“Data is the new oil. It's what runs the engine of modern retail," said Jeff Bezos, founder of Amazon. This statement by one of the most influential retail industry leaders perfectly summarizes the ever-changing retail landscape driven by data and technology.
There is a significant surge in the use of
Retail Software Solutions by businesses in the retail industry to simplify operations, enhance sales & revenue, optimize efficiency, and make data-driven decisions.
However, most retail companies still struggle to run a profitable business due to the lack of the best retail IT solutions within the organization. Let's dive further into this blog and learn more about the common challenges in running a profitable retail business and how to overcome them by implementing retail technology solutions.
Most-experienced challenges to running a profitable retail business
Running a profitable retail business is intricate, involving personalized shopping experiences, implementing an e-commerce platform, streamlining operations, managing finances, handling employees, and embracing new strategies to thrive in this competitive business landscape.
Most retail businesses struggle to keep up with industry trends, leading to failures due to the challenges outlined below:
1. Inventory Management
According to research, 46% of retailers cite inaccurate inventory levels as a major challenge (Source: Capgemini). Managing inventory in the retail business, from a small grocery store to quite-a-big hypermarket, is intricate and pose significant challenges such as;
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Lost sales due to stockouts
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Inventory overheads leading to increased budgets
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Additional costs for carrying inventory
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Store inefficiencies
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Unsold products and wastage
2. Create a personalized shopping experience
A report from
McKinsey & Company found that 71% of customers expect enterprises to deliver personalized experiences, and 76% of customers get frustrated when that expectation isn't met.
While promotions and discounts remain essential for customer retention, personalization is key to enhancing customer experiences. Most customers don’t just want personalized experiences anymore, but they demand it, and most retailers fail to fulfill the same. Generic experiences pose significant challenges such as;
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Lost sales due to irrelevant and generic recommendations
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Missed upsell opportunities
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Unfair one-size-fits-all pricing
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Frustrated customers and damaged brand reputation
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Wasted marketing spend
3. Customer leads & loyalty
The business you can generate from loyal customers is immense. In fact, the recent study states that only a 5% increase in customer retention can improve the business profit by 25-95% (source: Forbes). However, for most retailers generating qualified leads and retaining customers is a massive challenge. Ineffective customer lead generation and loyalty strategies can create some critical challenges like;
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Lost sales due to ineffective marketing channels
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Missed revenue and growth potential
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Reduced sales and customer lifetime value
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Higher customer acquisition costs
4. Store Management
Store management is one of the most critical aspects of running a profitable retail business and according to a recent digital transformation report, 28% of retailers struggle with inefficient store operations (Source: Capgemini).
Inefficient store management poses extreme challenges for the retailers like;
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Manual and time-consuming processes with errors and inaccuracies
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Long customer wait times
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Inefficient checkout processes and disorganized product displays
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Dissatisfied employees with workloads and communication gap
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Lost sales due to stockouts and inefficiency
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5. Embracing the best retail IT solution
Most businesses acclaim that implementing a
unified commerce platform can be transformative, increasing overall revenue. Factually, investing in the right retail IT solutions can have higher ROI – an average of 3X to 5X according to the annual report by
Aberdeen Group.
However, many retailers lack a unified commerce platform, still operate in silos, and face multiple challenges including;
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Time-consuming manual processes
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Inaccurate data in sales, inventory, and reporting
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Limited payment options and slow processes
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Increase in operational costs
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Reduced operational efficiency
Achieving retail excellence with Retail IT Solutions
Most retail businesses aim to deliver personalized shopping, satisfy customer needs, streamline operations, and improve sales when implementing a retail management system.
Yet, many retailers still wonder what a retail management system actually is. In simple terms, retail management software, a.k.a. retail management system (RMS), is a platform that integrates and automates day-to-day operations, such as procurement, maintaining inventory, leading out to customers, managing finances, handling employees, and much more.
Retail IT Solutions
So, it’s quite clear that you can simplify your day-to-day operations by implementing retail IT solutions. However, there are multiple solutions in retail solutions, and which one is ideal for your business?
Have detailed insights into the retail aspects covered in our retail IT solutions and help yourself choose the ideal solution for your unique needs and challenges.
