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 phenomenon might continue through this year. Though it does seem kind of frightening, this is not the end of days for retail.
Although we have seen quite a lot of retail bankruptcies, but there are also many major retailers that have managed to survive and even grow their businesses. They have proven to be able to face major challenges within the industry. Then, what are the common challenges faced by them today? Here are six major challenges in the retail industry as well as the solutions that we summarize from a few preeminent business articles.
1. Keeping up with ever-changing customer expectations
Customer preferences will always change, sometimes even faster than you can imagine. As a retailer, you should be able to keep up with the seasonal trends as well as your customer shopping behavior. You don’t need to totally change your products in every season, you just need to add some different elements to your products in accordance with what is trending. In short, you must never forget to innovate!
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.