Retail Business Consulting

Challenges in Retail Business – from Management Standpoint

Competition from ECommerce

Online retailing offers a significant edge to customers over the traditional brick-and-mortar form of retailing. To begin with, customers can place their orders around the clock. The orders get processed as the first thing of the next working day. Secondly, online retailers are much less constrained by space. Their order fulfilment processes are designed to start from warehouses or fulfilment centres. Store-based retailers must have stock in their stores to offer and sell. At the most, they can have storerooms or small warehouses in the vicinity. A third advantage of online retailing is the availability of information to further or complete shopping journeys. Whether it is product descriptions, prices, alternate brands, or available packaging sizes, customers can access all this information with a few clicks or taps.

Creating Brand Resonance

Creating the desired brand resonance is a major problem with MSME retailers. Big brands with extensive resourcefulness often are able to push their brand communications with extensive and powerful promotions. This helps create a buzz for a timeframe good enough to leave positive impressions. Small businesses usually do not have that kind of leverage. Their promotional efforts tend to remain constrained and hence, the window of opportunity to create a sustained brand impression also stays limited. In small businesses, it is also difficult for business owners to focus everywhere. The homogeneity of products and services in the same retail sector is also another challenge in creating brand resonance.

Managing Inventory

A common challenge for all retail stores in managing their inventory is keeping track of extensive merchandise. Whether it is market research, demand forecasting, daily stock reporting, or purchase planning, every category of product and its variants must be accounted for.

The second big challenge is reading the demand for products and variants. Inventory is purchased and stocked in retail stores based on the projections of demand. If this assessment proves to be incorrect, retailers end up with unsold stock and working capital gets locked.

Poor planning and execution of processes in retail inventory management also invite many avoidable challenges. A simple example of this is not having a calculated replenishment time and failing to order on time.

Achieving Operational Excellence

Managing business operations calls for a consciously planned approach. Retailers need to get down to every small detail in operations planning. Anything that must be done or is expected to be done has to be planned. Otherwise, a mismatch between actual and expected performance is bound to happen. Planning is critical to achieve operational excellence.

Being people-dependent and not process-driven is another factor that prevents businesses from achieving operational excellence. When operational decisions are not defined and left to employees to make, even their best and sincerest attempts may not align with the business requirements.

Incorporating software applications and other technologies to drive or aid operations should not be regarded as the key to achieving operational excellence. These tools are great but only when designed or tailored to suit the business and operational requirements.

Zero to Sluggish Growth

Two big factors making growth difficult in retail are already highlighted in two of the previous points – competition and creating a brand distinction. More number of retail players in a market give options to customers. For most non-routine purchases or in the absence of any brand preference or loyalty, customers tend to check out their options. For example, customers may not frequently change their grocery stores but when it comes to purchases of a non-routine nature, they will not hesitate to try new shops. Even in the case of grocery stores, competitors can persuade customers to deviate from their routines. Without brand distinction, customer loyalty, and strong value propositions, retail businesses are more prone to external influences. These disruptions affect the ability of retail stores to capitalise on their market shares. It also affects them commercially straining their flow of revenue and shaking their business models from the core. Since growth and expansion are essential and every small opportunity must be identified, YRC covers this aspect from the early stages of the business plan consultation process.

Future Trends in Retail

Experiential Retail

The element of experience is gaining ever-increasing prominence in retailing. This affects all kinds of businesses irrespective of their size and stature. Different businesses incorporate this element in different ways. For example, a fashion label store in Milan may use AR and VR to help customers virtually try out their designs. A neighbourhood departmental store may emphasise imparting soft skills and product training to their staff to deliver a better customer experience. A restaurant or a cafe may add a bookshelf or provide free Wi-Fi. From a traditional perspective, none of these extra efforts constitute a part of the core product/service or core benefit. These additional layers of benefits help improve the shopping/consumption journey and experience of customers. Customers associate these additional benefits as a part of the overall value proposition of a retail store. This augments the value from shopping from a particular store. Today, these additional benefits are seen less as ‘additional’ but as something ‘essential’. Sometimes experience alone is a strong value proposition. Two prime examples of old cafes and comic shops.

Glamour and Grandeur in Retail Servicescape

In modern-day retailing, the quality of servicescape (the physical environment) has gained tremendous significance. Customers seek a superior physical shopping environment. It could be in terms of layout planning, interior design, furnishing, lighting, acoustics, parking facilities, etc. There is no room for average when it comes to retail servicescape. It must exceed the expectations of customers. The bar has moved beyond the basics touching the realms of glamour, grandeur, and fanciness, such a servicescape is more likely to attract the attention of customers. The servicescape plays a big role in delivering elevated levels of customer experience. In a positive and emotionally active shopping environment, customers are more likely to try new things. It helps them process their buying decisions. The servicescape is about creating the right physical environment. For example, if you have a pool in your backyard, your family and friends may show more interest in visiting your place during the summer. Remove the parking option and you will see the interest go down. Servicescape has a similar impact in retail stores.

