Retail store management has changed significantly in the last several years. The rise of retail eCommerce has resulted in a decline in profitability for traditional retailers.¹ To reverse this trend, retailers can employ several strategies that increase profitability.
Given that modern retail store management includes several different channels, improving customer service, creating a personalized experience, optimizing staffing, and reducing shipping costs can all help retailers maximize revenue.
Improve Customer Service for Retail
Customer service is at the core of every retail business and most certainly affects profitability. In stores, sales associates can use iPads to help patrons locate items of interest or even complete the checkout process so visitors do not have to waste valuable time in line. Online, retailers can use chatbots to help customers identify items of interest and bridge the gap between the online and offline experience. Customers who feel valued are more likely to return, building brand loyalty.
Keeping the relationship between customer service and brand loyalty in mind, retailers can provide more value to frequent customers while enticing them to spend more. These shoppers can be encouraged to enroll in loyalty programs for exclusive rewards, discounts, presale opportunities, and more by meeting shopping thresholds. Ensuring that frequent shoppers achieve monthly objectives can be a source of recurring revenue for retailers.
Related reading: Personalization Mistakes In Retail That Hurt Customer Experience
Create a Personalized Omnichannel Experience
To take customer service one step further, retailers can create personalized omnichannel experiences that speak to consumers’ needs every step of the way. Personalized experiences can include sending electronic promotional offers for birthdays and special events, custom in-store displays, or even having a designated sales associate that can provide assistance every time the customer comes into the store.
A frequent pain point of customers is that they do not feel valued, whether it’s receiving generic mass email offers or coming into a store where one sales associate is responsible for assisting multiple customers at once.
Retailers that focus on personalization both online and offline can ensure that customers’ needs are met with customized offers and designated sales associates. It’s important that staffing needs are met for the busiest times of year.
Optimize Staffing to Reduce Overhead
Retail store managers without access to business insights might not realize they are understaffed during busy periods or overstaffed during quiet periods. Leveraging reports to balance staffing across days of the week and store locations is essential to reducing costs.
Stores that are understaffed may not be able to serve every patron that walks into the store, potentially hurting the customer experience and the likelihood of a purchase. On the other hand, overstaffing costs stores money despite associates remaining idle throughout the store. Finding the right balance can both reduce overhead and improve customer happiness, ultimately increasing profitability and facilitating the long-term viability of the store.
Reduce Shipping Costs
Although reducing shipping costs sounds counterintuitive to increasing profitability for retailers, it is highly effective. Shipping costs can deter prospective customers from completing a purchase. Charging less for shipping may encourage shoppers to spend more on actual merchandise too, in turn growing the company’s bottom line.
Additionally, retailers can save their own shipping costs by sending shipments directly from brick and mortar store locations. For many years, retailers were reliant on warehouses to store inventory and start shipments. However, maintaining a warehouse costs more money, and shipments can not be delivered as quickly, affecting both profitability and customer satisfaction.
Reduced shipping costs can help both retailers and customers alike in order fulfillment and getting more value out of each purchase. Retailers that show value to customers in different ways will have higher retention rates and over time, build brand loyalty and equity.
Runit’s cloud-based integrated inventory management and POS system works in tandem with an omnichannel order fulfillment solution to improve the customer experience and increase profitability for retailers. As profit margins continue to decline, retail store managers should look to modern solutions to ensure their businesses are able to thrive.
To learn more about increasing retail store profitability, contact a member of our team today.
Sources
¹https://nrf.com/insights/economy/nrf-forecasts
