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Microsoft Business Solutions Retail Management System (RMS) adds up at the bottom line for health food shops across the USA and Australia

Case Study: Health food - Lassen’s two registers use Retail Management System Store Operations to manage 15,000 SKUs in his 4,200 square-foot store

“We used to spend two employee days every week just purchasing from our main distributor. … We've slashed that to half a day.” Jim Lassen, Owner Lassen's Health Foods #5

Customer Profile

Business Situation

Solution

Benefits

Lassen’s Store #5 was experiencing problems related to a lack of automation for their store operations. It took two employees two days per week to purchase from the main distributor. Purchasing involved first checking the distributor’s inventory, then placing the orders. Lassen spent a lot of time helping employees locate product items in the store. There were occasional pricing errors. Sometimes they accidentally sold items at wholesale, robbing the store of profits. Even customers mentioned it occasionally.

Lassen’s two registers use Retail Management System Store Operations to manage 15,000 SKUs in his 4,200 square-foot store. Inventory tracking needs include mix/match, lot matrix, parent/child, weighed and bulk items, and products they package. "Store Operations continuously flexes to our needs," says Lassen. "This is no canned product."

Common but daunting supply-line challenges have surrendered to Microsoft Retail Management Store Operations. Lassen's can buy identical items from competing suppliers, while other products come from only one manufacturer.

CPA Lassen enumerates the benefits that the new system provides.

Labor Savings

• Purchasing Time Cut by 50 Percent: "We used to spend two employee days every week just purchasing from our main distributor, first, checking their inventory, then placing orders. We've slashed that to half a day," Lassen says. Purchasing from large vitamin suppliers once took three hours each; now staff purchases from three or four suppliers in one hour.
• Labor Costs Cut by 20 Percent through Attrition: "We cut staff expenses by 20 percent," Lassen says, "but not by layoffs. We just didn't have to replace attrition." In a world of fixed and rising expenses, I focus on costs I can change, and labor is a great place to start. Shorter time-in-task saves money on Worker's Compensation, unemployment insurance, payroll taxes, and salaries."
• Item Pricing Time Cut by More than 50 Percent: "We've also cut the hours for item pricing by over 50 percent with Microsoft Retail Management Store Operations' Shelf Labels feature," Lassen says. He uses its Label Wizard to customize shelf labels with price, product description, bar code, and Lassen's logo. Store Operations' Assistant Wizard expedites changes in quantity, price, and bin location.

Expense Reductions

• Costs Cut on Nearly Every Budget Line Item: "Except for rent, utilities, and obviously recurring costs, Store Operations cuts my cost on nearly every line item," Lassen says. "It watches our tricky inventory levels and product costs and helps us do smart pricing. Each dollar saved drops to my bottom line or becomes discretionary revenue for profit, promotion, or store improvements."

Increased Process Efficiencies

• Large-Store Throughput: "Large-store automation makes customers expect it in small stores. The fast checkouts with Store Operations help me raise customer throughput without buying new registers and people to run them. And there's less quibble about prices," Lassen says.
• Improved Reporting Promotes Targeted Buying and Wiser Buying Decisions: Unlike many retailers, Lassen’s store advertises and discounts the hot items, so management needs tight tracking of fast and slow-selling items. "If it's selling well at my store, it's selling well at our competitors. Why not attract some of their public by offering it at a deal?" Lassen asks. "We got a large buy-in on coral calcium, a fast mover. We had a good margin and knew an ad would sell. It did—and it brought in new faces."
• Cashier Training Time Reduced to 30 Minutes: "This program is very fast to learn and teach," Lassen reports. "In 30 minutes, new cashiers learn to handle complex transactions with credit cards, coupons, food stamps, and senior citizens' discounts. That frees up senior staff and my time for customers."
• Increased Self-Reliance of Employees: "New and part-time staff used to waste my time asking directions to products. Now the Store Operations Bin Location lets even new clerks take customers to new items," Lassen says.
• Time Savings and Peace of Mind for the Owner: Lassen’s uses vendors' electronic catalogs, opens them in Microsoft Excel, then adds their chosen percentages to items and lines. They upload the data into Store Operations' SQL Server database for instant, storewide changes. "Our Microsoft Business Solutions Partner, POS For Less, set up my Compaq iPAQ 3975 so I can walk around the store changing prices and quantities," Lassen says. The handheld fits into a wireless Symbol Technologies sled that interconnects via Windows Terminal Services Client. Before this, employees had to go find a product and take it to a management register to make such changes. Lassen also uses XP's Remote Desktop to log in from home, generate reports, make database changes, and check sales, inventory levels, and staff presence. Lassen says, "I have more peace of mind and can actually take a day off!"

Improved Accuracy

• Improved Pricing Accuracy: "Any manual system is prone to pricing errors," Lassen says. "Sometimes we accidentally sold items at wholesale. Even customers mentioned it! With Store Operations, we set a price that's correct and ubiquitous for every sale. It only sells for less when we discount it."
• Reduction of Over-Buying and Double Shipments: "When we ordered from distributors' bar code machines, we never knew our total price until we got the order," Lassen says. "Then we'd see we had over-bought, maybe entered a wrong quantity. Or we'd get a double shipment if the readers weren't cleared after our last order. Store Operations lets us eliminate what suppliers told us was a 'time-saver.' They were boosting their revenues at our expense."
• Reduction of Cashier Error: Lassen's does three "line-drives" a month, offering 25-30 percent discounts on lines that offer the store price breaks or ad support. Scanner-based pricing and Store Operations' versatile discounting options reduce cashier errors during price changes because discounts are automatic. "If a clerk overlooks a discount, customers get suspicious," says Lassen. "That possibility is now gone."
• Accurate Knowledge of Inventory Helps Plug Money Leaks: "A few suppliers' reps used to send us things we couldn't sell, maybe a two-month supply when we needed two weeks or items too close to expiration. Sometimes staff over-bought because we didn't know what we had. Now it's purchasing by the numbers around here. Store Operations gives us our stock on hand. It knows our desired levels. We buy the difference. That's it."

Other Benefits

• Less Reliance on Employee Head-Knowledge: "When experienced employees quit or just take vacations, their knowledge still resides in the Store Operations database, not in their heads., so we can easily keep up with purchasing and everything else.
• Increased Advertising Commitments: Store Operations lets Lassen’s monitor product flow in standard and unusual ways, including tracking manufacturers' co-op ad dollars as a percentage of sales. "Last week I got a nice commitment for monthly ad dollars from a factory rep. I showed her a Store Operations report proving that—even though I buy her product from multiple distributors—we order tons of it each month."
• Technical Support Keeps Things Running Smoothly: Lassen praises Microsoft Business Solutions tech support for help in time of crisis. "When I got a virus, Microsoft Business Solutions and Bill Holabird at POS for Less helped me restore things. They even helped me write some 'select statements' I needed."
• Provides the Potential for Targeted Customer Mailings: Lassen has plans to use his customer database to log check-clearing problems. With a history of customer names in Store Operations, Lassen's has been able to plan for targeted customer mailings.
• Automation Improves Profitability: "I come from a strong retail family," Lassen says, "but I'm the first to take automation this far. I think my accounting background made me seek a product that covered all the details with very little effort. But those savings really add up at the bottom line."

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