Retail has been in the hotseat over the past few years due to the so-called “Retail Apocalypse.” In short, the rising popularity of ecommerce has created an uphill battle for physical retailers needing to adapt to new shopping preferences and customer expectations. But this is just one challenge faced by retailers today.
Here are five other common retail pain points, and how to address them.
Management and Staffing
The employees can really make all the difference when it comes to retail performance at every level — executives, managers, associates and more.
Hiring the wrong managers is going to lead to them potentially hiring the wrong floor employees. Having the wrong personnel in place can bring things to a grinding halt for any business, but especially one where customer service can play such a significant role. In fact, it can be argued that in today’s world of excess and access, the service received is often more essential than products themselves.
Retailers can’t be successful if they don’t have the right people making decisions and performing services. This issue needs to be addressed by company leaders. It’s imperative to hire the best people to manage retail locations. Without a good fit in place with management, nothing else can run correctly.
Scaling up can be a problem for retailers on a few different fronts. The most obvious way scalability can be a pain point in retail is simply a matter of supply and demand. It’s hard for retailers to know how much product they need at a given time. It can also be tough to know when to expand operations in an industry that tends to run on notoriously low margins.
The scalability issue can also come into play in a big way for seasonal businesses. It’s tough for companies that only operate part of the year to gear up and then shut down. Starting and stopping like this takes time and resources. Additionally, it’s not easy to cut off cashflow from a business for a substantial part of the year. This can make things a lot less predictable if there’s an off season for whatever reason.
Using data analytics is one way retailers can do a better job of scaling up and down. Getting precise readouts of exactly what’s going on from year to year and month to month can allow retailers to formulate better strategies, said Lisa N. from Mimy.
Failure to Capitalize on Data Analytics
Going off the last point, subpar data analytics is generally just a problem for many retailers—especially those that have resisted digitization. There are endless insights couched in data. Retailers need to mine them in order to optimize performance and distinguish their business from all the others out there.
Retailers stand to benefit from an analytics platform that is built to encourage self-service. Most people working in a retail location or office probably aren’t going to have a data-specific background. But the people working in a particular store are always in a unique position to know exactly what that location needs to succeed.
Analytics providers such as ThoughtSpot are well-suited for retail analytics because they provide a wide variety of users with high-quality self-service tools — meaning anyone can query data at the drop of a hat to better understand performance and make prudent choices.
Access to instant, interactive data visualizations can help employees drive better business outcomes related to ecommerce performance, branding and merchandising, managing inventory and optimizing product pricing — just to name a few.
Understanding Laws and Taxes
No two places go by the exact same law. When you cross over international—or even state—lines, you might be dealing with completely different legal and tax codes. Of course, retailers need to be knowledgeable about the laws and tax regulations in all places where they do business—including ecommerce. No organization wants to be caught on the wrong side of the law, even if it’s completely on accident.
It’s important for retailers to gain a though understanding of laws and taxes before opening up shop. These numbers are absolutely crucial for projecting revenue and earnings estimates. A business can’t—and shouldn’t—be functional without these things. Hiring the right lawyers and accountants is the best way for retailers to ensure they stay within bound when it comes to laws and taxes.
Cybersecurity and Tech Issues
Retail needs to be up to date when it comes to cybersecurity and technology. This sometimes isn’t as intuitive for retailers as those in other industries since retail isn’t necessarily technological by design. But it’s essential. Many retailers simply can’t afford an expensive and reputation-tarnishing security breach, which on average costs retailers $1.84 million.
Vulnerabilities can be fixed and avoided altogether by hiring the right IT employees or third-party firms. It can’t be underscored enough that no business is truly safe from online attacks. Retailers need to be aware of this, and act accordingly to protect sensitive customer information.
There are lots of issues facing the retail world today. But there are lots of positives as well. Retail as a whole is growing at a healthy rate. It’s important for business leaders in the retail world to identify these challenges and rise to them to the best of their abilities.