Point-of-sale: promotion automation

    In this article I want to share the classification of promotion schemes that are automatically processed by POS systems, built on the experience of developing such schemes for many clients over the course of many years. I hope it will be useful both to developers who implement the POS modules themselves and their interfaces, and to users of such systems.


    Important concepts



    Special price


    By special price we will mean the so-called quotation, which can be set both in absolute and in relative terms.

    The quotation is determined by the type of quotation and, in fact, by the quotation, that is, the absolute or relative value attached to the product or product group (in this case, if there is no quotation for the product belonging to the group, then the one that is attached to the group is used).

    Relative quotation value means one of the following options:
    1. The margin given as a percentage of the accounting price of receipt.
    2. Markup (negative - discount), set as a percentage of the accounting (base) selling price.
    3. Extra charge (negative - discount) specified as a percentage of the difference between the recorded selling price and the recorded receipt price (mark-up discount).
    4. Extra charge (negative - discount) specified as a percentage of the quote value, which has a special reserved look.


    In relation to the issue of promotions under consideration, the type of quotation can be interpreted as a dedicated price channel for a certain set of shares. In this case, it is permissible to limit the applicability of the type of quotation by:
    • calendar period
    • days of the week
    • time of day

    In addition to the above, the quote itself may be limited by the calendar period of validity.

    Product combination


    To correctly identify many promotions, you must specify a combination of products for which, if it appears on the sales receipt, a promotional action should be applied. Such a combination consists of a list, each element of which is a product, compared with the quantity. Instead of a product, either a product group or a so-called generalized product grouping an arbitrary set of ordinary goods can be indicated in a list item. In addition, the list item may contain additional attributes (say, the sign “only identical items”, meaning that the quantity compared with the generalized goods is taken into account only if the check contains a given number of identical goods from the generalization).

    Classification of discount and promotional schemes



    Manual discount


    The discount is provided directly by the cashier at his own discretion, usually in percentage terms. Such a discount can be provided either on a separate line of the check, or on the entire check at once.

    This option is not often used because it gives the cashier too much authority.
    Of course, the system must have a regulation of access rights to such a function.

    Special prices provided without a customer presenting a discount card


    For a number of products, special prices can be determined that are tied to one or more conditions and are offered to all customers who do not present a discount card. Typically, the conditions for applying such prices are the date and time of sale.

    Simple discount cards


    The most simple and popular mechanism of discount sales promotion. The cardholder receives a percentage discount on any check.
    The following additional features are possible here:
    • The amount of the discount may vary between cards.
    • The company may periodically change the percentage of discounts on cards depending on the turnover for any period. In this case, it is desirable that the cards are differentiated by series, so that it is possible to separately control the gradation of the discount depending on the speed and separately change the percentage of discount on the series.

      Exotic case: transferring cards to another series if the revolutions on it reach a given value.
    • For some products, the limit of the discount may be set, or the possibility of lowering the price of a discount card is simply blocked.


    Discount cards with a discount depending on the total amount of the check


    Such a scheme does not fix the percentage of discount on the card, but dynamically determines it based on the amount of the sales receipt. To do this, a table should be associated with a series of cards, linking the range of the amount of the check with the percentage of the discount.
    If the cards in the system do not differentiate by series, then such a table will be applied to all cards.

    Special price discount cards


    A very flexible mechanism that allows you to fine-tune discounts for different products and product groups. I considered the features of special prices above.

    Sophisticated Marketing Promotions


    Here I will list promotions using product combinations defined at the beginning of the article.
    • In response to the purchase of a given combination of goods, the buyer is given a free commodity item.
      For example, for the purchase of 6 bottles of beer, the buyer receives a branded mug of the manufacturer.
    • In response to the purchase of a given combination of goods, the buyer receives a special price on them.
      An example is the action sometimes practiced under the slogan “Together is cheaper”: say, buying both shampoo and conditioner for the hair of one brand leads to the fact that the price of both positions is reduced by 15%.
    • When buying a certain set of goods, the cheapest position from this set is sold at a significant discount.
      Special case: the cheapest position is given for free.
    • When buying one of the goods in an amount exceeding the specified value, the price for one (and only one) of the pieces is set at a significant discount.

