An Apple A Day Is Profitable
Point of sale VAR Ensign Systems, Inc. takes advantage of Apple Computer's resurgence in the marketplace by selling iMacs to specialty retailers.
Alan Thurgood lives a colorful life as a point of sale (POS) VAR. Thurgood, president of Ensign Systems, Inc. (Layton, UT) is reveling in the rebirth of Apple Computer, thanks to the company's new iMac computers. "Sales are skyrocketing," says Thurgood, who incorporates the G3 and G4 iMacs into POS systems for specialty retailers. "If you would have told me five years ago that a colored, see-through computer would be popular, I would have said no way."
Today, sales for the privately held Ensign Systems are up 20% over 1998 sales. Sales for the year 2000 are expected to be up at least 25%, thanks, in part, to the iMac. "About 50% of our business comes from the iMac and 50% from conventional PC-based POS systems," notes Thurgood, who has both an iMac and a PC on his desktop. In addition to reselling POS hardware, Ensign Systems markets its own software under the name POS-IM for both Windows and Macintosh platforms.
Tracking Jeans Leads To Company's Formation
Ensign Systems has its roots in pants. Jerry Sargent, a Levi Strauss & Co. employee, founded Ensign Systems in 1986. Sargent took three years to develop a computerized inventory management system, which he later sold to the Levi Company. Thurgood served as a CPA and consultant for Sargent.
Since 1989, when Thurgood became president of Ensign Systems, his goal has been to introduce the Apple Macintosh computer to the point of sale market. Why? Quite simply, Thurgood thinks there is a large, untapped market for Macs. He says faithful Mac users are almost religious about their dedication to the product. "Mac users, many of whom used Macs in school, are working in retail," says Thurgood. "Training is less of an issue. The Mac is also a good choice for people who are not computer literate, because of its graphical user interface." Thurgood also points out that, while the colored iMac is eye-catching, it has some valuable features for VARs. "It's built-in modem is network compatible, making the iMac very plug and play. There are no drivers to load, and you don't need a Windows NT specialist on staff." The built-in USB (universal serial bus) interface means the iMac works with USB-compatible POS peripherals, such as scanners and cash drawers.
iMac A Good Fit For The Music Market
Ensign Systems specializes in specialty retail markets, including sheet music stores, wineries, hardware stores, and outdoor stores, such as bike shops. "It's common for creative people to be drawn to the look of the iMac," says Thurgood. "We also sell retailers on the product's functionality." In the outdoor market, for example, Thurgood sells iMac-based POS systems to bike shops and stores that sell hiking and outdoor equipment. Owners of sheet music stores and stores that rent/sell musical instruments also find the iMac's colors - red, orange, yellow, purple, and green – appealing. "With specialty retailers, POS software for inventory control is key," says Thurgood. "The sheet music market, as an industry, admits it's 10 years behind when it comes to point of sale. Bar coding and inventory control are crucial to this market." A quick search on the Web site for the National Association of Music Merchants (www.namm.com) attests to that fact. Music retailers can obtain bar coding kits to help them get started in inventory management.
Thurgood cites one customer, Bonnie's Music in Las Vegas, as an example of how the iMac helped him close a sale. "Bonnie's Music is well-known for sheet music. Bonnie had very little computer experience, but she had seen our products at a trade show," explains Thurgood. "She eventually bought a POS system, incorporating the iMac to manage more than 250,000 music titles. Retailers like Bonnie often have cash registers that track their sales. The problem is, they don't know which titles are selling. With a computerized POS system, they can track sales and set automatic reorder points for popular titles. This also helps the retailers' marketing and customer service efforts. They can send postcards and newsletters to their customers according to their musical preferences."
Capitalizing On The Internet And Handheld Devices
While Thurgood credits the iMac for part of his company's success, he's quick to point out other reasons Ensign Systems is growing. "We understand the needs of the specialty retail market," says Thurgood. He's also open to adopting new technologies to expand his POS applications.
"A small mom-and-pop store, for example, may not need POS software in order to handle layaways. Those customers need a basic POS system to complete sales transactions and manage inventory," he says. "Sometimes VARs add complexity to a POS system. One of the biggest complaints I hear from retailers is that a system was easy to use in the beginning. Then, it became complicated because of upgrades and customization." When it comes to new technology, Thurgood is excited about how the Internet and handheld devices will impact his customers. "A bike shop can sell its products anywhere in the country, thanks to the Internet," says Thurgood. "Small, independent retailers can basically open another store, without building one, by selling online." To facilitate this process, Ensign Systems recently released a software interface for e-commerce, currently being used by LDHarvest.com.
A virtual storefront has its downside, notes Thurgood. "We recently helped one retailer with an online solution. The store owner wanted to offer online ordering to remain competitive. Customers would come into the store to learn about specific products (e.g., hiking gear). Then, they'd go home and buy items from competitors using the Internet, in part, because it is so easy." Thurgood adds that smaller specialty retailers can capitalize on customer service for their in-store customers, by showing them how to choose the right backpack, for example.
Handheld devices are a boon to retailers, according to Thurgood. "Wireless handheld devices are being used by music stores, for example, to ring up sales as customers walk through the store. When a customer buys a guitar, the salesperson suggests purchasing strings and picks, ringing up the items on the handheld computer. That information is then downloaded in the store's POS system." Again, he notes that the technology helps the retailer concentrate on customer service, giving shoppers a more personalized experience.
Thurgood expects business to increase with the growing popularity of the iMac and the adoption of new technology. All in all, Ensign Systems' future is bright, as well as colorful.
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