There are always new challenges facing businesses as the retail industry rapidly changes due to technological evolution. Several major retail companies have filed for bankruptcy since 2017, and this trend will likely continue until the end of this year and into the next. This is a wake-up call for retailers but doesn’t spell doom for retail stores.
There has been a frightening number of bankruptcies, but major retailers have survived and flourished in this volatile industry. Their success has been due to their ability to adapt to the rapid changes in the market. As a retailer, you should know what major challenges you’re facing as your company heads into the approaching new year.
1. Digital disruption
Consumer behavior is changing rapidly, and this is large because of the explosive growth of e-commerce. Customers have many choices at their fingertips before they commit to a purchase decision. A huge share of purchases are now made online, but studies show that consumers prefer to buy things in person at brick-and-mortar shops. It’s common for customers to research products online only to purchase in person. Therefore, you should see this as an opportunity rather than a sign of doom. It’s relatively easy to expand your business into an online platform.
2. Finding technology solutions
Business owners have endless options for technology platforms that can streamline and help scale up their businesses. Most retailers look for software to improve their processes but often make misguided choices. Business owners need to understand exactly what the software offers and whether it fits the needs of their business model. A complex and unwieldy software platform can increase costs and throw discord into a company functioning passably without it. For best results, look for software specifically designed for retail businesses.
3. Maintaining your customer base
Brand loyalty has become more prevalent because customers have many more options. It is a common mistake to make a sale without trying to attract repeat business from the customer. In today’s business environment, this is often a path to failure. Traditional customer loyalty programs such as special offers and promotions are still effective, but there is now a growing personalization trend. Maintaining communication with customers to keep them loyal to your brand is important.
It’s also helpful to remember that most customers have a career where they’re required to provide service to people, so they know what it’s like on your side of the counter and expect that from your company. You can get to know your customers based on their previous purchases, and your staff can engage them in conversation to get a better sense of who they are individual. This information can be derived from database research if you run a large organization.
4. Evolving customer expectations
What customers want and expect can change faster than you imagine. Retailers must be aware of seasonal trends and sudden changes in customer shopping behaviors. A few seasonal changes to your product lineup are usually all it takes to keep your store on track. The most effective way to approach this problem is always striving for innovation.
5. Modern marketing
Because of the rapid changes in digital marketing, modern businesses need to reach out to potential customers via several different channels. Multi-channel marketing must encompass several methods, including email, social media, and traditional paid ads. Customers are becoming more used to one-on-one engagement that develops a more personal relationship to build trust.
It’s important not to compartmentalize customer data. This can happen if the different parts of the marketing department are not synchronized effectively. It’s ineffective if customers are bombarded with unnecessary messages due to inefficient organizational communication. In this scenario, efforts to engage customers can backfire, causing them to seek out competitors. With the right technology solutions, marketing departments can avoid these blunders.
6. Inspiring and retaining employees
Retail has historically had a high employee turnover rate, which is still the case today. A retail store’s greatest challenge is keeping a core of long-term staff. These benefits are decreased time and financial costs of hiring and training new employees, and loyal employees are also happier team members who perform better on the job.
One way to tackle this challenge is to increase employee engagement by providing periodic new training programs to maximize their potential. This process can be automated with a solution such as an HR management system.
7. Internal communications
As the retail market becomes more complex, organizations have more complex structures that require more sophisticated internal communication solutions. This task can be challenging, especially for medium-to-large organizations with several company departments. Needless to say, business processes become severely compromised when internal communications are inefficient.
Retailers have many options available to streamline their internal communication processes. The worst mistake is relying on out-of-date methods such as Yahoo Mail or Outlook. Today, many retail companies use enterprise resource planning (ERP) systems to improve and integrate company departments and business processes.
ERP systems can be the perfect way to solve internal communication problems and integrate business processes across multiple company departments more effectively. This software centralizes business communication and information handling. The platform can generate and share reports with other divisions and help automate task distribution among company departments.
8. Effective Retail Digital Marketing Strategy
The effective use of digital channels to drive leads, sales, and MRR are some of the primary digital transformation challenges the retail industry faces. Many retail companies have difficulty being efficient and effective and measuring the impact of their marketing channels, such as paid media, enterprise SEO, Local SEO, content strategy, or social media.
One of the primary challenges these companies have is their digital experience, website design, and brand presentation both online and in the market.
There are many new challenges faced by retailers heading into 2023. However, companies have sophisticated technologies that can enable a more personalized approach to engaging customers and help businesses adapt to rapid changes in the market. By fostering customer loyalty and a memorable buying experience, retailers can expect to thrive in the emerging business environment in the approaching new year.