There are always new challenges facing businesses as the retail industry rapidly changes due to technological evolution. Several major retail companies have filed for bankruptcy since 2017, and this trend is likely to continue until the end of this year and into the next. This is definitely a wake-up call for retailers, but it doesn’t spell doom for retail stores.
There has been a frightening number of bankruptcies, but there are also major retailers who have survived and flourished in this volatile industry. Their success has been due to their ability to adapt to the rapid changes in the market. As a retailer, you should be aware of what major challenges you’re facing as your company heads into the approaching new year.
1. Digital disruption
Consumer behavior is changing rapidly, and this is largely because of the explosive growth of e-commerce. Customers have many choices at their fingertips before they commit to a purchase decision. A huge share of purchases are now made online, but studies show that consumers prefer to buy things in person at brick-and-mortar shops. It’s common for customers to research products online only to make a purchase in person. Therefore, you should see this as an opportunity rather than a sign of doom. It’s relatively easy to expand your business into an online platform.
2. Finding technology solutions
Business owners have endless options for technology platforms that can streamline and help scale up their businesses. Most retailers look for software to improve their processes, but they often make misguided choices. Business owners need to understand exactly what the software offers and whether it fits the needs of their business model. A complex and unwieldy software platform can actually increase costs and throw discord into a company that was functioning passably without it. For best results, look for software that is specifically designed for retail businesses.
3. Maintaining your customer base
Brand loyalty has become a much more prevalent term because customers have so many more options available to them today. It is a common mistake to make a sale without trying to attract repeat business from the customer. In today’s business environment, this is often a path to failure. Traditional customer loyalty programs such as special offers and promotions are still effective, but there is now a growing trend of personalization. It’s important to maintain communications with customers in order to keep them loyal to your brand.
It’s also helpful to remember that most customers have a career where they’re required to provide some sort of service to people, so they know what it’s like on your side of the counter, and they expect that from your company. You can get to know your customers based on their previous purchases, and your staff can engage them in conversation to get a better sense of who they are individually. If you run a large organization, this type of information can be derived from database research.
4. Evolving customer expectations
Changes in what customers want and expect can change even faster than you could ever imagine was possible. Retailers need to be aware of seasonal trends and sudden changes in customer shopping behaviors. A few seasonal changes to your product lineup is usually all it takes to keep your store on track. The most effective way to approach this problem is to always strive for innovation.
5. Modern marketing
Because of the rapid changes in digital marketing, modern businesses need to reach out to potential customers via several different channels. Multi-channel marketing needs to encompass several methods, including email, social media and traditional paid ads. Customers are becoming more used to a certain level of one-on-one engagement that develops a more personal relationship to build trust.
It’s important not to compartmentalize customer data. This can happen if the different parts of the marketing department are not synchronized effectively. It’s ineffective if customers are bombarded with unnecessary messages due to inefficient communication processes within an organization. In this scenario, efforts to engage customers can backfire, causing them to seek out competitors. With the right technology solutions, marketing departments can avoid these types of blunders.
6. Inspiring and retaining employees
Retail has historically had a high employee turnover rate, and this is still the case today. One of the greatest challenges of a retail store is to keep a core of long-term staff. The benefits of this are decreased time and financial costs of hiring and training new employees, and loyal employees are also happier team members who perform better on the job.
One way to tackle this challenge is to increase engagement with employees by providing periodic new training programs that can maximize their potential. This process can be automated with a solution such as an HR management system.
7. Internal communications
As the retail market becomes more complex, organizations have more complex structures that require more sophisticated internal communication solutions. This task can be challenging, especially for medium-to-large organizations with several company departments. Needless to say, business processes become severely compromised when internal communications are inefficient.
Retailers have many options available to streamline their internal communication processes. The worst mistake is to try and rely on out-of-date methods such as Yahoo Mail or Outlook. Many retail companies today take advantage of enterprise resource planning (ERP) systems to improve and integrate company departments and business processes.
ERP systems can be the perfect way to solve internal communication problems and more effectively integrate business processes across multiple company departments. This software centralizes business communication and information handling. The platform can generate and share reports with other divisions and help automate task distribution among company departments.
There are many new challenges faced by retailers heading into 2021. However, there are some sophisticated technologies that companies have at their disposal that can enable a more personalized approach for engaging customers and help businesses adapt to rapid changes in the market. Only by fostering customer loyalty and a memorable buying experience can retailers expect to thrive in the business environment that is emerging in the approaching new year.