Every retailer in today’s competitive market has a common goal: They want to ensure that their customers have a great shopping experience while keeping an eye on their profit margins. With the growth of eCommerce platforms and the digital boom, smart business owners understand the value of keeping up with the curve. The key to outstanding results in the retail space is efficient retail store management.
To gain new customers and keep existing customers coming back for more, retailers in every industry need to ensure that their operations are as smooth as possible.
“Hot retailers come in all sizes and formats. 9 of the 10 top businesses represent different retail segments, indicating that growth owes more to management and strategy than any kind of tide lifting boats in any particular category.” – National Retail Federation STORES Magazine.
When customers are evaluating their shopping experience, they are looking at the 5Es:
The road to customer satisfaction lies in strong store management skills.
Retail store management includes the day-to-day management of the activities in a retail store, from customer service and staffing to inventory management and marketing. Retail managers must keep an eye on operations to retain happy, satisfied customers and maintain healthy profit margins.
There are many benefits to managing a retail store efficiently, which include:
This article covers ten essential tips for retail managers that explain how to manage a store successfully.
Every organization has a core set of repeatable processes. If they are well-documented and the staff is familiar with these processes, it can help a store run like a well-oiled machine.
According to David Janssen, CEO & Founder at VPNoverview, “When you create efficient operational processes and set clear expectations for essential regulations, it’s simple for retail employees to protect your company’s assets while also increasing customer experience. This begins with using a retail operations manual and the subsequent training of team members on how to follow the regulations.”
With adequately documented standard operating procedures, employees need to consult with their managers only when it is necessary. When day-to-day processes are running on auto-pilot, retail store managers have enough time to focus on business growth and development.
Retail managers often focus on cost control by managing their payrolls, maximizing their returns on inventory, and limiting unnecessary expenses. However, to expand their operations, prepare for seasonal peaks, and stay updated with the latest industry trends, retail shops also need to take advantage of a boost in working capital. Retail store funding offers tailored to the organization’s unique needs and goals can significantly improve their operations and returns.
They say that what can’t be measured can’t be improved. In the retail space, good data leads to great business decisions. This is why a key component of retail business management is keeping track of the store’s performance metrics. These may vary depending on the size and scope of the store, but usually includes:
Matthew Mundt, CEO of Hug Sleep, says, “This will give you a better idea of where your store stands, and you could also compare it with other times of the year, other stores if you are in multiple locations, and help you project your goals and communicate them with your team.”
With various automated systems and data analytics software, tracking performance is easy and cost-effective, paying dividends in the long run.
An easy way to catch a customer’s eye is using smart product placement. For example, when managing a retail store, employees should logically display their products in well-labeled sections so that customers can locate them quickly.
Another critical but often overlooked aspect is maintaining a clean environment in the retail space. Nothing turns customers off quicker than dirt and clutter.
Inventory management can be one of the more challenging aspects of running a retail store.
It starts with accurate demand forecasting because oversupply or undersupply of the inventory can significantly impact revenue. After that, managers also need to look at the flow of warehouse materials, rotation of products on the shelves, clearing old inventory, and regular process audits.
Automated and barcoded inventory management software has made it easier for managers to identify fast or slow-moving stock and recognize the differences in their online and brick-and-mortar shop fronts.
Even with effective inventory control, internal theft is an unforeseen factor that greatly impacts a retail organization’s bottom line. Studies show that it costs U.S. businesses up to $50 billion annually, with organizations reporting an average inventory shrink rate of 1.62%.
According to the same study, only 6% of retail theft losses are recovered. That is why, as of 2021, budgets for loss prevention (LP) efforts are expected to increase by 44.5%. Managers are updating their security systems and investing in surveillance and anti-theft devices to prevent internal theft and shoplifting.
A happy employee is a productive employee. A key role for today’s retail managers is keeping their employees satisfied and motivated to control staff turnover rates. High levels of attrition hurt a company’s bottom line. According to PeopleKeep, on average, it cost 6 to 9 months of the employee’s salary to find a replacement. Constant change can also damage morale among the remaining employees. Here are a few ways retail managers can boost employee satisfaction:
Many retailers offer sales incentives or a commission structure. A blended approach that rewards team and individual performance is an effective way to get results. For example, employees could earn a commission on their personal sales, but they would also enjoy a team bonus for meeting a monthly sales goal. Smaller rewards like gift cards or small treats can show employees that the organization cares about them and their growth.
“The biggest mistakes of retail managers occur when they forget to be leaders,” says leadership development trainer Dr. Peter Langton.
When retailers “walk the talk,” they can foster stronger relationships with their employees while showing their team members how things are done.
Successful managers maintain an open and transparent working environment and empower their employees with a robust feedback and grievance policy.
Teamwork makes the dream work, but a large part of this success is finding the right employees for the team. One of the most effective ways to reduce staff turnover is to hire the right people at the start. So, a solid interview and assessment process while vetting candidates can make all the difference in a retail environment. Here are some key points to keep in mind:
Eric Carrell, Marketing Advisor at SurfShark, says, “While relevant professional experience is vital, don’t overlook candidates' soft talents and personality attributes. When hiring new employees, I believe most businesses agree that culture fit is critical.”
Ensure that the candidates fit well with the company culture and co-workers, and then work on their skills.
Retail managers that give their staff the tools they need to succeed end up working with employees with good product knowledge and are more prepared to deal with customers. In addition, better execution of processes leads to growth, expansion, and profits in the long run.
“Utilizing technology to its greatest potential is the ace up your sleeve,” says Ethan Howell, Co-Owner of Florida Environmental.
Retail managers who use technology solutions to automate mundane activities spend more time on the things that matter - keeping their employees and customers satisfied.
Different retailers have different needs. For example, some businesses may upgrade their point-of-sale system, while others upgrade their online solutions and integrate their in-store products with an eCommerce platform. Investing in the right retail technology should resolve customer and staff pain points while making processes more efficient.
An essential part of retail management is revenue growth by retaining current customers and expanding the customer base. An excellent retail marketing and outreach plan can help achieve both goals.
Retailers use a variety of strategies to drive their bottom lines through customer engagement. These include:
Loyalty matters! Existing customers are 60-70% likely to purchase a product. In addition, a good loyalty program is likely to compel 70% of customers to recommend the product or service to others.
About 72% of people use Instagram to make purchase decisions. Leverage social media channels for product updates and sale announcements to keep customers coming back for more.
In the retail industry, change is the only constant.
“The ability to pivot and change with trends and tough times is essential for all retail managers. This was especially true after the pandemic. The difference between those stores that failed and those that succeeded were the managers that were able to think outside the box quickly and effectively.” says Liraz Birnbaum, Founder of Lula’s Garden.
Effective retail management brings forward-thinking and adaptability to the forefront. Managers should constantly look for trends, opportunities, and threats to protect themselves from changing tides. They may:
Market research provides them with a strong knowledge base for market decision-making in the future when keeping up with dynamic consumer trends and preferences.
Managing a retail store is an essential skill in today’s hyper-competitive landscape.
For those who want to know how to become a store manager that improves efficiency, boosts productivity, and builds customer loyalty - robust retail business management is the answer!
From structured processes, substantial working capital, performance tracking, and inventory management to boosting employee morale and stepping up their marketing strategies, these tips for retail managers are surefire ways to improve their game and profit margins!
Category: Management Advice