7 Major Challenges in the Retail Industry & How to Overcome Them

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6 Major Challenges in Retail Industry & How to Overcome Them Source: glambassador.co

The retail industry is constantly changing and there are always new challenges faced by the players in this competitive industry. Since 2017, there have been several major retail companies that have filed for bankruptcy. And this year, after COVID-19, more and more retailers have closed their businesses.

However, not all retailers are experiencing the same adversity amid this global pandemic. When some retailers are experiencing a decline in their revenues, some are gaining profits.  Those that sell masks and medical supplies, staples,and furniture (especially during lockdowns) are getting the spotlight. 

When the quarantine ended and shopping centers have reopened, retailers should be ready to face new challenges . Here are some of the major challenges facing the retail industry today and ways for dealing with them, which we’ve summarized from various well-known business articles.

1. Undergo the New Normal Protocol to Prevent Covid-19 Transmission

Consumers have started shopping at the mall. Isn’t this good news for all retailers? However, have your store followed new normal protocols properly? Here are a few things you must include in your new normal procedure list:

  • Limit the number of customers in the store
  • Ensure customers are keeping a distance from other customers
  • Ensure your staff and customers are always wearing masks
  • Maintain the hygiene of your products
  • Provide hand sanitizers and measure the body temperature of customers entering your store
  • Implement cashless payment to avoid the spread of the virus

2. Keeping up with ever-changing customer expectations

Customer preferences will always change, sometimes even faster than you can imagine. You must be able to keep up with consumer demand. Apart from seasons and trends, several other factors such as economic circumstances, advertisements, and competition in the retail industry have huge impact on consumer demand as well. Therefore, pay attention to these factors to help you get accurate forecasts.

3. Maintaining customer loyalty

Good customer experience is a key factor in creating brand loyalty. One of the common mistakes made by retailers is let their existing customers go and think they can easily replace them. If you keep this mindset, you will find it hard to sustain your business growth.

While promotions and special offers are still the mainstay of the retailers to retain their customers, the real key to an amazing customer experience is personalization. In order to keep your customers loyal, you need to use a personal approach, for example by sending them mails that have been adjusted to their preferences and needs. A CRM system can help you maintain your customers’ details and send personalized mails more easily.

4. Managing internal communication

Retail has complex operations and managing its internal communication is not an easy task. This challenge is mainly faced by large-scale retail companies with multiple divisions. Inefficient communication between divisions can disrupt the business processes.

Retailers should opt for a system that can streamline their internal communication. An ERP system can be the perfect solution for managing internal communication within retail companies. The software is able to centralize all of the business operations, generate real-time and comprehensive reports from each division, automate the task distribution across divisions, and ensure the entire process run properly.

Also read: 7 Common Mistakes That Can Ruin Your Retail Business

5. Retaining and engaging employees

Retail is one of the industries with the highest employee turnover rates. Retaining staff is one of the toughest challenges in the industry. Meanwhile, replacing employees requires a lot of energy and costs.

The solution to this challenge is to increase employee engagement within your company. Provide regular training to optimize their competencies. To make it easier for you to cultivate and maximize their potential, consider utilizing the help of automated solutions such as an HR management system or a competency management system.

6. A high-stakes global game of digital disruption

Consumer behavior changes very quickly. Now with the growth of eCommerce, consumers have plenty of choices before making a purchase decision. Although eCommerce has a dramatic impact on consumer behavior, but reports show that consumers still love to make purchases for most products in-store. They usually go to the internet to search for product information and compare the price, but would still buy it offline.

The phenomenon of eCommerce growth shouldn’t be considered a threat, but an opportunity. Retailers can merge online and offline businesses. Deloitte reported that 56% of in-store retailers involve a digital website and web-influenced physical store sales are about 5X online sales. An omnichannel marketing strategy can help retailers reach wider audience for their brands.

7. Finding the best technology solutions for the retail industry

There are many technologies developed for various businesses that offer various prices and benefits. Retailers have been looking for the best automated solutions to simplify their business processes, yet their choices often fall on the wrong software, either they’re difficult to use or don’t really have abilities to overcome retail challenges.

We recommend that you choose a system that’s specifically created for the retail industry to help you automate all your retail operations, from managing inventory and sales to managing prospects and customers. In addition to easy-to-use, the software should also provide ease of integration with other systems, such as barcode scanners and POS. Most importantly, you need to understand your requirements very well to help you control your budget wisely and find the right software faster.

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