To say that 2020 was a challenging year for retail would be an understatement. Because of COVID-19, shelter-in-place retail and orders shutdowns, overall sales in March were down 6.2 percent year-over-year. That monthly fall is the biggest ever recorded, which makes it even greater than the 4.3 percent decrease in November 2008 throughout the Great Recession.
But the great thing is that U.S. retail sales rose by 17.7percent in May 2020. And e-commerce saw the largest surge, with total online spending totaling a whopping $82.5 billion in May, up 77 percent .
Things are gradually beginning to open back up, and though the environment will still be rather challenging, now’s the time for retailers — online and in brick-and-mortar — to be sure they’re optimizing their operations to ensure maximum efficacy. From executing a retail management system to omnichannel selling, here are five ways to start.
Determine your key performance indicators
Before you can enhance your retail operations, you will need to understand what you are measuring. Key performance indicators (KPI) help you establish baseline numbers to your company that provide you a precise starting point from which to develop and improve. The simplest way to do this is with a reporting and analytics tool such as Vend, which permits you to easily track and monitor your store’s performance, helping you make better inventory, sales, and promotion decisions.
While every company will have it’s own metrics to monitor, the KPIs below will get you started:
- Total earnings
- Earnings by shop (if you run multiple places )
- Earnings per square foot
- Gross margin return on investment (your gain return on the dollar amount invested in stock )
- Top-selling items
- Worst-selling items
- Average earnings per worker
- Inventory turnover rate
- Conversion rate
- Cost of goods sold
- Profit margin ((Gross profit / total revenue) x 100)
Improve inventory management
Surprisingly, 43 percent of small companies in america do not track inventory, and merchants are sitting on approximately $1.36 of stock for each $1 in earnings, as of 2019. The fantastic thing is that you can decrease your total inventory costs by 10 percent by decreasing overstocks and stock-outs. To put it differently, inventory management is of extreme importance.
The best way to maximize your inventory procedures is to use inventory management applications, since this will provide you insight into the most crucial locations, such as gross margins, inventory turnover ratios, and revenue performance. The software can also offer extensive reporting so you know what is selling and what’s not. This can help you predict trends and create data-driven decisions that permit you to keep your shops stocked with products that market — and eliminate the ones which don’t.
Not only does this save time, but this also saves you money because If you sell something using an expiration date, you are in a better position to prevent unnecessary spoilage. Good inventory management also reduces dead inventory — items which don’t always have an expiration date, but that will quickly go out of style or season.
Ultimately, inventory management may even impact warehousing costs. When you have too much merchandise to put away at once or if you are stuck with something that’s tough to market, storage costs increase. As soon as you’re able to avoid those costs, that is money that could be better utilised in other areas of business.
Offer an omnichannel customer experience
Today’s shoppers are not just walking into a shop for all their purchases. Some look for a product online and then visit the brick-and-mortar location to make the purchase. Others may be at a brick-and-mortar place, see an item they are interested in, and then pull out their telephone to compare prices before making the purchase. Whatever the circumstance, the main thing is that retailers are maximizing the omnichannel buying experience, ensuring these stations are interconnected and offering a seamless purchasing procedure.
In actuality, businesses with a good omnichannel strategy see 91 percent higher year-over-year customer retention rates than companies that don’t. So how can you capitalize on this? First, be certain that you provide a leading mobile encounter, as one survey found that 90 percent of clients have had a negative cellular experience, making them less inclined to work with a company. Make certain you have quick load times and an easy-to-navigate screen and searchable website.
Then enhance your response times on social networking and be sure that your employees are providing fast and effective solutions, as one study found that customers are prepared to pay more following a positive reaction from a company on social networking. If resources permit, consider implementing live chat on your website because 63 percent of people are more likely to revisit a website if that is offered as an alternative. If they are able to rapidly get help, it reduces customer frustration and may even increase sales, as it provides the employee the chance to also present an upsell.
The key is to be certain the client is getting a constant experience — if they are interacting with you in person or online.
When you are running a business, there is always something to do. And by implementing automation for specific jobs, there’ll be less for one to really do since these routine tasks can treat themselves.
By way of example, rather than managing your workers’ hours by hand, you can use a POS system to monitor when they work. Rather than manually ordering products, stock management applications can be programmed to automatically fill orders when inventory gets to a certain degree, meaning clients will not ever be disappointed in out-of-stock products.
The tasks that you decide to automate will be specific to each provider’s individual needs, but a fantastic place to begin is by monitoring what you do in a week to find out how long you spend on each job. This can allow you to find out where you can better be spending your energy and time, and what could be automated to free up more of your time. Then ask your workers, as they are often the ones too doing the boring tasks and will have ideas on how things could run better.
After taking stock of the situation, ask yourself the following questions:
- Is the job repetitive?
- Is your workflow simple and easy to automate?
- Will automation save time and money?
Bear in mind that not every job can — and should — be automatic, but understanding which areas could benefit from this procedure is a massive step towards optimizing your retail operations.
Utilize a retail management system
Speaking of automation, it is vital that you employ a retail management system to be certain that your company is operating at the maximum efficiency possible. Beyond just being a way for clients to cover, a strong retail platform may also:
- Manage inventory counts
- Streamline Advertising
- Provide customized reports to help make data-driven decisions
- Improves staff training
- Check stock levels in several places
- Manage yields
- Get client and product insights
- Integrate with e-commerce systems
- Make staffing choices
- Employ and manage loyalty programs
POS systems provide retailers with the essential tools to streamline procedures, make data-driven decisions, and assist with everything from revenue reporting to employee and client management. Make certain to work with a supplier that will help you harness all that your system offers, ensuring that each move you make will be of advantage to your organization.
Moving ahead with your retail operations
As a busy merchant, you are aware that you will need to find any way to take advantage of your time and your money, and the advice above can help you take advantage of both. When it’s streamlining and automating tedious tasks or enhancing your use of important metrics for data-driven decisions, optimizing your retail performance will leave you more time to do what you would like to do — develop your business.
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