Expert Retail Strategy Consulting & Advisory
Common Challenges faced by retail brands and businesses
Intense Competition
Talking about competition in retail, eCommerce continues to be the talking point of the town. An extensive variety of products, a plethora of product variants, a multitude of brands and sellers under one roof (online marketplaces), and relatively attractive pricing are only the highlights. However, new retail players continue to emerge in more innovative versions. Retail has got bigger and wider as a part of its evolutionary process.
Customer Experience
Many factors render consistently providing quality customer experience challenging in retail. In retail, there is a big reliance on the collective force of a large number of customers. This requires coming up with CX solutions that echo with the largest possible majority of a customer base. Diversity and frequent alterations in customer needs and preferences make this a challenge.
Inventory Management
To begin with, it is never easy to accurately forecast demand. There are too many options available to customers. Besides, customer requirements also do not remain the same over two consecutive cycles. Retailers may choose to carry an extensive product mix but that only increases their woes with inventory management. Not having the right analytics and BPM solutions for the inventory management function only makes things worse.
Pricing Pressures
Offline retailers have to maintain pricing competitiveness against both online/dark stores and offline players. This often comes at the cost of maintaining low margins and depending on volume sales. Supply chain disruptions make this equation even more complicated for retailers. In the backdrop of ever-increasing options for customers, finding the right price point takes things to another level.
Omnichannel Integration
After years of working with legacy systems, it is not easy to integrate different channels seamlessly. It often turns out to be a resourceful exercise both in times of time and finances. Combining the information and inputs or the data silos across business functions, processes, and services and bringing them on the same page in an omnichannel system with a certain set of objectives is a complex task.
The right approach to deal with these challenges is to apply experience, expertise, and data analytics concerning both retail and eCommerce. This will help ensure that today’s problems are dealt with today’s solutions with due adherence to proven business and management fundamentals.
How YRC can help
Retail Strategy Consulting Services
Omnichannel Retail Strategy
Going omnichannel has become a necessity in both retail and eCommerce especially, for the brick-and-mortar retail businesses. Customers expect the flexibilities that come with omnichannel systems. It makes it easier for them to stay informed about offers and launches, find and buy products, return or raise complaints and a host of other things without having to bother about the channel.
We, at YRC, approach formulating omnichannel strategies not just from an enterprise perspective but also from the viewpoint of customers. Our service intent is to envision and develop a robust and strategic omnichannel framework aimed at working in the best ways for the client’s business including improved customer experience and driving sales across all platforms. This framework is all-encompassing with the integration of brick-and-mortar, eCommerce, and other marketing and sales channels.
Multichannel & ECommerce Strategy
Even though omnichannel is a preferred channel strategy, many retail businesses choose to maintain multiple channels (multichannel retailing) distinct from one another. For example, having independent channels helps mitigate risks. If any one channel goes through disruption, the effect remains confined to it to a large extent. However, staying away from eCommerce is also a difficult choice for multichannel retail businesses. This is where YRC’s multichannel & eCommerce solutions fit in. We help formulate the strategic and operations framework for running and managing a multichannel & eCommerce business. We understand the importance of staying aligned with brand values, value propositions, and the quality of customer journey and customer experience in each channel. We also address the logistics and fulfilment aspects.
Merchandising & Assortment Strategy
Product selection and presentation have similar significance in retail as our sense of dressing. What type of dresses we choose to wear, the colour combinations, the selection of footwear type and design, and any other accessory we may put on allow us to present ourselves suitably and as per the needs of different moods and occasions. In retail, merchandising deals with what products should be on the shelves and how they should be presented to create a visually attractive appeal towards delivering a superior customer experience and encouraging sales. Merchandising is the bigger concept here enveloping assortment. Assortment is that part of merchandising which deals with the detailing of product mix i.e. product variants.
In merchandising and assortment strategy, we help clients identify the right product mix that best reflects the market trends and consumer behaviour towards sales and profit maximisation. To be able to do that, we carry out extensive market research and make use of analytical tools. We also incorporate the relevant requirements of localisation while keeping an eye on maintaining the branding objectives.