    Additional options for complex stocks:
    • The minimum sale amount of a combination of goods at which the promotion is triggered.
      With this restriction, the number of gifts given is a multiple of the total limit (in the absence of this restriction, the number of gifts is usually equal to the number of product combinations found on the check, the exception is described below).
    • Limit the number of promotions per check. In most cases, the promotion assumes that the number of gifts given out is equal to the number of times that the promotion combination occurred on the check. However, sometimes enterprise marketers limit the number of gifts to a given value (for example, if the gift is expensive). In fact, this is a half measure: it is difficult to prevent the buyer from going through the cash desk again with the second gift combination and again receiving the gift.
    • Overlapping combination of goods. Such a promotion may be combined with any other.
      A difficult, from the point of view of development, case of applying a promotion. In general, for the correct accounting of the gifts (discounts) given for a given combination of goods, it is necessary to mark the corresponding check lines with a sign that a gift has already been provided for them. Overlapping combinations require special measures to circumvent this rule.
    • Information message for the cashier about the amount by which it is necessary to purchase goods in order for the action to work.
      A requirement for certain shares (mainly a limited amount) in order for the cashier to “provoke” the buyer for additional purchases in order to receive an incentive gift (price).
      This option is used only in stores with low intensity of service: otherwise, the queue will not make it possible to spend additional time on increasing the customer’s basket.


    Resolving conflicts between complex promotions

    When automatically processing a check to identify the applicability of a particular stock related to a combination of goods, the problem often arises of the possibility of simultaneous operation of two or more stocks.
    Most often, such conflicts are resolved in favor of the maximum benefit for the buyer (the maximum number of issued gifts or the maximum value of the gift).

    Corporate loan


    Corporate credit cards are used by mass service networks (shops, HoReCa companies, beauty salons, etc.), whose clientele is largely constant. Actually, this is not so much a tool to stimulate sales as a way to tie customers to yourself and simplify the collection of payments for goods and services.
    Technically, corporate cards also include club cards, on which a client, once having paid a certain amount, can receive arbitrary services from the set of those provided by the enterprise and within the limits of the amount paid (with an optional overdraft).

    The essence of a corporate loan is that customers are given identification cards, on which the issuer can credit funds either upon payment of cash by the client, or as a bonus, or with the expectation of subsequent compensation for the amount of goods and services provided (for example, when calculating salaries or by trust).

    Corporate credit card can simultaneously perform all the functions of a discount card.

    A special case of a corporate loan is a popular gift certificate, the owners of which can buy goods or services in the amount of the face value of the certificate with a possible surcharge in cash if the purchase exceeds the face value.
    A positive factor in the automation of accounting for such certificates is the ability of the owner to make several purchases for one certificate, since the amount spent the previous time will be taken into account. If it is not possible to keep the chronology of purchases by certificate, the buyer will have to choose products at a minimum for the nominal amount.

    Bonus Programs


    When buying with a bonus card, the purchase amount is transferred to a centralized server, which periodically charges a certain percentage of the bonus that the buyer can use for subsequent purchases on the total amount of purchases for a given period.

    Special cases:
    • The amount of recorded purchases may be limited to a given set of goods.
    • The bonus can only be used to pay for a given set of goods from a check.
    • The use of the bonus may be limited to a certain fraction of the amount of the check.
    • The POS system may allow the customer to refuse to use the accumulated bonus.
      This option is unlikely to be often requested, however, such requirements are met by enterprises.
    • A bonus card can have all the properties of a discount card described above at the same time.


    The functionality of bonus cards is similar to credit cards with an additional feature: in addition to direct debiting and crediting to a card, they require operations of fixing accounting amounts (checks, documents) and automatic charging according to a rule that depends on the size of accounting amounts.

    Important common features of bonus and credit cards


    A fundamentally important common feature of both bonus and credit cards is that they are a substitute for money. This makes significant demands on the reliability of data storage on these cards and the regulation of access rights. In addition, since such cards are most often used by enterprises with a network structure, information on transactions and card balances should be processed centrally with instant access from any point of sale. That is, the periodic synchronization of data between points of sale, as a rule, does not suit the management of the enterprise due to the likely double use of the same amount from the card.

    We use Universe-HTT services for centralized processing of bonus and credit cards.

    Features of fiscal accounting of payment for purchases by credit and bonus cards


    When offsetting payment by check of the amount debited from a bonus or credit card, this amount should not be taken into account as a fiscal one. That is, it should not fall into the fiscal memory of the cash register.
    In the case of the bonus, everything is more or less clear: this is just a discount. With a credit card, a little clarification is required: the amount credited for the purchase from a credit card has already been paid (upon prepayment) or will be paid, upon subsequent charge of money to the card, as a fiscal one. That is, making a payment on such a card in the form of a fiscal one will unlawfully increase the tax base of the seller.

    Conclusion



    The above classification of promotions was compiled as a result of summarizing the experience with the Papyrus system of Petroglyph.
    Papyrus, having its own POS-module, at the same time can work with many popular front-end solutions, such as: Frontol, Set Retail, Barcode-miniPos and others.
    In this regard, it should be added that when working in a heterogeneous architecture (autonomous front-end system + back-end solution), significant difficulties arise with the implementation of many of the above methods of sales promotion.
    Firstly, due to the fact that vendors of POS-systems provide a much more limited set of tools than those listed, and secondly, because of the complex interfaces for interacting with even mechanisms existing in such systems.

    If someone is familiar with other schemes of promotions, I will be grateful for their brief description in the comments.

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