3 Important Tips for Retail Business Success in 2019

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The New Year is almost here and retail businesses must look forward to getting it spot on, right from the word go. It is therefore important for retailers to rely on learnings from the past while strategizing for success in the new year. So let’s look at 3 important factors that will help retailers get it right in retail in 2019.

  • Striving for Seamless integration across the business: It is now or never for retailers, where ‘unified commerce’ is concerned. Shoppers are increasingly demanding seamless experiences across channels. Operating in silos will surely spell doom for retail businesses. On the other hand, integrating channels and business processes will provide dual benefits – single version of the truth, seamless flow of information. Data is key to delivering outstanding experiences to customer. Having the right information related to product and inventory across channels, and having a thorough knowledge of the customer while ensuring that multiple channels are well integrated in the business system will enable retail brands to deliver exceptional retail experiences to their customers.
  • Focusing on Lifetime value rather than transaction value: Retail brands should stop focusing on the value of the transaction, rather they should look at how much value a customer brings to the retail business throughout their lifetime. This approach will provide a more holistic insight while managing customer relationships. While using on a transaction value based approach will help retailers to increase the value of a single transaction, focusing on the lifetime value will allow retailers to design strategies that will be enable them to extract more value of the customer. Further, this approach will aid in customer retention and cementing brand loyalty while ensuring repeat business and creating brand advocates.
  • Staying abreast with technology advancements that could disrupt: Every new technology that made its headway into the retail industry has led to the disruption of the business, primarily in 2 ways; i) consumers adopted technology faster leading to changes in their shopping behavior and shopping journeys, ii) businesses who were early adopters used technology to enhance their processes and operations which made traditional methods obsolete. Some of the biggest game changers in recent times have been e-commerce, mobile commerce, omni-channel, virtual reality (VR) & augmented reality (AR), Internet of things (IoT), and Artificial Intelligence (AI) being the latest entrant. It is necessary for retail owners to equip their business with the right retail technology for futureproofing their investments.

Gearing up with the right attitude while aiming to work towards making their business better using the above tips will allow retailers to have a Happy New Year 2019.

Setting up a solid and foolproof retail business inventory management process

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While strong sales are the backbone of any retail business, its inventory management process can signify the difference between success and failure for the business. Inventory management can be generally perceived to be a balancing act between demand and supply rather than just a business operation. While retail as a business has been evolving over the last few decades due to the influence of technology and innovations, the processes involved in the retail business are also a part of this evolution. The inventory management process has witnessed the need for a significant upgrade, especially due to the advent of new channels of shopping leading towards omni-channel. However laying the groundwork for a successful inventory management strategy and process that matures along with the business is extremely important for the success and sustenance of the business. Below are the basic steps for setting up a solid inventory management process.

  1. Set the key performance indicators (KPIs).

Setting, using and sticking to KPIs to manage inventory can be one of the best methods with regards to to measuring the impact of overall business operations. Every business and therefore their set of KPIs are different, but there are a few common ones that retailers must look at:

Gross Margin Return on Investment (GMROI): This analyzes the firm’s ability to turn inventory into cash above the cost of the inventory. It is an inventory profitability evaluation ratio, calculated by dividing the gross margin by the average inventory cost.

Gross Margin Return on Footage (GMROF): This is an important KPI that measures the inventory productivity that expresses the relationship between the business’ gross margin, and the area allotted to the inventory. This is critical, especially when stocking inventory at the store for selling.

Average Days to Sell Inventory (DSI): This is a measure of the time period taken by the retail company to convert inventory into sales, and this metric varies by industry. An important point to remember while using this measurement is that large-ticket items typically move slower than small-ticket items. The formula for calculating DSI is (Inventory/Cost of Sales) x 365, according to Investopedia.

Stock-Outs: This KPI represents the number of times a demand cannot be fulfilled due to the unavailability of the required inventory. This helps in obtaining a big-picture view of the effectiveness of the business in purchasing and production.

Rate of Return: This monitors and rates the percentage of orders that are returned and therefore need to be restocked. Tracking the reason for returns while monitoring this KPI is important to identify and address any trends in problems in the supply chain and thus mitigate risks of costly returns.

  1. Specify the W’s.

Efficient product organization aids a smooth inventory management process and can help in other processes such as picking, packing and shipping products accurately and quickly. At the basic level inventory organization begins with where and what – for achieving profitability, optimizing costs and offering superior customer experiences – that is the ‘why’.

Where: Evaluating the storage space available and creating zones, including number of doors/docks, recording their size and location, and non-inventory storage space; within these zones, determining sections, labelling each zone section clearly for employees to see and easily navigate.

What:  Accurately labelling each product to avoid confusion and time in finding what customers ordered.

