While the majority of small businesses face obstacles in managing their businesses, customers and employees, retailers face unique challenges that have the potential to reduce revenue or if adequately addressed, can be utilised to boost growth. Jon Boland, General Manager at Clover UK, outlines how retailers can face this challenges and optimise the way they manage their business.
The fast-paced and ever-evolving nature of the retail sector provides small retailers with unique obstacles. Managing operations alongside overseeing employees, products and services is a challenge faced by all and one which has the potential to reduce revenue and negatively impact customer loyalty if not properly managed.
Despite this, these same issues can present opportunities for small retailers to upgrade their current processes and optimise the way they manage their business. If addressed head on, they can utilise them to promote growth.
Operational inefficiencies
Operational inefficiency – in managing inventory, staff or supply chain – can have a particular impact on the often-tight profit margins of small retailers. With the recent increases in the cost of goods, transportation and utilities, small retailers must properly manage their operational costs just to stay competitive. Having a poor grasp of cash flow can further squeeze profit margins, putting their business at risk. Keeping on top of cash flow and optimising resources is vital to driving profitability, since hidden costs can have a much bigger impact than they would for larger retailers. Retailers lacking a comprehensive understanding of their operational expenses may jeopardise their profit margins as they are often unaware of improvements needed to optimise their financial resources.
To enhance operational efficiency, small retailers must concentrate on streamlining processes to save time and money. Investing in technology that organises stock, takes over organisational and administrative burdens and tracks costs and spending will help them keep on top of items that otherwise may slip through the cracks. By integrating technology that has the ability to manage employees, inventory and payroll, small retailers can put that additional time and money back into their business, rather than spending it on administrative tasks that are easily simplified using scalable digital tools.
Competing with larger online retailers
The vast majority of small businesses must compete with larger online companies in an increasingly global marketplace. This is particularly the case in the retail sector. Online retailers have an inherent advantage compared to small retailers as they can offer lower prices, offer greater convenience and a wider range of goods to customers, who don’t have to leave their homes. This makes it difficult for small retailers to compete, particularly if they’re solely relying on a brick-and-mortar shop. In fact, with more than 80% of retail customers conducting online research prior to making a purchase, it is more important than ever for small retailers to have an online presence if they wish to widen their core customer base and compete with larger online retailers.
To do this, small retailers must create an omnichannel experience for their customers that unites the online shop with the physical shopfront. This ensures customers have a variety of options available to them, optimising the shopping experience. A successful e-commerce strategy should aim to be both dynamic and inviting. Factors such as identifying a target audience and positioning products accordingly are key to marketing success, ensuring small retailers stand out in the crowded e-commerce marketplace. In terms of logistics, a retailer’s online site should give its customers a range of payment options, as well as provide convenience and flexibility for the business owner and employees. This can be achieved by ensuring the online site is able to accept credit and debit card payments from any device, manages all incoming payments and orders and is protected against fraud.
Replacing outdated, manual tools
For busy small retailers, updating their technology can seem like a daunting task, especially if they and their staff are familiar and comfortable with their current manual processes. However manual tools and processes can lead to mistakes and inconsistencies, including miscalculating inventory, greater carrying costs and an overall decline in revenue. Through automating these processes, it is easy to avoid common errors, such as mistakenly selling an out-of-stock product and having to delay shipping.
Small retailers should embrace new technologies that aim to make it easier for their employees. For example, integrative digital platforms can streamline administrative aspects of a small business, including tracking and reporting on all transactions and customer purchase trends and assisting management processes such as scheduling shifts for employees. For small retail businesses, integrating new technologies also guarantees precision and accuracy in managing all administrative processes. For instance, tracking down specific transactions is easier than ever due to the volume of data platforms which are capable of storing data, while an easy-to-navigate user interface avoids the panic that ensues when attempting to find precise information using outdated technology or manual records. With these processes taken care of, employees have significantly more time to focus on other aspects of the business, such as engaging with customers, marketing their products and services and ensuring customer satisfaction – high value tasks that contribute to small retailers’ growth.
The opportunity for growth
Whilst dealing with these issues may seem like a daunting task for small retailers, acknowledging the potential challenges and taking preventative measures can turn the issue into an opportunity to upgrade current processes and boost growth. By eliminating outdated practices that no longer serve current business models in the rapidly developing retail industry, small retailers can make room for more efficient processes.
Small retailers that adopt up-to-date technology specifically designed to simplify administrative operations will create a much smoother experience for managing their business and employees. It will also minimise the margin for error, enabling a more consistent experience for their customers and boosting customer satisfaction and loyalty. With the tedious administrative aspects of the business taken care of, small retailers can concentrate on building their customer base, optimising the products and services they offer and focusing on what