Retail Growth Strategies
Focusing on growth and expansion is critical to survival in retail. No retailer could say that their business is future-safe from better competitors or any other source of disruption. On the top of that list is eCommerce. Given the rapid growth of smartphone and internet penetration and the distribution capabilities of eCommerce, there will be hardly any market left that eCommerce companies will not be able to reach. Secondly, if there is untapped market potential, new players are bound to come up in bigger and better ways. Thirdly, it is easier for bigger brands and businesses to capitalise on their popularity towards pushing the overall growth of their umbrella entity. We, at YRC, also understand the significance of the subtler aspects that emanate with business growth and expansion like achieving economies of scale, prioritising local markets, the idea of diversification and risk mitigation, improving brand recognition, and always staying ahead of competition.
With more than ten years of proven experience in retail business consulting, we have worked with numerous retail brands and businesses in their growth and expansion endeavours. We have helped them not just formulate the right strategies but also map the implementation roadmap and the operations framework for their expanded business setups.
Retail Pricing Strategy
In traditional distribution systems like FMCG, retailers are simply resellers. By the time, a product reaches their stores the scope of tinkering with the prices is confined to their margins. In contrast, retail brands and businesses with access to inventory higher up in the supply chain have higher margins. This is one of the main reasons why branded retail chains can offer more competitive prices in comparison to small retail stores. They achieve it via volume economies. Another vantage point of going up and big is the increased potential to sell private label brands. By collaborating with local manufacturers and suppliers, many supermarkets and departmental stores are able to start their own private labels.
In retail pricing strategies, we maintain that here also customers come first. The cost at which you are offering something of value to your customers must inspire them to try. You must know that point of inspiration for the majority of your potential customers. When you are dealing with pricing, deal with pricing alone – bring other factors later. In retail pricing, we take into consideration not just the universal tactics but also the impact of pricing on buying decisions and brand affiliation.
YRC Methodology
YRC represents a team of experienced retail and eCommerce consultants with more than 10 years in the business. YRC’s approach to planning, formulating strategies, and implementing solutions is one that encapsulates contemporary undercurrents, time-honoured fundamentals of business and management, and exclusive business requirements of clients. Our solutions are refined with every project for better results.
Market research is a prerogative in all of our projects. We have defined methodologies for every type of market research depending on what is being attempted to be analysed. We plan the research first. The results (driven by data and analytics) are shared and discussed with clients for fine-tuning solutions.
Moving towards formulating solutions, we adopt a strategic approach. Working with a strategic framework lends clarity of vision and direction and enhanced focus that allows efficiency in efforts and optimised resource allocation.
When it comes to implementation, we follow what we preach i.e. process orientation. Our implementation plans are defined using Standard Operating Procedures (SOPs). This helps ensure that the execution of projects is always on track and sticks to the established results and timelines. The scope of mistakes and deviations is significantly reduced when SOPs are followed.
We, at YRC, realise the importance of keeping organisations updated in all areas. This is why we incorporate the element of continuous improvement into our solutions. It can be something as simple as a feedback mechanism or enterprise-wide annual audit plans.
Success Stories
YRC has worked with 300+ brands across 13+ countries over the past 12+ years. Here are two case examples.
Case 1: The client was a dealer of a prominent car company. The challenges faced by the dealer enterprise were high attrition, low team output, lack of teamwork, and the working of the operations team was not properly aligned with the SOPs. After detailed study and analysis, YRC found that the middle-level management was not strong enough to effectively and efficiently handle the operations and sales teams. This was causing dissatisfaction and low morale among employees affecting their ability to give their best. The solution offered and implemented by YRC was a robust performance management system. YRC also helped the dealer enterprise come up with employee-friendly policies. The impact was visible after two months with reduced attrition, improved staff morale, better adherence to SOPs, and an increased sense of ownership towards roles and responsibilities among the employees.
