I sat down with Scott Smith, the Director of Operations at SIA member company Management One, to get his take on the new credit card processing requirements and inventory shop management.
EMV Liability Shift
On October 1, the impending EMV liability shift went into effect across the national retail community. In short, the newly imposed payment technology standards put full financial responsibility on all retailers. The snow sports retailers, big and small, that have not yet made the changes to their payment software now risk having to pay fat settlements in the event of a security breach.
Tom: Are these retailers taking too much of a risk?
Scott Smith: YES! Having had significant experience working with clients in Canada and Australia, we have really had the approach that you can never be too careful with your valued customer’s financial information. We have not seen significant penalties arise up to this point for small to media size retailers in some of the countries we have dealt with, but in any case of a security breach, the collateral damage for a retailer and their brand can be significant.
TD: If a retailer has not yet upgraded their system, how quickly can they adhere to the new standards?
SS: There are some pretty simple checks that you can put in place to comply with PCI/EMV requirements.
- You want to look to your POS provider and payment processor to see if they have certified a PCI/EMV solution together. This is relevant if you are using an integrated payment solution between your payment processor and your POS company.
- If your POS system is not integrated with your payment processor terminal and you are simply using what we term a “Stand Alone” payment terminal, you just need to make sure you are NOT under any circumstance holding any of your customer payment card details on any of your computer systems. It may sound pretty fundamental, but it can happen even when taking orders over the phone. If your terminals don’t have EMV capability then just call your provider and have them switched over.
Although the Stand Alone terminals do represent more work for you as the retailer and an extra receipt for the customer, if your POS provider and Payment Processor have not met the deadlines for a solution it really may be worth considering taking that safe step back while they get their houses in order.
Inventory Management Guidelines
As the 15/16 seasons gets underway its critical for the retailers to prepare in advance. Inventory management is essential to the snow sports retailer. Having the right product on your floor not only means better cash flow but happier customers.
TD: What are some steps that a business can take to successfully manage their inventory?
SS: There are many factors to consider when developing a strong merchandise plan; from your product vision and target audience to your staff’s passion and commitment to that product … BUT the most important step to successfully managing your inventory is to build a workflow in your business that allows you to accurately measure how your customers vote!
If you have not invested time into developing a logical and accurate department structure in your POS system, if you are not confident of the numbers you are showing in your POS system, you are on a very slippery slope. The key to managing your inventory is being able to accurately measure what your business is doing. In this day and age you would not take your car to a mechanic that just throws new parts in hoping your beloved vehicle will take a turn for the better. A great mechanic uses sophisticated tools to measure your vehicles performance, diagnose issues and deliver solutions… It is exactly the same with your inventory! Throwing new products, different styles or new colours at your customers without an inventory plan, can have devastating effect on your cashflow and bottom line.
TD: How crucial is forecasting? Is there a particular method one can implement?
SS: Without an accurate forecast for your inventory you will NOT sustain consistent cashflow. If we don’t know where we are going, how are we suppose to get there! A very wise man once explained to me that the business we are in (Snow Sports retailer) is exactly like the mountains we love … full of peaks and valleys. If we don’t build an accurate forecast to stay the course we will be trapped on an uncontrolled run like a first time Snowboarder on the Sudan Couloir in Whistler.
There is hope… Merchandise Planning is a science that takes your valuable point of sale data along with trending information and delivers a forecast for your inventory. One of the common mistakes we see in the ski industry is the reliance on last years sales as our main indicator of what to buy this year. Accurate merchandise planning takes much more into consideration than just the previous year. Correct merchandise planning breaks out different factors that will affect how much you need to buy and most importantly when you need to land it in your store. A strong plan will l put the right product in your stores at the right time and drive cash into your business. Management One provides merchandise plans with industry leading consultants that will help you implement and maintain a forecast that will produce results.
Accurate Forecast = the right products for your customers at the right time = $$$
TD: What capacity will you be attending this year’s Snow Show?
SS: Attending SIA is always a high point of my year! Having been associated with the Snow Sports industry for almost 30 years I love everything about the show. I will have the great pleasure of introducing two of the best speakers in the retailer world to the SIA community during the Industry + Intelligence sessions on January 27 2016. Both Dan Jablons and Dan Holman will be speaking on the subject of what we term [email protected] How to truly drive your business forward with positive cashflow. I will also be available throughout the entire show to answer questions, help members with any issues relating to my experience and their business’s or just talk about the industry that is close to my heart!
About Scott Smith: Director of Operations for Management One specializing in independent business success by showing any company how to get a better return on their investment in inventory and people. Scott has an extensive range of experience in the Snow Sports Industry having worked with retailers in the industry for over 25 years at the store level, as a POS technology supplier and inventory planning specialist.