  1. Choose the right software.

As the business grows, it is necessary to have an inventory management system that scales with it. Inventory management becomes more complicated with each new product the business sells and every new customer who buys it. Thus it is important to employ the right inventory management software (IMS) to help streamline multiple processes with a single program.

In order to find the right inventory management solution, it is crucial to define the pain points that need to be solved. These pain points may include overstocking/understocking, incorrect inventory levels or sales reporting, handling omni-channel inventory. Determining these needs will help in identifying the features each solution offers and how they will address the needs. Next is to evaluate the level of customization and compatibility with other systems, especially those that are currently being used or are going to be implemented within the business. Assessing the customer service capabilities (e.g., 24/7 service, dedicated representative) of the solution providers is a must as it can make a big difference when there is a need additional support.

  1. Check and monitor.

Frequent and organized check-ins will help streamline all aspects of inventory optimization together. Considering cycle counting programs in order to gauge the accuracy of inventory levels through routine audits can help in understanding the product sell-through rates, which can then be used to liquidate products that aren’t moving in order to optimize costs and storage space. It will also enable the retailer to introduce new products into the mix that share similar characteristics with the biggest sellers. Finally, keeping an eye on the product quality and any discrepancies in size, color or style can help increase customer satisfaction and lead to lower return rates.

Continued evaluation is key for enhancing the inventory management process. Having a well-run process in place — from inventory organization to implement the software to data capture and then review and analysis – can ably support the growing business by adding efficiencies to shipping processes, reducing fulfillment timeframes, lowering rate of returns and enhancing customer satisfaction while strengthening the bottom line.

3 essential ways to make the checkout experience better

Retail is generally an emotion-driven industry. In order to keep customers happy and loyal, retailers need to consistently promote positive emotion and reduce negative emotion at each and every touch-point in the customer’s shopping journey. Over the last few years, there has been a rise in investment and innovation, with efforts to improve nearly every aspect of the retail shopping journey. One of the most important and critical aspects of the overall shopping experience has been the checkout and even today many retailers are losing out on sales due to a poor checkout experience.

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Here are 3 tips on how to make the check-out experience better

Strike the right balance between data collection and checkout time
The point of sale is a great location and resource for data collection. However, while asking customers for details, too many questions can be a let-down, time consuming and will adversely affect the checkout experience. Having said that, retailers’ must not limit their insight potential at this important touch point in order to keep the line moving. Hence the right balance needs to be struck whereby there is no compromise on both fronts. Data collection and seamless checkout need not be mutually exclusive. Allowing customers to initiate the checkout process for a particular product on the retail brand’s mobile app when they get in line, or even when they enter the store, is one surefire technique that will improve the experience. Another good technique is allowing customers to finish their shopping and seeking their details at a later stage through digital mediums at their own convenience.

Use mobile POS to bust the queues
Another highly successful technique to improve the checkout experience at the store is using mobile POS (point-of-sale). A number of retailers have already used and reaped the benefits of mobile POS. The mobile POS is a powerful tool that will allow to drastically reduce the time per customer by scanning the products while the customer shops followed by billing, thus avoiding the need for customers to even enter the queue in cases where the payment mode is not cash. Thus retailers experiencing a higher number of footfalls at the store and more turnover or looking to handle large queues, especially during peak hours and shopping seasons, the mobile POS system is a definite savior. Also, mobile POS can be used as a tool to capture customer data on the go, consequently reducing wait times while billing. This will certainly improve the checkout experience at the store and prevent ‘lost sale’ situations.

Enable omni-channel integration for seamless operations
Focusing only on the store checkout experience in this day and age is just not enough. The checkout experience has to be seamless, convenient and fast, no matter which channel the customer decides to purchase from. And this can be achieved with the right omni-channel integration of previously disparate systems and processes. Having a truly omni-channel driven retail business will facilitate the seamless transfer of data regarding customers, products, inventory and so on, between the various systems including the point of sale system at the store. This enables auto population of customer data during thus negating the need to capture data during repeat purchases, or allows access to uniform product information such as pricing and availability across channels. Thus the customer can shop from wherever they want to, whenever they want to, quickly and seamlessly.

With the help of the right technology – a combination of both hardware and software, retailers can improve their business processes while creating better and seamless experiences at the time of checkout.

5 learnings for retail businesses from the SpaceX Falcon Heavy rocket launch

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US entrepreneur and CEO of SpaceX, Elon Musk has successfully launched his new rocket, the Falcon Heavy, into space from the Kennedy Space Center in Florida and set the Tesla Roadster car into space. This would go into the history books as one of the biggest and most influential achievements by man.

