support and ease of use.
“We found ShopKeep to be better with back-office information – charting inventory, which items are selling better, problems with transactions. It’s very user friendly,” Cooper says. “We also found their customer support to be their strongest service. I don’t expect anything to be perfect, but I do expect any issues to be dealt with promptly and effectively.”
With no upfront costs, neighborhood retailers like BakeHouse are finding new technology tools to be an attractive bonus for doing business in the 21st century. ShopKeep POS, for example, costs $49 a month per register and includes the iPad register and analytics software that enables small business owners to track real-time sales and in-depth inventory management 24 hours a day. Employees also use the system as a time clock, an important asset for keeping track of staffing and overtime.
David Herzog, director of business development at ShopKeep POS, points out the biggest risk for small business owners today is “staying in business.” ShopKeep helps small businesses drive revenue and profitability by giving owners the same analytical tools as the big retailers. Technology is often viewed by small business as a cost. On the contrary, Herzog says this technology is a sales-driving tool.
Case in point: ShopKeep, the cloud-based technology and business management solution for 20,000 independent merchants, recently pulled same-store sales data from 347 bakeries across the country during Small Business Saturday (Nov. 28, 2015) and found significant positive signs related to the health of the retail bakery business.
Bakeries saw a 7.28 percent increase in revenue on Small Business Saturday this year compared to last year, and shoppers were also spending more dollars per purchase this year, as bakeries that use ShopKeep saw a 1.7 percent increase in average dollars spent per transaction.
“Where the magic happens is using the analytics that ShopKeep provides,” Herzog says. “You can see top line revenue and how costs are affecting your bottom line at your fingertips. You can see what happens in retail time and make changes on the fly.”
There’s a well-known statistic that one in five US businesses fail in the first year, but with ShopKeep, Herzog says, that number falls to one in 20. “For us, it’s about helping small businesses compete in their local market. For them, information is power.”
Cooper of BakeHouse agrees. “The sales analytics enable me to look at trends,” he says. “It helps us know what items to back off on and helps us to minimize waste, and also identify quickly when something is becoming more popular. You don’t have to keep your eye on everything all the time because it is very easy to access all the details you need. It helps us make informed decisions.”
BakeHouse is the brainchild of Cooper and Morse. Their dream of opening a bakery began back in 2007 when they moved to the secluded island of South Georgia in the southern Atlantic Ocean to work in a small museum, catering to visiting Antarctic cruise ships. They were thousands of miles from anywhere selling anything and found themselves faced with the possibility of living without fresh baked goods. Unwilling to give up such luxuries, Lindsey took to the ovens and started developing the recipes that would evolve over time to become BakeHouse staples.
“We are best known for biscuits and English scones,” Cooper says. “Things are going very well.”
Beyond the impact of new technology on the health of small business, technology is changing the way customers interact with retail bakeries and coffee shops across the country.
According to the 2015 report, 43 percent of US consumers have previously used a mobile device (smartphone, tablet, or smartwatch) to make a purchase in a brick-and-mortar retail store, marking a 7 percent increase from last year who reported they had used mobile pay in Retale’s 2014 study.
Indicating similar growth, when asked if they would be interested in using a mobile device to pay for a gift or other item in a retail store during the holiday shopping season, 61 percent of shoppers polled this year said that they would, an increase from the previous year’s 56 percent.
“The embrace of mobile pay has been slightly slower than many originally anticipated,” says Pat Dermody, president of Retale. “But the growth that we’re seeing is undeniable, especially over the holidays, when consumers seek out the best tools to streamline and simplify their shopping. For many, mobile pay is a big advantage at checkout, and that’s building strong consumer support and propelling adoption upward.”
Dunkin' Donuts makes Apple Pay available as an additional way to reload their card via the Dunkin' Mobile App. With Apple Pay, Dunkin' Donuts guests can use their iPhone 6s, iPhone 6s Plus, iPhone 6 or iPhone 6 Plus to purchase, gift or reload virtual Dunkin' Donuts Cards through the Dunkin' Mobile App for quick, easy and secure payment for Dunkin' Donuts food, beverages and merchandise.
Security and privacy is at the core of Apple Pay, as when guests add a credit or debit card to Apple Pay the actual card numbers are not stored on the device nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on the user's device. Each transaction is authorized with a one-time unique dynamic security code.
“Apple Pay represents an important step in our ongoing commitment to leverage the best technologies to help busy, on-the-go people enjoy our full menu of coffees, donuts and sandwiches any time of day, more quickly and conveniently than ever," says Scott Hudler, vice president, Global Consumer Engagement at Dunkin' Brands. "With Apple Pay, we continue to differentiate our brand with a superior guest experience that includes offering a full array of options to reload your card within the Dunkin' Mobile App."
Starbucks’ mobile app features several useful features. It integrates the company’s loyalty program, which gives customers benefits such as a free drink for every 15 purchases, and allows users to manage their card balance directly from their mobile phones. Customers can also pay for their drinks by swiping a barcode found in the app at the register. Additionally, the Starbucks app includes a store locator, a food menu, and a drink builder feature.
In the first nine weeks following the launch of the app, Starbucks processed 3 million mobile payments. The number of mobile transactions soared to 26 million in the first year, and since 2011, some $2.4 billion has been loaded onto Starbucks cards via the mobile app.
Mobile payment programs are relatively inexpensive and don’t require sophisticated technical knowledge to implement. Here are five ways that offering your customers a mobile payment option will help you increase sales:
- Integrated loyalty and incentive programs: Instead of customers having to keep up with punch cards or key ring tags, all of their information is stored in the application each time they make a purchase with their mobile device. The easier it is for them to keep up with the loyalty program, the more incentivized they’ll be to follow it through until the end.
- Credit card payment option: Being a cash-only business often decreases sales because customers without enough cash on hand are unable to make large purchases.
- Ability to track customer trends and inventory: A common struggle for small businesses is tracking inventory and customer behavior. Small businesses using mobile payments can now track what product and services they are selling to understand customer demands, leading to increased product sales and improved customer service.
- Increased check-out speed: Customers like quick service, and most people find that it’s considerably quicker to pay with a mobile device than a credit card. They’ll then be more willing to return since they didn’t have to wait in line for a long time. You can also directly increase profits by accommodating more customers in the same period of time.
- Lower credit card fees: Some mobile payment companies charge less per transaction than credit card companies, which equates to direct savings for the company.