Retail is one of the most highly competitive sectors in the business world* – it’s a tough environment,  with constant industry changes. Retail trends show that every year increasing numbers of retailers shut their doors for the last time**, impacting hundreds of stores and thousands of employees. Success in retail certainly doesn’t come easy.

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What is the difference, then, between those that fail, and those that survive and thrive? In our work around the world with thousands of successful retailers. we have identified ten common themes that link those who are succeeding. They’ve cracked the efficiency code and are beating their competition, winning customers and making profit. In this series of two articles, we share our observations and learnings about retail innovation, competitive strategies and how successful retailers are staying ahead.

  • Adopt a customer-centric approach – One of the reasons that retail is so competitive is the sheer power that rests with shoppers. They have become ever more demanding about what they want: service, price, choice, convenience, omnichannel retail, frictionless checkout – and if they’re not satisfied, they simply go elsewhere. So the first common feature we see in successful retailers is their customer-centricity. They put customer requirements at the heart of store operations – whether that’s merchandise, functionality online store functionality, omnichannel retail transactions, returns policy, payment options, in-store service, or tailored loyalty programs. Customers feel heard, known, understood and valued – which keeps them coming back to spend.

  • Make decisions based on data – In retail store operations, there is no room for second guessing – successful retailers base their decisions on data. They harness the wealth of information in their retail POS software and  use data analytics to uncover exactly what is going on in their business. With the right data at their fingertips, they can understand customer behaviours, see what items are selling where, and what is being returned; get a picture of inventory levels and movements; monitor staff performance, and manage their financials. Data enables successful retailers to manage with efficiency – continuing to do the things that are working well, and changing the things that require improvement.

  • Omnichannel Retail strategy – Customers do not want to shop online OR in-store – they want to do both, in a seamless shopping experience. They expect online and offline integration, so that they can, for example, order items online and pick them up in the store or buy goods online but use the store for returns. They expect to be able to spend loyalty points they earned online when they’re shopping in the store, and vice versa. Successful retailers understand this, and have developed competitive strategies based on robust omnichannel retail processes that allow customers to shop exactly as they want to.

  • Have a good supply chain management – If retailers are going to focus on customers, and enable omnichannel retail, then efficiency in managing their supply chain is essential. Successful retailers have strong inventory management – they have the right stock levels of each product, and they have a clear view of key metrics such as stock turnover. They can see all of their inventory in a single system, whether it is in the store, in a distribution centre or warehouse, or in the returns processing system. These competitive strategies help them to avoid the stock-outs that reduce sales, and having excess stock, which ties up cash and may mean having to reduce price and profit.

  • Hire a good team and invest in them – Retail is a service business, and as such can only be successful with high quality personnel – staff who have the skills and resources to do their job, and who are excited be being on the frontline of customer experience. Recruitment and retention can be difficult in retail, but training and retail technology tools are competitive strategies that are proven help to attract high calibre people and ensure they stay+. Successful retailers invest in training, and in tools such as mobile point of sale system to drive efficiency and help staff provide the highest level of service in the store. This approach has a double benefit when it comes to retail success – it not only creates more engaged and motivated staff, but also gives customers an enhanced experience.

    So that’s the first five of the ten competitive strategies for retail success.  You can read on next month in part 2.

What role do staff play in retail success?

Retail staff have a direct impact on sales and profit. Research shows that when staff are engaged and motivated, there are two direct impacts – the first is that the staff will deliver a better customer experience, and the second is that they are more likely to cross sell and upsell. A better experience means customers return more often to the store, and cross sell/upsell activity increases the average transaction size with every visit.

What are ‘frictionless’ processes?

Friction is when a customer feels when they can’t shop as easily as they would like to, and believe they should be able to. It’s relative – for example, before contactless payments, inserting a credit card would not have been seen as friction. But nowadays it is. Or if all websites made shoppers set up an account to check out, that wouldn’t be seen as friction – but if your competitors don’t do this, and you do, then you are seen as creating friction. And shoppers hate friction. The message is that you have to be constantly aware of changes in technology and processes, to ensure that your shopping experience isn’t seen as adding friction.

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