Retailstartups

Major Challenges in the Retail Industry & How to Overcome Them

Over the past year, the retail industry has had a particularly tough time. As the recent health crisis forced many stores to close down for long periods of time, it became even harder than normal for retail businesses to thrive. Luckily, this problem should shortly be behind us and retail businesses will be able to welcome in as many customers as they once did.

But the health crisis wasn’t the only challenge that the retail industry had to face. There were challenges before then and those challenges still exist. If you’re in the retail industry, you may be wondering how you can improve your business now that the health crisis is over and make it stronger than ever before. Below are some of the major challenges facing the retail industry and some suggestions on how to overcome them.

Major Challenges in the Retail Industry & How to Overcome Them

Competing with eCommerce Brands

The biggest challenge for retail stores has been, and will likely continue to be, competing with eCommerce brands. The reason so many people have abandoned shopping in person is that they can easily buy products online and have them shipped to their homes. ECommerce brands offer a level of convenience that is hard for retail stores to match. More people are choosing to shop online each year and that trend is likely to continue for a long time to come.

Solution: There are two possible solutions for retail stores looking to compete with eCommerce brands. The first is to add an eCommerce element to your store. If customers can purchase products from your store online, this will give them the same convenience as shopping at other eCommerce brands. By offering a multichannel buying experience, you can provide your customers with the best of both worlds. To do this, explore implementing an enterprise eCommerce platform. Look for one that can integrate with your existing store structure and allows you to track inventory across both locations.

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The other solution is to provide a better in-store experience. One of the reasons that some customers prefer to shop in person is due to the experience. When you shop online, you don’t have the opportunity to interact with sales staff or to physically see the product up close. Look for ways to improve your store experience, like providing free samples or finding ways to reduce line times.

Not Knowing Enough About Your Customers

One of the biggest benefits of running an eCommerce site is that it allows you to easily learn more about your customers. By tracking customer data on a website, you can learn important information such as how they found your website, which products are viewed the most, and which products have the highest customer satisfaction. With this information, eCommerce brands can make better strategic decisions, such as which products to promote or offer on sale. 

Solution: The solution for retail stores is to find a way to gather the same type of information. You can do this in a few ways, such as conducting surveys within your store, using WiFi tools to track which areas of your store receive the most traffic, or using Point of Sale equipment that records more details about sales.

Once you start gathering data about your retail customers, you then want a way to turn this data into actionable advice. For this, you’ll want to explore some business intelligence tools. Business intelligence tools turn your data into visualizations which can then help you make important decisions.

If you end up adding an eCommerce element to your retail store, remember to combine the information you gather from that site with the information you get in person. However, also analyze the information separately, as you may discover things like some products are more popular in person than they are online.

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Generating Return Customers

In addition to bringing in customers, many retail businesses have trouble bringing back previous customers. In terms of ROI, it’s typically much better to focus on bringing back old customers than it is generating a new one. However, the convenience of eCommerce brands is always looming, which means at any point a past customer may decide to choose an eCommerce brand rather than coming to your store again.

Solution: There are two things you can focus on to bring back more customers. The first is creating a better in-store experience. It is your in-store experience that separates you from eCommerce brands so it needs to stand out in customers’ minds. Look for ways to create a unique experience for your customers – something that they can’t get online. You can also look for small ways to tweak the in-person experience, such as making items easier to find in the store. If you’re not sure of where to start, ask your customers for some feedback as to what they’d like to see.

Another solution is to implement a loyalty program. Loyalty programs reward customers for returning to your business and if you do them right, could offer enough incentive to convince someone to come back. For example, you could reward customers with points for each purchase they make, then allow them to redeem these points for discounts. It’s a simple way to create brand loyalty and increase the number of return customers, all for a relatively small cost.

Having Happy Employees

Finally, having happy employees is sometimes a challenge for retail stores. Working retail isn’t always the most appreciated job and it can leave some employees feeling burnt out or unhappy with their jobs. To reduce employee turnover and provide a better experience for the customer, retail brands should focus on making their employees happier.

Solution: There are many ways you can go about improving things for your employees. Take some time to analyze their work environment and see if there are simple changes you can make. For example, maybe they could use a more comfortable break room or a more relaxed dress code. Talk to your employees and see what sort of changes they would like to see around the store.

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Second, try to implement programs that can maximize employee potential. For example, you can have more frequent training programs that provide additional skills to employees that they can use both in this job and future ones. If an employee feels like a job cares about their long-term future, they are more likely to be satisfied with that job. Look to promote from within whenever you can, as this rewards employee loyalty and hard work.

Finally, consider introducing some team-building events at work. Team building events are great for building camaraderie among your employees and can help them enjoy their work more. If people like their employees, they are more likely to enjoy the time they spend at work. There are plenty of team-building activities you can try, from having a small pizza party after closing to taking everyone out to an arcade, so look for something fun that can help your employees bond with one another.

Overcoming Retail Challenges

For every challenge that retail businesses face, there is a possible solution. The biggest thing you can do right now is work on improving your in-store experience, as this is the biggest separator between you and eCommerce businesses. Then, it’s just a matter of finding ways to take advantage of what retail stores have to offer over eCommerce brands and maximizing your potential. With the strategies above, you should be off to a good start and be able to grow your retail business despite recent challenges.

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