Retail news is overshadowed by details about businesses that didn’t effectively navigate the industry’s continuing evolution and couldn’t compete. Although these reports are valuable as cautionary tales, the other side of the story — retail success — often goes unreported. Be confident that the industry’s current environment isn’t contrary to success. You can prosper in the omnichannel, connected, digital age. Here are three secrets for retail success that managers know about operating profitable businesses today and laying the groundwork for continued success in the future.
A strategic customer loyalty program
Today’s retail managers know that loyal customers are a valuable commodity and a pathway to retail success. Countless studies have shown it’s more cost-effective to keep a customer than to invest resources into finding a new one. Furthermore, loyal customers often become brand ambassadors who influence their friends’ and family’s shopping decisions. A study by Fred Reichheld of Bain & Company found increasing customer retention by 5% can increase profits by more than 25%. Retail managers with businesses leading the competition in the digital age incorporate loyalty-building principles into every aspect of their businesses. They don’t equate “loyalty” with only a “loyalty rewards program.” Our research confirms the majority of global shoppers join loyalty rewards programs to benefit from discounts and free items, but it’s important to view your rewards program as part of an overall loyalty strategy that engages customers and builds long-term relationships. Show your loyal customers that you appreciate your business with VIP treatment, exclusive promotions, and personalized offers — as well as loyalty rewards.
For retail success, build a loyalty program that has your customers coming back again and again.
Streamlined inventory management
It’s time to change your perspective and stop viewing inventory management only as a cost center and view it as a main avenue to retail success. Granted, retail managers need accurate counts to keep items in stock and to balance your accounts, but today’s inventory management systems also give you capabilities to increase revenues and profits.
For example, iVend Retail’s 2018 Global Path to Purchase report found 66.3% of consumers will leave a store empty handed if the items they want aren’t in stock. If your inventory includes items that are available in different colors, styles, sizes or models, an advanced inventory management system will show you which items within that matrix must be in stock to avoid lost sales.
Inevitably, however, there will be times when a brick-and-mortar location will sell its last item of a certain color or model. A state-of-the-art system that enables single stock pool inventory management will let your sales associate locate that item and have it shipped to the customer or to the store for pickup, saving the sale. An added benefit of managing inventory via a single stock pool is a reduction in inventory costs. We see retailers decrease in safety stock by about 20%, which can mean a savings of up to 3% in overall inventory value.
An emphasis on customer experience
Another secret smart retail managers know about successful retail is that customer put their own convenience first. Technology has given rise to a customer-centric environment that includes Click & Collect/Buy Online Pickup In Store (BOPIS), shopping via mobile device, accessing coupons and promotions sent to their smartphones in-store, and using kiosks to access information, order, and checkout without assistance. Your customers will find the most convenient path to purchase. Engineer personalized, cross-channel experiences that lead them to making purchases from your business.
Leading retail managers are not only crafting the experiences their customers want today. They have their eye on the future, planning to meet customer expectations as technology continues to advance to enable capabilities such as:
- Voice-activated personal shopping assistants using virtual reality and artificial intelligence.
- Automatic payments that incorporate Internet of Things (IoT), RFID, and mobile wallet technology.
- Biometric ID for payments with facial recognition.
- Cryptocurrency or loyalty rewards management via blockchain technology.
Keys to Retail Success
Successful retail managers aren’t running their operations the way they did 10 or 15 years ago. They are responding with agility to trends in consumer behaviors, making data-based decisions to reduce costs, and automating processes to operate more efficiently. And the most successful retailers among them will adapt with continued change to continue to meet consumer expectations and build their loyalty.
How is your business faring in light of the ongoing retail evolution? Download advice on how to competitively position your business for retail success, now and in the future, in our Retailer’s Guide to Success Series:
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