8 Fundamental Best Practices That Will Help Retailers Succeed
“In spite of all the nonsense around the retail apocalypse and the hyperbole retail is dead,” says The Retail Doctor, “brick and mortar stores can still excel in merchandising, in selling, and in creating an exceptional experience.”
Many retailers are complaining about how their businesses are struggling in the midst of today’s competitive landscape. But The Retail Doctor warns that business owners need to overcome that mindset because what they set their mind on is exactly where they’re going to end up.
Here are 8 best practices to help retailers improve their in-store processes, stay ahead of the competition, and grow their business:
8 Retail Best Practices That Lead to Retail Success
1. Offer Employees Competitive Pay, Training, and Benefits – According to Chron, the estimated cost of a lost employee earning $8 per hour is anywhere from $3,500 to $25,000, resulting from hiring expenses and training labor, plus lost sales and productivity.
Successful retailers don’t subscribe to the philosophy of “churn-and-burn” employees. They pay attention to the hiring process and take the time to hire the right applicants. They offer a competitive wage and thorough training to ensure that their employees have the skills and confidence to succeed and are motivated to stay at their company long-term.
2. Improve or Update Inefficient Inventory Management Processes – Even one bad process will negatively impact overall profitability. An inaccurate or out of date inventory management system, for example, can result in overages and shrinkage. Inefficient inventory management processes can also lead to frustrated employees, lost opportunities, and upset customers, all of which increase costs to the business.
“As a business owner, it is important to ensure that you are always leveraging the most effective, yet economical solutions possible,” says Business.com. “The overarching goal of any business is to make a profit, and cutting operational costs wherever possible can greatly impact that goal.”
A cloud-based POS system featuring a single database that’s integrated between the website and point of sale makes the inventory process easy and seamless. In addition to streamlining the inventory process, an integrated POS system ensures that inventory items on a brand’s website are represented in real time.
In a digital Age where customers are searching online before they head to the store to make a purchase, accurate and efficient inventory management is more important than ever for building brand trust and driving in-store traffic.
3. Limit Price Cuts and Promotions – Running a successful business is hard. Factor into that the ever-increasing competition, and it’s more important than ever to hold on to as much profit as possible. As HubSpot points out, when businesses discount by 50%, it means they have to sell twice as much in order to hit their same revenue goal. Unfortunately, many retailers don’t have the time or manpower to accomplish that.
Keeping a tight reign on inventory reduces loss and maximizes profit. It doesn’t mean retailers can’t have sales, but as The Retail Doctor advises, they shouldn’t be so frequent that customers can time their purchases and wait for the deal.
5. Hire Good Management – According to the Dale Carnegie Institute, “employees don’t leave companies, they leave people.” That’s why strong managers are one of the most crucial components of employee success which, in turn, affects business productivity:
“The productivity of work is not the responsibility of the worker but of the manager.” ~Peter Drucker
“It’s important to focus directly on managers as a lever of engagement to recruit, retain, and inspire the greatest asset to your company: employees,” says TLNT.
When considering things like recognition in the workplace, the importance of good managers becomes evident. Managers who recognize employee performance increase engagement by almost 60%. Increased employee engagement leads to improved customer service, which means more loyal customers and increased revenues.
As an added bonus, when retailers hire competent people they can trust, they’ll feel more comfortable delegating work to them so they can clear some things off their own plate and focus on other areas of the business that need attention.
6. Use Digital Tools to Drive In-Store Traffic – Surprisingly, many businesses continue to stick with the same traditional advertising methods they have always used instead of taking advantage of online marketing and social media (some businesses still don’t even have a website).
Retailers should build an online presence with an attractive, informative, and easy-to-navigate website. If a business website is already established, retailers can optimize it to load quickly and provide relevant content that’s focused on improving the user experience. Additionally, business owners should make sure their websites are built on a responsive platform so they’re mobile friendly.
Getting involved with social media will also help retailers engage with their customers on a more personal level and gain valuable insights that can help them adjust their marketing strategies for maximum effectiveness.
Online marketing is an important part of building brand awareness, connecting with consumers, and driving traffic—and revenue—to a retailer’s website and brick and mortar establishment.
7. Prioritize the Customer Experience – There is plenty of compelling evidence to suggest that investing in better customer experiences can drive significant financial benefits based on findings from an Avanade and Sitecore study:
- Companies surveyed experienced $3 in benefits for every $1 it spent on improving customer experiences
- 38% of the companies surveyed achieved better financial performance than their competitors
- 37% of the companies surveyed said they improved their sales cycles
As the above statistics indicate, the value of providing exceptional customer experiences, as well as its influence as a spending motivator, cannot be underestimated. In fact, Fivestars cites a report showing how companies that prioritize the customer experience generate 60 percent higher profits than their competition.
SuperOffice points out that, “89% of businesses are soon expected to compete mainly on customer experience.” This means that organizations dedicated to prioritizing the customer experience will stand out from the competitive noise and attract more customers.
8. Don’t Forget the Value of Repeat Customers
According to Forbes, “There’s a misconception in retail that you need to gain new customers all the time when in reality, repeat customers are what any business should aim for.”
As Fivestars points out, “repeat customers are moneymakers.” In fact, author, scientist, and management consultant, W. Edwards Deming, once said, “Profit in business comes from repeat customers…” Here are some promising stats that prove their point:
- 61% of SMB’s report that more than half of their revenue comes from repeat customers, rather than new business.
- On average, loyal customers are worth up to 10 times as much as their first purchase.
- A 5% increase in customer retention can increase a company’s profitability by 75%.
- The average repeat customer spends 67% more in 31-36 months with a business than 0-6 months.
That’s why it’s so important to evaluate how your business interacts with customers and to implement strategies that will lure current customers back to your store.
According to The Retail Doctor, “Retailers are reaping the harvest of decades of rotten customer service from department stores to boutiques to independent retailers.”
Yes, traffic may be down and some retail stores may be closing. But “If you’re crying the blues,” says The Retail Doctor, “you don’t have to look far to see why…many times it’s your fault. But you do get a chance to start over with the next person calling you on the phone or walking through your doors.”
Use the list of best practices provided above to create a corporate culture that is employee centric, efficient in inventory management processes, and dedicated to better-than-exceptional customer service.
“Do that and as other retailers fail,” says The Retail Doctor, “you’ll see the opportunity for you to do even better”.