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7 Ways To Streamline your Retail Business Operations
According to the Statistic Brain Research Institute, only 47% of businesses which operate in the retail industry can sustain themselves in the first four years. The retail sector contributes significantly to the day-to-day operations of the ordinary people. Enhancing the operational quality of your retail business is imperative to not only save costs but in staying ahead of your competitors too.
For example, you can save on your labour costs by switching to a sewing machine or outsourcing manufacturing. Similarly, a business selling a body wash which comprises of various ingredients can reduce the operational costs and increase the output, by opting the use of machinery or incorporating the outsourcing help for production.
So, let's get started and figure out the seven latest and advanced ways to boost the operational productivity of your retail business.
1. Structure inventory management
When managing retail inventory, a data-driven approach needs to be put in place. By figuring out the most sold item types, you can order in advance for them to be always in stock.
Similarly, figuring out the unsold items let you reduce or cancel its order, eventually saving on costs and utilizing the same on products that are more in demand.
Apart from this, it is recommended to conduct inventory checks on a regular basis to uncover missing goods or errors that add up to the shrinkage cost. Also, the order rate needs to be in place with proper steps to be taken to ensure timely product deliveries, along with zero customer returns.
2. Enhance the shopping experience
It is a known fact that you can't win customers with mere price offerings. You need to provide them with a shopping experience that makes them feel privileged at your place rather than shopping from Amazon, explains a provider for retail accounting services! The following strategies will help you in achieving the same:-
- A loyalty program to reward and encourage repeat buying through a POS system
- Amenities like free Wifi, drinks, snacks, seating, etc.
- Training your team for a better customer service
- Hiring the best team with customer relationship skills and more….
3. Gather customer feedback
- Customer Surveys: Surveys are one of the best ways to know what the customers feel about a particular brand, along with their specific requirements. However, the surveys should be rewarding in some way; else, the customers do not show any interest in them.
- Usability Testing: There are tools and programs which test the usability of a website and help in improving the overall user experience. This includes retail website navigation, mesmerizing formats, intuitive options, and more.
- Testimonials: By 2016, the e-commerce fraud went up by a staggering 33%. To make the new users interested and confident about your products, you should have testimonials of your previous customers in place.
- Comment Forms: comment forms are also one of the best ways to gather customer feedback. People are always looking to comment on things online, and making them do the same for your retail business is not a hard thing to achieve.
4. Reduce shrinking
When it comes to retail shrinkage, theft, and loss form a part of your inventory, which includes shoplifting, mistakes in pricing, paperwork, administration, and more. Real-time monitoring and alerts, along with built-in features for checks and balances, should be in place. The following stats say it all about the retail shrinking:
- $100 billion worldwide retail annual loss
- For typical retailers, the figure is around 1.8%, but fashion retailers experience more shrinkage in the form of 2.43%
- 80% of retailers are investing in security measures for tracking the inventory
- Shoplifting constitutes of 36.5% of retail shrinkage
- Employee theft makes up for 30% of retail shrinkage
- 21.3% of retail shrinkage occurs due to administrative errors
5. Better business management with automation
- Weekly Time Track: Automate audit on your work activities to know the time allotted to various weekly tasks, and take steps to cut down on time wastage.
- Ask Employees: Ask your employees regarding their work tasks which demand maximum efforts and time, and try to automate the same.
- Ask Customers: Ask your customers for negatives in your workflows, and automate the same to provide them with a seamless experience.
- Competitor Analysis: It is essential to analyze, bring in use, and automate the business processes of your competitors and know what makes them stay ahead of you.
6. Implement a POS system
Adopting a modern transaction approach with POS (Point-of-Sale) in the form of tablets and other touch screen enabled devices to boost operational efficiencies, along with providing the following benefits:
- Reduced IT Costs: Android tablets and iPads reduces IT infrastructure costs to a great extent.
- Fast Checkouts: POS enabled tablets to offer easy user-interface to operate for fast checkouts.
- Robust Analytics and Reporting: POS provides complete transaction data, enabling you to take necessary strategical actions.
- Fast Marketing: POS devices collect customer emails on the spot, speeding up the marketing efforts, along offering in-store rewards.
- Key Business Tools Integration: POS systems let you integrate with tools like e-commerce, accounting, email marketing, etc.
7. Analyze key performance indicators (KPI)
Although a lot of KPIs exist in the retail business, the following three makes it to the top of the essential list:
- Store Traffic: The number of visitors to your retail store is termed as the store traffic. The physical traffic is different than the online traffic and should be evaluated against the total sales to work on the conversion strategies.
- Total Sales: The total sales carried out by your retail business is an important KPI and retail accountancy metrics. It gives you an idea of the business performance and provides insights into its strengths and weaknesses.
- Profit Margins: In simple terms, it is the difference in the amount value of sales and costs. This profit margin is the backbone of your retail business, around which the business strategies are focused.
Some KPI examples
- Average Transaction Size: Analyzing the customer's purchasing behaviour.
- Customer Retention: Keeping customers retained for long.
- Total Orders: Complete list of placement of the orders.
- Total Regional Sales: Evaluation of sales by region.
- Average Customer Units: Gaining insights into customer behaviour trends.
- Total Sales Volume: Tracking total transactions for one year.
- Back Order Rate: Measuring your ability to meet customer orders.
- Rate of Return: Measuring the number of returned orders.
- Real-time order tracking: Track and analyze your orders in real-time.
- Perfect Order Rate: Measuring the number of seamless order placements.
The bottom line
To run a retail business smoothly, it is imperative to not only maintain the product quality but also consistently review and optimize the retail business's operational processes. Apart from this, bringing in the use of automation helps in speeding up the business processes, and lets you focus more on your business growth.
About the author
Alika Cooper is a business development manager at Cogneesol, a business outsourcing service provider. She holds 7+ years of experience in branding, advertising, and public relations. She is focused on helping startups and small businesses to get the most value of their money and grow their business.
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