From the same pad where NASA launched rockets that carried astronauts to the moon, a big, new American rocket called the Falcon Heavy, built by SpaceX, the company founded and run by the billionaire entrepreneur Elon Musk was launched successfully into space.

5 important learnings for retail and other businesses from this epic happening:

Think different

The Falcon Heavy is capable of lifting 140,000 pounds to low-Earth orbit, more than any other rocket today. Because the boosters are to be recovered to fly again, a Falcon Heavy launch costs not much more than one by the company’s existing rocket, Mr. Musk said.  SpaceX’s Falcon Heavy is estimated to cost $90m per launch; Nasa’s planned SLS rocket, a comparable system, is expected to cost about $1bn per flight.

Retail businesses must look to be different than their peers and be able to create experiences that are different, not only from their competitors but also different for every customer, making it more personalized and customized for them.

Take risks and be ready for failure

Mr. Musk estimated that his company had spent more than half a billion dollars on Falcon Heavy and said that the program was almost canceled three times. It was billed as a risky test flight in advance of the lift-off.  As the SpaceX CEO said the challenges of developing the new rocket meant the chances of a successful first outing might be only 50-50.

Retailers should not shy away from the risks that can manifest themselves while considering important technological transformations such as omni-channel, mobility and so on. They should be ready for that risk and be prepared for failures and then learn from these.

Strive for being better

Since 2010, SpaceX has been sending the smaller Falcon 9 rocket into orbit, deploying satellites and carrying cargo to crews aboard the International Space Station. The company has disrupted the global launch business with its lower prices and reusable boosters. However, taking the disruption further, the success gives SpaceX momentum to begin developing even larger rockets.

Retail businesses must look at trying to get better and not be contented with a business that works fine. They should constantly endeavor to enhance their businesses progressively to succeed in the long run.

Dream big and look towards the future

The successful launch of the Falcon Heavy into space seems to be the step in the right direction to fulfill Mr. Musk’s dream of sending people to Mars.

Retailers should always have the future in mind while doing business and setting goals that may seem to be big and unattainable. With that said, every effort to achieve these goals set in the future will help the retail businesses to proceed ahead.

Inspire with action

The success of launch of the Falcon Heavy is not the only historic achievement. This launch was historic in multiple other ways. For the first time ever, a pair of recycled boosters helped send a heavy payload to space. Only eight minutes later, those same two Falcon 9 side boosters returned and landed simultaneously at adjacent landing pads. This near flawless success is a major step toward cheaper, more frequent spaceflight, making it easier for governments and businesses to lift massive projects into space or set off on deep space missions.

Retail business owners must look to become leaders and pioneers in the industry and thus become a benchmark for other businesses not restricted to retail. This will help them achieve that status and stature which will be an example for others to egg and imbibe.

7 Trends shaping Asia’s future retail landscape

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1. Foreign retailers focusing on core Asian markets

With the likes of China, India and other large Asian countries poised to have a large consumer base in the coming years thus creating a higher demand for international retail brands. This scenario is prompting big-name retailers to focus on capturing revenue from core Asian markets.

2. Big players emphasizing on Southeast Asian markets

As barriers to entry are erected in some of the larger Asian markets, Southeast Asian countries in-turn are seemingly converting into new playgrounds for big-name retailers.  Countries like Indonesia, which is seeing a strong population growth and a rise in the income, and Vietnam, a country which is relatively FDI-friendly, are favoring big retail players to enter these markets.

3. The line between online-offline channels are blurring

As omni-channel retailing is the new rule in the retail playbook enabling retailers to transform their business and add features such as click-and-collect, endless aisles. Further, driving engagement using retail touch-points is becoming popular favoring the connected consumers’ sentiments and preferences of swift and simplified shopping.

4. Deeper penetration

From time-to time brands are announcing the grand openings of more and more stores and outlets in Asian markets. As in China, flagship stores are popping up in tier three and tier four cities, going beyond tier one and tier two cities, other regions will also witness a similar trend in the future.

5. Discount retailing

Although the discount retail channel is not as strong as it is in Western Europe, the trend is catching on in Asian countries such as China, India and so on where discount retailing is becoming popular online and Japan in the form of 100 Yen stores.

6. Equipping for m-commerce and s-commerce

Global e-Commerce growth is going to be driven by Asian retail markets, which are equipping themselves for m-commerce and emerging forms of social media commerce. As consumers in the Asian market are heavy mobile users and active on multiple social media channels on a daily basis, retailers adding m-commerce and s-commerce capabilities will favor these consumers.

7. Importance of local shopping cultures to retail markets

As foreign retail players are looking to expand their brands and businesses into Asian markets, they will need to imbibe the local flavor of the domestic retail markets and adhere to their respective shopping cultures as these will prevail over the coming years. As such retailers entered into countries like China (the likes of Starbucks) have opened outlets that feature local tastes and preferences.

