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As follow up to the article on how to increase retail sales, in this article we will discuss six more ways to excel in retail sales. The ways and means described below are time-tested and have yielded results when planned and implemented right.
However, please take into consideration that due to the on-going lockdown restrictions which we must all abide by, it might not be possible to implement these techniques for now.
Standard Operating Procedure
Standard Operating Procedure is a tool wherein all the steps involved in completing a task or operation are represented in an ordered sequence of execution. It not only covers the steps involved but also defines for each step – what to be done, who will do, how to do, where to be carried out, and when to be done. SOP simplifies complex business processes and operations and serves as an operational roadmap for the employees. It also simplifies supervision, reporting, and control.
The benefit of retail SOP also extends to brand enhancement. Retail SOPs not only streamlines retail business processes and operations but also lends uniformity to them which helps in ensuring that the same, planned, and intended customer experience is delivered every time across the stores.
With Standard Operating Procedures, employees have an operational roadmap for guidance. Complex tasks are broken into a sequence of tasks. This helps employees get a grip on their operational performances. Improved employee performance further ensures that retail operations are headed as planned and intended. With the internal systems working robustly, achieving the external results (higher customer satisfaction, higher sales, supplier satisfaction, etc.) becomes much easier.
As customers, we all love to see those flat discounts on our favourite retail stores. It does give customers an incentive to walk into the showroom or the retail outlet to have a look, try something or even buy it at a concessional price. Promotional selling is an effective mean for stock-clearance, market development, volume-based selling, etc. Pricing-related promotions are capable of eliciting a stronger response. Many big retailers like Big Bazaar offer bigger discounts on a particular day of the week and enormous footfalls are seen then. Even small and medium-scale retailers can achieve improved sales via promotional selling. Nowadays many small grocery or departmental stores sell below the printed price. Although that may qualify as a pricing strategy it also does some brand promotion.
Also, you can come up with special promotional offers on occasions like Christmas, Diwali, Eid, etc. You may also choose to opt for personalized pricing for birthdays, marriage ceremonies, etc. Such special occasion-based promotional selling will need some advertising efforts, say through word of mouth or a banner at your storefront and on your business social media pages.
Understand your Customer
The entire business thing revolves around one entity and that is the customer. What any business effectively does is create value for its customers. If that value is lost, almost everything is lost. To keep that value alive, you will always have to keep at the fore your knowledge and understanding of your customers and their needs and preferences. If you fail to understand your customers, you will fail to create the value for them. That is why it is often said in marketing that the customer is the king.
In communication with your existing or potential customers, the message should be clear that the value you are offering can address their needs and preferences. Such communication can take place through advertising or through direct interaction with your staff or store merchandising or in any other form where customers come in contact with your business or any point in the customer experience journey.
If you are just one step ahead of your competitors in understanding your customer requirements, it can give your retail business a significant edge. A simple example would be carrying bags. Some stores overcharge for non-plastic based carrying bags while a few stores give it away for free or at a negligible charge. The customer requirement here is environmental sensitivity. By giving carrying bags at economical rates such stores are helping customers contribute to the environment. This may not immediately reflect on your revenue but it helps create brand credibility.
Fabien Tiburce, CEO of Compliantia observed that companies should stop obsessing over price and even the product highlighting the need to focus on customers and the customer experience. The bottom-line is your marketing approach should be customer-centric. Your marketing decisions should be made keeping in mind your customers and your target market segment. For instance, in every meeting at Amazon, there is always an empty chair which represents their customers. This is a usual practice started by its founder Jeff Bezos to ensure that the customer perspective is not missed before any strategic decision is made.
Retail stores source their inventory from vendors/manufacturers. Vendor management is not easy and it can get tedious dealing with multiple vendors. But what is more important here is your approach. A professional way to look at suppliers and vendors is to view them as your business associates or partners. They play an important role in the supply chain i.e. of providing inventory or stock for your store.
Through effective vendor management, you can better ensure that these suppliers and vendors understand your business requirements and function accordingly. They are not obliged to understand your customers’ requirements. So, you will have to design your systems and policies of operating with them while keeping in mind your marketing strategies and the understanding of customer requirements. Once a better vendor and inventory management system is in place, then it is easier to power up retail merchandising or to carry out promotional sales or to devise better return policies for customers, etc.
Suppliers and vendors also play a vital role in controlling the inventory costs of a business enterprise. Better retail vendor management practices and policies contribute to better retail inventory management. With stock coming in (and returns) with higher efficiency and effectiveness, the holding and transporting costs can be reduced which can be channelled towards creating additional value to customers.
Working Capital Management
Capital is one thing which is extremely important in a business and it should be managed prudently for both the short and the long run. Just like capital investments are made after due diligence and proper planning, working capital (the funds required day-to-day operations) too needs a planned approach. A working capital ratio (CA/CL) of less than 1 indicates a possibility of short-term liquidity problems; anything more than 1 is considered better. Maintaining the optimum level of current assets and current liabilities becomes a necessity here. For example, salaries are a current liability in a working capital cycle and to be able to pay salaries to the employees on time, it needs to be ensured that sufficient liquidity (current assets) exists when salary payments have to be made.
Advertising (promotion) is one of the most important activities in marketing. The essence of advertising lies in improved customer awareness, generating motivation for making purchases, and ensuring continued brand loyalty.
At the first place, your potential customers need to know that you exist or you have launched a new product/service. You will have to take your brand in front of them and a solid way to do that is advertising. Advertise relevantly as much as possible to increase brand awareness.
Then comes how you could attract your potential customers with advertisements. If your message (offerings, value proposition, USP, problem and its solution, etc.) through advertising is not clearly conveyed to your targeted audience, your advertising efforts are unlikely to grab customers’ attention and interest for further action (footfall or purchasing).
You should advertise on both online and offline channels to reach a wider audience. Offline channels could be newspapers, billboards, fashion and business magazines, television advertisements, etc. Online channels include ads on social media channels in the likes of Instagram, Facebook, YouTube, etc. You should choose the relevant advertising channels based on your target audience and the nature of product/service in question. For instance, if you are offering professional training programs, then you should prefer LinkedIn over Instagram, primarily because LinkedIn is a social network platform for working professionals.
Some of your advertisements will work in creating a significant buzz indicating that you have hit the right chords with the right audience while there may be some other campaigns not yielding any significant results. Thus, it is important to measure the productivity of your advertising campaigns. If more advertising is not translating to increased sales or expansion of your customer base, then you need to revisit your advertising strategies and campaigns.
While advertisements are capable of creating a buzz, they are also capable of stirring up controversies or even hurting your brand. If you happen to advertise through online channels on social media, then you have to be on your toes all the time. Albeit being a trait of unhealthy competition, it has been observed on many occasions that companies leave no stone unturned in taking a jibe at each other. Response to offline advertising can too be creatively ruthless.
Also, do share in the comment section about your experience and efforts in increasing retail sales and of implementing any of these solutions. Stay safe and maintain the prescribed precautionary measures.
Read Part 1 – How to Increase Retail Sales? – Part 1