If you operate in the retail space, you know it can present a unique set of challenges – from single store retailers to multi-location chains. With the rise of the digital marketplace and influence of technology, the retail industry is in a constant state of fluctuation and evolution, forcing businesses to adapt on the fly and streamline their operations to stay relevant and profitable.
But while the industry changes, one factor remains constant: the importance of the bottom line.
While the industry changes and evolves, there are key considerations for business success applicable across the entire retail sector.
Here are 5 tips to help streamline retail operations and increase business efficiencies to sharpen your competitive edge.
The Implementation of Lean Processes
Running “lean” processes means operating in a streamlined capacity which focuses on continuous improvement to boost productivity and efficiency, in turn benefiting the bottom line. The primary focus of lean business is the elimination of waste in all its forms – wasted space, wasted time and wasted activity.
Pioneered by Toyota Manufacturing, the concept of operating lean manufacturing has expanded its applications to all facets of a business – from the physical office to operations.
The implementation of lean processes in retail boils down to understanding your customer and what constitutes value in their eyes, then evaluating every business process based on customer-centricity.
Your company’s mindset should be focused on whether the customer would benefit from – and ultimately pay for – an activity. If a process doesn’t focus on delivering your customer their desired value, eliminate it.
Internal communications are a delicate balance – too little can lead to a lack of cohesiveness and a lack of direction while too much can be time-consuming and overwhelming. To streamline internal comms, there are a few things to keep in mind.
As a rule of thumb for internal comms, less is more. Too many communications mean your employees will be inundated and ignore some of your messages. If you’re constantly sending FYIs, most messages will turn into a steady stream of static. Try to cut out messages that don’t align with strategic priorities to ensure employees hear what matters most.
Also consider who needs to hear what. This isn’t to say that you shouldn’t be transparent with the whole company about ongoing initiatives and important news, but rather that you should focus on targeted communications limited only to relevant parties.
Initiatives to Increase Loss Prevention
In retail, “shrinkage” is a massive problem that causes retail businesses to lose a massive amount of money each year. While it is, to an extent, a cost of doing business in retail, businesses can minimize the hit to their bottom line by implementing some basic loss prevention initiatives.
In the physical store, businesses can implement simple things like CCTV, signage and strong POS systems to help minimize shrinkage. It’s also possible to design your store for loss prevention by eliminating blind spots and leveraging strong customer service.
Staying on top of your inventory is paramount in loss prevention. Poor stock control leads to misplaced products and unchecked discrepancies which is why it’s important to count stock proactively rather than reactively. These counts can help you identify patterns and discover root causes of shrinkage.
But it’s not enough to simply count stock – you need to do something with that information. You can use inventory reports to identify high-risk signs or regions for your store and translate those reports into action.
It’s also important to communicate with your staff and to make sure they understand where these high-risk areas are and how to minimize stock loss. It can also be valuable to implement incentive programs for staff to reduce shrinkage.
Storage and Inventory Management
Managing storage and inventory can be tricky but it’s an important skill for retail businesses to master. Proper store and inventory management can mean having the right products in the right quantities to keep items flying off the shelves and improve your business’ bottom line, while improper inventory management can leave you storing a surplus of items that won’t sell.
While it might seem intuitive, ensure you’re basing projections on historical data. While you can – and should – account for seasonal uptick, base your forecasts on data from the last six months.
It’s also important to look introspectively at your product offering and prioritize accordingly. It’s said that 80% of consumer demand is generated by 20% of products so it’s important to identify your strongest sellers and order accordingly.
Slow-moving items occupy the shelves for a long period of time. These products eat up space, in turn risking the supply of fast-moving items and jeopardizing your business’ ability to match up with demand. In retail, procurement and availability should be a top priority.
Running a retail business, particularly a business with multiple locations, can be a challenge at the best of times, from staying on top of product orders to managing staff to inventory counts and marketing. But it doesn’t stop there.
Retail businesses require a host of operational items that are vital to business functionality but that can easily fall by the wayside – from money management to maintenance items to custom printing goods like branded receipts. Stocking and storage of these necessities is a costly and time-consuming effort. It can also be a nightmare to manage multiple suppliers, each with their own timelines and nuances.
The implementation of consolidated ordering from a single supplier can streamline the management, ordering, and storage of these precious items to save time, money and energy.
At Northern Specialty Supplies, we can simplify your processes by consolidating delivery for all these needs. And with our unique distribution capabilities, we simplify the process for busy retail businesses by buying in bulk and warehousing supplies. This means that we can save you money on shipping costs, eliminate import hassles, speed up delivery time and ensure stock is always available when you need it and streamline your accounting through the elimination of multiple invoices.