Widespread Adoption of Omnichannel Strategy in Retail

Omnichannel may be a common term for most big and medium retail brands and businesses but it is its deployment by small and micro businesses that will take the world of retail by storm affecting retail customers in large scales. Some of the reasons to believe widespread omnichannel adoption by micro and small businesses include:

• Countering competition from bigger players (online, offline, hybrid/dark stores)
• Leveraging local expertise for capturing local market shares
• Facilitate wait-less shopping and better customer experience
• Achieve quicker growth and expansion

This could mean that your neighbourhood grocery store will have a digital presence and you might be able to place an order in the middle of the night and pick it up from the store the next day. This is like eCommerce or dark store shopping coming to every small retail store. Maybe many such retailers have already adopted that strategy but omnichannel is going to find widespread adoption. Technology adoption is set to play a big role in this. This will have significant changes in how our supply chains and distribution models work.

Digital Marketing a must

Veteran retail management consultants would not shy to second that a large majority of businesses are yet to harness the true potential of digital marketing. A small manifestation of this lies in the incompleteness of the information shared by so many businesses on their search engine profiles (knowledge panels in Google). However, this is quickly changing and more and more businesses are realising the need to catapult their digital marketing positions. The growing number of digital marketing experts and tons of quality information available on the internet will play a pivotal role in the quick and widespread adoption of professional-level digital marketing.

How YRC helps retail businesses grow

Growth is a multi-faceted phenomenon. Neither does it come from planning alone nor execution alone. Also, planning and execution cannot be viewed with the same lenses. In business, planning and formulation of strategies are non-routine but execution is a routine phenomenon. Execution is the medium via which plans and strategies are manifested. What becomes essential here is the consistent reproduction of the required standards of execution – every single day, every single time. Only that gives consistent manifestation to plans and strategies. Such working systems are pro-growth in many ways:

• Business owners need not meddle with routine operational affairs of the business and they can focus on growth and expansion concerns
• Higher operational efficiency has potential to save operating expenses (resource redirection)
• Proven processes can be automated (fully or partially) leading to more operational efficiency
• Proven business processes can be replicated much more easily in new locations (expansion)

Such consistency (and accuracy) in the reproduction of standards emanate from business process definitions. One of the best tools to map and define business processes is Standard Operating Procedures (SOPs). With more than 10 years in business, SOP development and implementation is one of the hallmark services of YRC. Given below is a snapshot of how different SOP solutions by YRC help retail businesses strive for growth and expansion.

Digital Marketing a must

As a starting point, it is very important to understand the challenges, expectations, and other additional requirements concerning the supply chain function of a client’s business. The new supply chain objectives and performance standards are established at this stage.

YRC reckons that it is difficult to part ways with processes and practices that have worked for years. However, the existing working systems may not necessarily be aligned to support high operational efficiency and business growth. YRC evaluates the existing processes and practices. It helps identify areas of improvisations towards making the new processes more efficient and effective and aligned to the new process objectives and requirements which is the next stage – process gap analysis. After the necessary analysis and deliberations, the new processes are developed using SOPs. These supply chain SOPs also serve as the source of foundational information in bringing home a suitable SCM software application.

Retail Inventory Management SOPs

Through SOP solutions, YRC seeks to lend speed and accuracy to several important functions of retail inventory management.

Supplier selection and onboarding – Since the quality of goods supplied can directly affect the image of a retail business, it is important to be diligent in the selection as well as onboarding of suppliers. YRC’s objective here is to ensure that only qualified candidates (suppliers) come into the picture and only the best-fit candidate makes it. Every step in this process has conditions to be fulfilled covered by checklists, documentation and accountability.

Purchase/Order/Reorder Management – In retail procurement, a purchase manager (or equivalent) must know four things in the affirmative for timely stocking or replenishment of stock – time to order, what to purchase, quantity of order, and source of purchase. Any missing component among these four could lead to deviation from expected performance. The experts of YRC understand how these four elements pan out and the SOPs are designed accordingly suiting the unique business requirements and constraints of each client.