Black Friday and Cyber Monday 2017 – key takeaways

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As the Black Friday weekend came to a steady close, the Black Friday and Cyber Monday sales statistics are now in the books and with that data in hand, it is time to dissect it, dive deeper into various aspects of it, analyse it, and make note of the inferences and learnings to be used for the future.

To begin with, it was reported that American consumers spent over US $19 billion online over the five-day period from Thanksgiving through Cyber Monday in 2017. This was a 15 percent rise in spends as compared to spends done during the same time-frame last year.

Moving on, more than 64 million Americans used both online and physical stores to carry out their purchases from Thanksgiving Day through Cyber Monday. Consumers who shopped at both online and brick-and-mortar stores spent US $82 more on an average than online-only shoppers, and US $49 more on an average than brick-and-mortar stores-only shoppers. Black Friday 2017 seemed to be the most popular day for brick-and-mortar retail stores with more than 70 million shoppers, followed by Small Business Saturday (Nov. 25, 2017) with about 55 million shoppers.

One of the most important takeaways for retail businesses basis the above statistics is both offline and online retail channels were used by consumers to shop. In fact, consumers who used more than one channel to shop spent higher on an average than those who used only a single channel.

Mobile shopping or m-commerce has developed in to a popular channel for consumers to discover and buy products. And this popularity reached new levels this year as mobile purchases surpassed those on desktop throughout the entire Black Friday weekend. Mobile sales accounted for more than 60% of orders overall, an increase of 10% over the last year. Thus, retailers across the globe need to definitely harness this channel to boost their sales in the future.

With online, offline and mobile – 3 important channels at play significantly in this year’s Black Friday and Cyber Monday shopping event, a very important learning for retailers is that omni-channel retail can help them maximize their sales.

Another important aspect of this year’s Black Friday shopping event was that, though dominated by U.S., other countries across the globe also noted a significant spike in their sales on the same day. Reports state that countries like South Africa, Spain and the United Kingdom saw over 3 times as many orders on Black Friday, whereas Germany, Canada and France witnessed over 2 times the orders. Other countries like Ireland, Singapore and China also noticed a bump in the number of orders on Black Friday 2017. Thus Black Friday is becoming a global phenomenon soon. For retail businesses across the globe, this translates into an opportunity to attract more customers and drive higher sales.

Retail brands looking to strike big in the near future must pay heed to these key takeaways and use the right combination of people, processes and technology to succeed.

Build long-lasting relationships with your customers

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Traditionally, shopping as an activity was highly transactional, but today it is an exciting journey. Earlier, shopping seemed to be simple and straightforward. But today, it has gotten complex because every step in the journey involves multiple touchpoints available for retailers and customers to interact. However, from an optimist’s point of view, there is an opportunity for retailers to capitalize on this complexity.

Being at the epicenter of the retail business, every retail owner is trying to woo the customers in order to grab their maximum span of attention and maximum share of wallet. Customer experience has therefore become the ultimate battleground for retailers to compete. To be better than the other, retailers are trying all sort of tactics to be able to deliver the best customer experience to win and sustain them. And while many retail companies are in this rat race to strike big with their customers, only a handful are getting it right.

The reason for such a circumstance is obvious and yet highly overlooked. Simply put, the main cause for retailers failing to get their customers to stick is that they haven’t taken efforts to get the basics right. Fundamentally, it is the relationship that the retail brand shares with its customers. The stronger the foundation, the longer the relationship will last. Customers prefer to do business with brands that they can relate with and retailers therefore, need to build long-lasting relationships with their customers.

Being constantly connected with their customer is one way a retail business can help in fortifying the relationship. Staying connected effectively means that the brand needs to be available and ready to fulfil the customers’ needs be it for a product or for information, whenever and wherever the customer wants it. By seamlessly integrating together the various touchpoints a consumer might use to engage, retail owners can leverage and optimize the data from these engagements to plan and design a strategy that is most likely to resonate with that particular shopper.

Another surefire technique to strike the right chord with customers is personalization. Basically, it is the ability of a retail company to know their customer by name and also be able to approach them with a personalized set of communication. This will allow the brand to strengthen their customer relationship by demonstrating that they “know” the shopper’s preferences well. Personalization can ensure cementing the consumer’s loyalty in the retail business thus sustaining their confidence in the brand, making it a preferred choice.

Being connected to the customer will enable retail brands to understand their customer and deliver personalized offerings. This combination allows retailers to not only extend exceptional customer experience, but also it is a must to forge and fortify brand-customer relationships to ensure that their customers continue to stick to the brand.