Business and Operations
Making a Pitch for POS
By Tuija Seipell
By Tuija Seipell
Computerization pays off for Vancouver bakery La Baguette & L’Echalote.
The romantic idea of operating a bakery and selling fresh baked goods to a happy and loyal customer base is still possible today. But being an elbow-deep-in-dough baker and running an effective and successful business in today’s tough market are two ingredients that don’t always mix well.
Computers can be an enormous help in achieving better results, even at a bakery, says Marc Tilkin, general manager of La Baguette & L’Echalote on Vancouver’s Granville Island. Tilkin is a second-generation pastry chef from Belgium. He also represents three software firms that offer services to the foodservice and bakery industries, including the XPOS software by Yakuma that La Baguette now uses.
Computerization has benefited the bakery in many areas – from decreased staff turnover and improved customer service to literally collecting more cash each day. Perhaps the most startling “bonus” change at La Baguette has been that because correct prices are now charged each time, the store collects $600 more per week selling exactly the same products in the same quantities to the same customers. “This is literally ‘found money’ that we did not collect before because of errors,” says Tilkin. This improvement alone has paid for the price of the system.
Tilkin spoke at an international industry panel organized in Vancouver during the visit of the Scottish Association of Master Bakers in October 2005. Tilkin talked about how POS technology can help a small bakery, and although his views might be considered biased because of his involvement with the technology suppliers, the results computerization has brought to La Baguette are impressive. La Baguette was featured in the August/September 2004 issue of Bakers Journal.
In an interview at La Baguette in December 2005, Tilkin elaborated on the process and benefits of switching the bakery to a computerised POS system nearly three years ago.
“My own experience is that the POS-system really made life easier for the staff and myself by freeing up more time because all of the data is at our fingertips, and it gives me more control to manage and help my staff.”
POS systems for retail stores, restaurants and even coffee shops have existed in some form for about two decades, but POS has come late to the smaller retail bakery, possibly because the retail bakery has a mix of retail, production and restaurant-type needs and few suppliers have seen it as a profitable niche.
The early POS systems were not much more than “smart” cash registers with simple product and price-related functions.
Today’s systems are full-blown management tools and that’s where their value is, says Tilkin. At La Baguette, Tilkin originally purchased two POS units or “cash registers” and the management system, including software, hardware, licence and training, for about $16,000. He has since added a third POS unit and additional software for about $5,500.
What intrigued Tilkin about the XPOS system was that it was specifically developed for bakery stores so the functions are designed with a bakery’s needs in mind. The other reason for choosing XPOS was its touch-screen operation with pictures of each item. This makes it easy for staff to identify the correct product, even if they do not remember the name and even if they do not have previous keyboarding skills.
Granville Island is a high-volume location with tourists and locals shopping for fresh food at the Public Market, and for arts, crafts and gifts in the many shops.
“People love to work on Granville Island,” says Tilkin, “because this is a fun place. But when you work here and serve 200 customers in a rush, it’s not fun any more. On top of that, you have to learn all of the products, the prices, the ingredients, the allergy issues, whether there’s tax or not. So anything we can do to make the staff’s job easier is going to help.”
La Baguette sells a large variety of products and learning all of the information was a huge task for new staff members. Of course, the detailed information about each product does not just magically show up in the system. The garbage-in-garbage-out theory works perfectly with computers so that the information the staff can access is only as good as the information that was originally entered into the computer. Tilkin created a detailed information page for each product with a picture, the ingredients, the shelf life, allergy issues and so on. He also added a suggestion-selling aid by including what each product “goes well with.”
Since installing the system, La Baguette’s staff turnover has been cut by 75 per cent and Tilkin says that the staff is also generally happier. When they have the information at the till without having to stress about the details, they can focus on serving the customer and interacting with them more fully. This, and the additional information that the staff is now able to pass on to the customers, has also increased customer satisfaction levels. The system tracks the La Baguette Club members’ purchases and personal information so that they can receive personalized service, birthday cards and e-mail newsletters. Their name is also printed on each receipt.
Now that the prices are correct and the GST information is automatically applied, La Baguette collects an average of $60 of GST on a weekday. This used to be $25-$30 before.
“For a manager, it is important that the prices charged and taxes collected are accurate,” says Tilkin.
Bakeries make a buck a penny at a time and even a small increase in average transaction can mean a lot for the bottom line. La Baguette’s results in that regard have been amazing. Within two years of installing the system, the average transaction went up from $4.80 to $6.90 and is now over $7.
La Baguette has just over 20 full- and part-time staff members. Staff management and justifying salary levels and bonuses has become much easier as well.
“With the system, I found out who is selling the best, whose average transaction is highest, who sells more per hour,” says Tilkin. “It is all there in front of our eyes, so you don’t need to have any arguments about it. If you bring your average transaction up, I’ll pay you more! I show everyone the weekly numbers so there are no secrets as to who is selling well and who is not.”
In addition to the front-end benefits, the system has also helped Tilkin track ingredient purchases and other production costs. Historical sales, staffing and cost data also helps with daily, weekly and seasonal planning to ensure that purchases and staffing levels are correct and resources are used effectively.
A bakery owner or manger who can focus on actually managing the business should be the long-term end result of computerisation. Tilkin summarises his view: “I think that unless you are so small that you are actually selling at the front counter yourself, you would benefit from computerization. It brings all the facts to your finger tips and decision-making becomes much easier in all areas of the business.”