In the retail industry, as in many others, there’s a growing need to increase efficiency whilst reducing operating costs along the way. Essentially, operation managers need to figure out how to do more with less which can pose some real challenge when combined with increasingly demanding customers regarding the quality of products and services.
In this article, we discuss what these challenges for retail operations are in 2023, and how you can overcome them to make sure your company isn’t left behind.
1. Retail price inflation
Year after year, customers are paying more for basic goods, which means they’re less likely to spend as much money on other kinds of retail products; this became specially true during 2022. Simultaneously, retail prices are likely to rise because retailers need to bear with higher costs.
There are three steps to overcoming this issue, which are: (1) make sure potential customers have a valid reason to buy and that they consider the products you’re selling to represent good value for money; (2) optimise your operations and cost control by investing in better planning (here’s where technology comes in handy); and (3) periodically make sure that your current suppliers are still the best fit and, if not, try to negotiate prices or to explore other options.
Customers are progressively less interested in “one-size-fits-all” services or products. Customisation is a trend that is growing. Every year, customers are looking for products that they can customise and for experiences that feel unique.
Retailers must develop personalised proposals and make sure they’re generating quality interactions with customers. For example, have you ever thought about sending personalised emails or SMS about special offers relating to each customer’s preferences? For larger numbers of customers, this can be achieved using a CRM (customer relationship management) system. This is a surefire way to boost customer retention.
More and more people, especially younger generations, are becoming aware of environmental, social and ethical issues, and naturally, this reflects on their choices as consumers. People are making decisions not just based on which the products to buy, but also on the practices of the businesses they’re buying them from.
One easy and impactful way to become more sustainable is to go paper-free. For example, you can replace paper with a software solution to plan your operations or you can start sending invoices and receipts by email.
Switching to clean energy options in order to reduce waste and recycling are also big steps towards becoming sustainable. Don’t forget to be transparent and authentic in your communication to make sure potential customers know about your efforts to be sustainable. It is something they will value and that will give them a push towards your business.
4. Employee retention
Retaining retail employees is a constant challenge. In fact, the retail industry has one of the highest employee turnover rates. There many different reasons including repetitive work and unstimulating routines, lack of incentives for employees and insufficient training.
Assuming you’re hiring the right people for the job (hiring the wrong people is also a big reason for high turnover rates), increasing employee engagement is obviously the best way to avoid your staff from moving on and it’s fairly easy to achieve with initiatives like employee discounts, team events, setting individual sales goals for each employee, having one-on-one meetings with employees among many others. You could also create career plans with employees so that they don’t think retail is just a depressing dead-end job.
5. Balance between human resources and technology
So far we’ve mentioned CRM systems to manage contacts and send automated emails, software solutions to plan and automate operations and for better cost control, but there are plenty more technology investments that can be made such as maintenance management systems with NFC tags to manage your buildings or something as simple and common as self-checkouts.
It’s obvious that investing in technology is imperative for retailers but these systems aren’t meant to replace employees. Not only are humans needed to operate and/or supervise these systems but human interaction is important to connect with customers and to create loyalty. Finding a good balance between technology and human resources is something retailers will have to manage in the coming years.