Retail Shops are places where we all visit to buy our favorite shirt, to shop for groceries, to buy medicines, to purchase the trending smartphone, to get the cosmetics for the party and whatnot. There are many advantages to selling all this through a retail store when compared to selling them online.
These advantages include direct communication with the customer, you get to decide on the discounts and offers, payment is done in cash, and you can give a credit window to an old regular customer.
But hang on, what about the challenges in retail industry? Do they outweigh the advantages these retail stores have over their online counterparts?
What are these operational challenges and how to overcome them?
Of course, there ought to be certain challenges when you are managing a retail store as it is a going concern. Thus, as an owner, you need to strike the right balance to achieve the highest productivity. Let’s look at some of these operational challenges in managing a retail shop:
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Evolving Customer Demands
Customers change what they like very quickly, just like how Clark Kent changes into Superman in a telephone booth. Remember things like Walkmans, shell suits, and mullets? They were popular once but not anymore. To keep doing well, stores need to change with what customers like.
Most people, about 85%, say that COVID-19 changed how they shop. Now, they buy more things online and get them delivered. In the US, online sales went up by 44% because more than three-quarters of shoppers now buy stuff online. But regular stores shouldn’t worry too much!
Even though many people shop online now, a study found that half of shoppers still like going to stores. Actually, about 81% of grown-up shoppers plan to keep shopping in stores.
Chances of Stock Out of Inventory
Inventory management becomes a major problem for the owner. You should know what to buy and what not to buy and also how much of it to buy based on interaction with customers. Optimizing this process to avoid stock out of a product or to avoid piling up of inventory with no demand becomes crucial.
This problem exacerbates when you have multiple stores in the same city or in different cities for that matter. You should have a centralized automated inventory management tool/software to manage this operational challenge.
Also Read: How To Run A Successful Retail Business?
Maintaining Relationships with Customers
You need to have the business acumen to run the business, but what many owners ignore is the human side of it. At the end of the day, you are doing business with a human being only, thus providing them a good shopping experience becomes important.
Ignoring or being rude to the customers or coming across as taciturn is detrimental to the business. Personalized selling is here to stay, you need to know what the customer wants the next time they walk into your store based on their history of buying.
Also, send them personalized emails on their special days and ask for their feedback constantly. This is how you can tackle this challenge and create customer retention and loyalty.
Also Read: Benefits Of Starting Offline To Online Business – Retail
Competition from Player Selling Online
Digital disruption has changed the dynamics of the game completely since its advent and quick adoption. E-commerce shopping gives customers a wide range of options to choose from, get it delivered at their doorstep with return and refund policy if they are unsatisfied with the product.
Brick and Mortar retail shop’s sales have taken a hit to the extent that some of them are struggling to achieve break-even. Instead of competing with online shopping, retail shop owners should collaborate with them and also start selling their products online along with their retail business. They can reach a wide range of audiences with this partnership through Omni channel selling.
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Managing Operational Costs
There are a whole lot of costs involved in running an offline business and it’s a costly affair. These operational costs range from employee cost, their appraisal, warehouse cost to logistics costs, marketing costs, rent and electricity expenses, maintenance and repair cost, etc.
These costs are inevitable if you’re in the business and cannot be ignored. But what can be done is to minimize these costs by analyzing the returns from these costs and accordingly decide the budget of each of these heads.
Data Management
Data is the new oil as quoted by the industry stalwart from Reliance lately. You can do almost anything if you have the data, but wait, let me rephrase if you have the authentic data. Just having random fudged data won’t take you anywhere, you should have the right data and you should know how to use it to the fullest. The data should be up to date collected from real-time interaction with the customers and the sales team.
Also Read: Tips For Demand Planning For A Retail Business
Improving Staff Efficiency
Every store has many workers who are skilled at talking to customers and making them feel welcome. They’re like friendly warriors who know how to make people happy and persuade them to buy things.
Just like people in other jobs, these workers need training to stay good at what they do. But the usual training methods are boring and take up a lot of time. Sitting through training sessions feels like watching a long and boring movie.
Listening to instructors, watching videos, and reading old manuals isn’t the best way to train retail workers. It’s also a hassle for managers to leave their stores to attend these boring sessions.
Plus, it’s hard for workers to find time to learn when they’re already so busy. There are always so many things going on that it’s tough to focus on training. So, making sure workers get good training and work efficiently is a big challenge for the retail industry.
In this era where the digital wheel is rotating and crushing the conventional retail shops under it, the latter has to make informed decisions and do not miss this digital bus.
They should not completely shut their existing business by going online but manage both to boost sales and increase brand visibility. One piece of advice before closing, always remember this basic principle: Customer is the king. Offer them what they are looking for and what they want to buy rather than what you want to sell.
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With minimum documentation and eligibility requirements, your search for the best business loans for your retail shops ends at Indifi. Call us or send us an email to apply for an unsecured business loan and know more about our offerings.