Inventory Management Solutions
Inventory management is the process within a supply chain where stocks and goods are tracked as they move in and out of warehouses/stores. Implementing the ideal inventory management system can have multiple benefits and can help you with the following:
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Keep the accurate track of your inventory and stocks
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Help you avoid overstocking or stockouts
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Automate reorders to ensure the availability of most-sold products
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Minimize waste and inventory loss
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Make data-driven insights in forecasting, demands, and sales
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Reduce inventory management costs
Retail E-commerce Solutions
According to recent studies, channelizing your retail store online has a higher chance of growing and expanding the business. Increased opportunities for growing the consumer base online favor e-commerce solutions. Besides reaching beyond physical outlets, implementing e-commerce solutions in your retail business has multiple benefits, such as:
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Wider market reach
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24/7 accessibility and availability according to your customers’ convenience
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Personalized shopping experience with tailored recommendations
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An opportunity to grow without a significant infrastructure
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Data-driven decisions and streamlined sales operations
Point of Sale (POS) Solutions
A PoS software is a robust tool that simplifies transactional management and offers data-driven insights for your business transactions. An ideal PoS system can track transactions among multiple operations in your retail business, from inventory to post-sales support. Here are some critical benefits offered by an ideal PoS software:
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Expedite checkouts for the improved customer experience
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Gain customer buying behaviors for understanding preferences
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Sync sales and inventory for accurate stocking
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Make data-driven decisions for inventory management and targeted marketing strategies
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Employ multiple payment methods for users’ convenience
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Protect customer data and prevent frauds
Retail ERP Solutions
Retail
enterprise resources planning (ERP) is a software system that integrates your business-critical operations, such as inventory, sales, orders, deliveries, finances, and more, and streamlines them. A retail ERP helps retailers to automate and manage operations and achieve operational efficiency. Implementing a retail ERP system can help you with multiple aspects, such as;
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Streamline operations by simplifying workflows
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Centralize data from different departments for making data-driven decisions
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Improve operational efficiency by automating repetitive tasks
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Gain accurate insights by reducing manual errors
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Manage finances by tracking expenses, revenue, and profits in real-time
Retail CRM Solutions
A retail customer relationship management (CRM) system/software is a tool that keeps an accurate record of a retailer’s customers and leads. Including multiple features and functionalities, it offers a detailed insight into customers’ contacts, leads, prospects, and loyal consumers. Implementing an ideal retail CRM system can help you to;
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Enhance connections with your customers through personalized interactions
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Implement discounts, rewards, and loyalty programs
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Employ marketing strategies according to customer data
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Track sales performance
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Improve services and quality of your products by gathering Feeback from customers
Retail SCM Solutions
The Retail supply chain management (SCM) system helps retailers to manage and optimize their supply chains. It helps you gain accurate data analytics, algorithms, and insights in real-time. A retail supply chain management software can help your business to achieve excellence by;
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Tracking, monitoring, and managing goods from suppliers to customers
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Optimize inventory by reducing holding costs and managing stock levels
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Enhance communication and collaboration with the suppliers
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Forecast and mitigate risks in the supply chain
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Reduce costs by identifying cost-cutting opportunities and optimizing operations
Smart Retail Store Operations Solutions
Smart retail refers to integrating digital technologies and data-driven systems in a retail store. Multiple technologies and digital solutions, such as and not limited to IoT, PoS, QR codes, virtual shopping carts, and digital catalogs can be integrated and employed into the retail store to make smart retail stores. It helps the retailers to drive business growth by;
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Analyze customer flow for the ideal stock placement
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Implement AI-driven technologies to offer satisfied customer experience
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Provide tools and technologies that make employees’ tasks smoother and efficient
Retail OMS Solutions
Retail order management software (OMS) is a platform that aligns and manages sales, inventory, orders, and order fulfillment across multiple channels. By integrating and automating multiple tasks, it helps retailers, logistic partners, and consumers track their orders. It helps retailers optimize order fulfillment by:
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Automate order entries and fulfillment processes to streamline order processing
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Ensure order delivery accuracy
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Faster order fulfillment
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Improve customer satisfaction by tracking and showcasing expected order delivery time
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Reduce errors in order fulfillment
Operation & Employee Management Solutions
Retail operations and those who perform the tasks, employees/staff, are among the most critical aspects of your retail business. By implementing tools for improved communication and collaboration, you can drive operational efficiency and overall productivity. It helps retailers:
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Assign the tasks to respective employees and track their progress
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Create employee schedules that align with your business needs considering employee convenience and availability
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Monitor employee performance and improve productivity
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Offer smoother communication for the better collaboration among employees
Conclusion
To achieve retail excellence in 2024 requires tackling challenges and struggles most retailers face. Retail IT Solutions are some of the most proven and beneficial ways to do so. From inventory management to employee collaboration,
retail IT solutions drive profitability within your business. Implementing the right solutions enhances your operations, optimizes operations, and improves sales. If you are interested in optimizing your retail operations and driving growth, we offer the best retail IT solutions that help you achieve excellence and improve sales. Get in touch with our retail industry experts to know more.
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