Best Practices Retail Management: Improve Store Performance
As a retail manager, you are always looking for ways to improve your store’s performance. Whether it’s sourcing new products, streamlining selling procedures, or finding ways to better engage with customers, there is always room for improvement. To help you out, we’ve compiled a list of our best practices retail management.
What is Retail Management?
Managing a retail shop involves overseeing its daily operations, including handling customer transactions, managing inventory, and hiring and training employees.
Best practices retail management ensure that customers have a positive and enjoyable experience while shopping. Furthermore, it keeps the front-office operations running smoothly to maintain the profitability of the business.
As a retail store manager, you’re responsible for a variety of duties. From keeping track of inventory to making sure your store is clean, you have a lot on your plate. Other key skills that are important for a store manager to have are good people skills and a positive attitude, good decision making, critical thinking skills, and analytical skills.
Best Practices Retail Management
To maximize efficiency, consider some of the strategies used by retailers.
1. Promote Communication
All parties need to be on the same page and work towards the same goals. This means that communication between internal and external parties is a priority.
Employees, suppliers, and business partners must have a clear understanding of their daily objectives and commitments. This will help everyone work together more effectively towards common goals.
2. Understand Competition
To stay ahead of the competition, it is important to understand their strengths and weaknesses. This will help you develop strategies to keep your business on top.
Retailers should examine the pricing methods, business models, customer service, partnerships, and internal processes of other companies to create a competitive business.
3. Utilize Key Performance Indicators
KPIs are an important way to measure how well your company is doing. They can be used to track progress on things like production goals, inventory levels, or spending. Having KPIs in place makes it easier to see where your company is succeeding and where improvements need to be made.
4. Prioritize Tasks
In an industry where multiple processes are running at the same time, it is important to be able to prioritize the tasks that need to be done first. Store managers need to be able to manage their time effectively to get the most important tasks done.
As a retail manager, it is important to have a clear understanding of what tasks need to be completed each week to maintain a successful operation. This means designating employees for specific functions and preventing them from becoming overworked by multitasking. Overworking employees can lead to human error, which can be costly in the competitive retail industry.
Steps for Successful Retail Management
The retail management process is extensive, as it must cover the various facets of the retail industry. Generally speaking, businesses must perform four main tasks to run a successful retail operation: planning, buying, moving and selling.
As retailers have many tasks to perform daily, management must plan each procedure thoroughly to ensure the desired outcome is achieved. A detailed outline prevents the misuse of resources, unnecessary expenses, and risks. The planning phase requires a lot of time and energy but it is vital for proper execution.
1. Market Research
Retailers who are successful invest a lot of time researching their product, market, and competition. By taking the time to research, they can effectively target their marketing. This leads to more sales and profits.
When starting your market survey, ask yourself:
- What items are currently on the market?
- Which vendors are selling these products?
- What is the growth trend in the industry?
- What are the typical expenses with the product?
After the products have been selected, retail management must then find the means to transport the goods from the supplier to the store. Aside from the physical transportation, finding a company that falls within budget while providing prompt deliveries is crucial for successfully executing dependent operations, such as stocking and fulfillment.
Budget planning is essential for any company to ensure that expenses are aligned with revenue. Without a budget, businesses run the risk of spending more than they bring in, which can lead to financial difficulties.
Retailers should consider not only purchases and investments, but also operational costs such as hourly wages, utility bills, rent, and other financial obligations. For startups, expenses often exceed profits until the business gains recognition; however, budget planning can help determine how long it will take for the company to break even.
4. Profit Margins
To set prices, management must first determine their desired profit margins. They must then take into account the cost of the products, logistics, and expenses. Retailers must also consider what customers are willing to pay for each product. However, businesses should prepare for the fact that rates may need to change depending on the demand. Therefore, setting a minimum profit percentage that can maintain income ensures that companies can meet financial obligations.
The staffing needs of a store are affected by its size and the company budget. Often, retailers begin with the minimum number of workers and hire as needed to save on labor costs.
The management team at the store needs to consider the many positions that need to be filled, such as stockers, sales representatives, and cashiers. If there is insufficient staffing, it can lead to poorly run operations and unhappy customers, which in turn can hinder the store’s image and profitability.
Retail management should focus on building comradery between employees to ensure smooth workflow. When team members are not working together, it can lead to decreased productivity and operational efficiency. Therefore, proper training, human resource management, and team-building exercises are essential for creating a healthy work environment that promotes employee retention and satisfaction.
Incentivizing your team can have positive impacts beyond just boosting morale. Recognizing top performers with bonuses or promotions shows your employees that they are valued, and can be a key factor in maintaining a high-functioning and motivated team.
6. Inventory Control
Inventory is the most valuable asset. It must be optimized and maintained to ensure profitability and longevity. Many retail businesses experience inventory loss due to theft. If merchandise isn’t closely monitored, shrinkage can lead to loss of inventory, which can negatively impact profits. Businesses can be protected from theft by actively monitoring and regulating products.
Retail businesses can use multiple vendors to ensure they have pricing options and backups in case one supplier fails. Managers should research suppliers that can meet their company’s needs based on price and delivery times, return policies, or discounts. The right vendor can lead to a symbiotic partnership, where both parties can benefit from exclusive deals.
The moving stage refers to preparing items and making them available for purchase.
1. Receiving Goods
Once the items have been received by the retailer, a thorough quality and quantity check should be conducted to ensure that no goods are damaged or missing. Management should cross-examine the purchase order, shipping label, invoice, and physical products to ensure that everything has been delivered as expected.
Once all items have been accounted for, the management must decide where to store stock after shelves have been filled. Some businesses may be able to store their stock in a back-storage area, while others may require additional warehouses or third-party facilities, which may incur holding fees. No matter how the stock is stored, items should always be organized and easily accessible so that it is easy to replenish the store.
3. Product Presentation
Customers should be able to see and grab products easily by grouping them together. Similar products such as shampoo, conditioner, or hair accessories should be placed next to each other. This not only simplifies the buyer’s shopping experience but also encourages them to make additional purchases.
Retail managers must ensure that all price tags display the correct cost to avoid customer frustration and mistrust. If an item’s full cost is not displayed, customers may become agitated at checkout when they discover the item is more expensive than they were led to believe.
The final stage of retail management is to complete customer purchases. A company’s profitability depends on its ability to market and sell products. Management can enhance retail sales in several ways.
1. In-Store Assistance
If customers have questions about product location, quality, or price, it is important to have employees present who can address these concerns. This shows customers that the company values its business and is willing to assist.
2. Customer Service
A key element of retail is providing excellent customer service. Retailers that prioritize building customer relationships rather than pushing products find greater success than those looking for a quick sell. Customers who feel pushed to buy a product don’t feel valued and often seek alternatives. Employees should take a genuine interest in the buyer’s problem and seek the best possible solution.
3. Complaint Management
When a customer makes a complaint, management should stay calm and listen to their concerns. If the issue is due to poor customer service, management should speak with employees to identify any problems. However, if the complaint relates to an item, employees need to be knowledgeable about the store’s return and refund policy. Regardless of the issue, it is important to reassure the customer that their feedback is appreciated and taken seriously.
If you’re looking to improve your retail store’s performance, implementing best practices retail can make a big difference. So don’t wait – get started today and see the results for yourself!