Case 2: The client is a renowned department store chain brand. The company wanted to streamline the operations of its retail stores and warehouse. They were also facing issues with inventory reconciliation throughout the cycle from purchase to sales. Thus, they were also seeking a long-lasting answer for inventory management featuring real-time updates which are essential for making purchase decisions, maintaining MOQs, and conducting stock audits.
Because the company wanted to streamline their operations (which affect all departments and processes), YRC had to conduct a SWOT analysis of the organisation. This helped YRC map the operational requirements at the enterprise level. For streamlining operations, YRC designed Standard Operating Procedures (SOPs) for the departments and their processes covering Procurement, Accounts, HR, Sales, Warehouse, IT, Security, Housekeeping, Customer Support, Tailoring etc. These SOPs were then mapped with their ERP platform which resulted in reduced dependence on many age-old software applications for preparing reports. The integration of operations with ERP secured the objective of real-time access to process data for all the departments/functions including inventory management. Digitisation and SOP-IT integration made the task of inventory reconciliation more accurate and timely. With enhanced process transparency, conducting stock audits also became easier. YRC also provided training support to the entire middle and top-level management for a smooth transition. Although not a part of the initially highlighted challenges, YRC also designed a “Franchise Model” for the quick scale of the brand.
More Case Studies: https://www.yourretailcoach.in/case-studies/
Summing Up
Speaking of challenges in the retail business, new ones will keep emerging or the old ones will assume new contours – whether it is competition from eCommerce, diversity and dynamics of customer experience, pricing pressures, or modernisation. The key lies in keeping businesses tuned and true to market realities. This alignment requires the right strategies for the right outcomes in a data-driven approach. YRC can help your business formulate these retail business strategies and also assist in the implementation. Our approach is not just to solve the problems at hand but also to help your business emerge as a robust and agile enterprise.
About Your Retail Coach
YRC is a retail and eCommerce consulting brand with expertise in enterprise solutions for startups, management, and transformation. With over 10 years in the business, YRC has been a part of the growth journey of over five hundred clients from a diverse range of verticals. Today, YRC represents a brand with a scaling international presence and a team of qualified and experienced professionals.
To learn more about our retail growth consulting solutions, feel free to drop us a message: one of our retail consultants will shortly reach out to you.
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FAQs
How can I attract and retain more customers?
One of the most essential conditions for customer attraction and retention in retail is whether or not you have the right value propositions for the target segments in a given market. Once this equation is aligned, adjusting the rest of the variables should not be difficult. Under normal circumstances, businesses do not get to decide what customers need or would buy; it is the existing and potential needs and aspirations of customers that shape what businesses should offer.
What are the most effective marketing strategies for a small retail business?
Small retail businesses should focus on localisation-centric marketing strategies. The very essence of the existence of a small business operating within a limited geography relies on local market characteristics. For example, if your competitors are building a strong online presence, you too should consider doing the same. Here, it is more important what your immediate competitors are doing than what is becoming a standard or trend somewhere else. If you see that untapped market potential can be harnessed by extending your online capabilities, that too should be considered.
How can I optimise my pricing strategy to maximise profits?
In formulating an effective retail store pricing strategy, how you price your products individually (SKU-wise) plays a big role in maximising your overall profitability. Gone are the days when one uniform pricing strategy used to work wonders unless there is only one product with no line and depth (variation). To be effective with pricing, first, you must have a comprehensive and accurate understanding of the costs associated with every product variant (SKU). Ideally, you cannot charge below the costing point. Secondly, you must have an updated awareness of the prices charged by competitors (including eCommerce/online players). This will help you keep your prices attractive while still being profitable. Thirdly, you must consider the element of price sensitivity, especially for non-essential and promotional products. Last but not least, you should track and monitor the effectiveness of your pricing strategies. Other considerations that jump into this equation are the uniqueness and novelty of your offerings, overall costs and fixed expenses, market entry and positioning strategies, psychographics, etc.
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