Other functions covered are:

• Demand Forecasting
• Quality Control
• Returns, Replacements and Refunds
• Receiving, Storing, and Stacking
• Reporting
• Inventory Audits

Replenishment and Assortment Management SOPs

Replenishment is the task of getting goods on time. Assortment determines what products should be on the shelves or in offing. It is important that assortment and replenishment work in tandem in retail stores. For example, seasonal demand may call for the stocking of specific products on the shelves. The replenishment function must be aware of these merchandising changes. Only then such seasonal products could be made available on time. Even if products with consistent demand are considered, these products should also be always replenished on time. In retail stores, assortment may encompass hundreds of products and their variants with the element of a multitude of brands. It is extremely important to keep assortment and replenishment on the same page to ensure that the required stocks are always available. Without a planned procedure, the handshaking of these two functions is horrendously difficult. YRC understands the complexities of and the requirements of replenishment and assortment management systems in retail. The assortment and replenishment SOPs are designed to ensure that these two processes are executed flawlessly and the right product mix is consistently present on the shelves and always on time. Even for automation to work, this decision-making process must be available in terms of procedures (SOPs).

Standard Operating Procedure for Retail Stores

YRC offers a comprehensive package of retail store standard operating procedures encompassing almost all business functions and processes. This solution is relevant to startups and existing retail businesses seeking to establish a strong base of operations planning from the onset or completely redefine their business processes and operations using SOPs. It is also relevant to growth, expansion, and re-branding projects.

Distribution Centre Layout Re-Engineering & SOPs

Although distribution centres are often associated with eCommerce, retail stores with eCommerce capabilities (or dark stores) may also have to manage and operate their own distribution centres.

Many times, the existing layout of a distribution centre may demand adjustments. These adjustments mainly stem from the goal of increasing/optimising the volume-handling capacity and operational efficiency in distribution centres. In the event of the re-engineering of a distribution centre layout, many business processes are affected. In other words, the existing operational workflows are rendered ineffective. If a layout changes, it affects the movement of people, the placement of machines, and the flow of inventory giving effect to how business processes are conducted in the new set-up. For example, if the place of packaging is shifted to a new area, not only will the employees have a different navigational route to follow but it will also disturb the prior and following tasks in the process. It will also affect the other processes connected with this one. The role of YRC here is to develop the new SOPs for the business processes of the re-engineered distribution centre layout. YRC seeks to ensure that this transition phase is smooth and the new ways of working quickly become normal. Necessary adjustments in the other business processes are also highlighted so that the process coordination stays intact. Any required changes in the software ecosystem shall also be brought to light.

Retail Business Plan Consultation

YRC’s business plan consulting services specifically focus on the financial and commercial aspects. YRC carries out extensive research with analysis by experienced consultants to present a comprehensive picture of all the areas of financial and commercial importance. The ultimate objective here is to make it a cakewalk for clients to see the number game and make their further planning, strategy formulation, and decision-making easier.

Retail Business Franchisee Consulting

In franchise consulting, from the formulation of a sound franchise expansion strategy to the details of franchise audit and control, YRC lays down the entire roadmap of franchise implementation. In addition to these extreme ends, other important areas covered by YRC are franchise business model development, the formulation of franchise business plan, assistance in franchise partner selection, development of franchise operations manuals (franchise SOPs), and franchise agreements.

How YRC helps in the setting up of a new retail business

Retail Strategy Consulting

In consulting for retail, YRC helps formulate the entire range of functional strategies allowing new businesses to be fully prepared from the inside in terms of every business function – individually as well as collectively as an enterprise. Some of the specific areas of strategic significance in the retail business are CX, operations, technology, digital marketing, infrastructure and layout, supply chain and logistics, and personnel/HR.

Retail Pricing Strategy Consulting

Pricing strategies in retail have become very dynamic in recent times. In addition to the traditional base factors, retailers have to be on their toes to be able to respond to the changing dynamics of the market environment – especially the ones originating from competitors (both online and offline). YRC has been a seasoned retail consultant for more than 10 years and has consulted a large list of clients in fine-tuning their pricing strategies. YRC’s objective is very simple – helping clients set the right price with the bigger financial and commercial goals in mind.

Drafting a Business Plan

YRC’s business plan consulting services are focused on getting the financial and commercial angles right from the word go. Other elements of business planning like business model development and operations planning are dealt with as separate services. In business plan consulting services, YRC addresses a comprehensive coverage of matters of financial and commercial significance.

Establish Store Management System with SOPs

A Store Management System (SMS) refers to a set of policies, procedures, and technology solutions incorporated to manage the operations of retail stores. As experienced retail operations consultants, YRC helps deploy ready-to-go SMS solutions that are proven and tested. Since every retail business has unique requirements, these solutions are improvised. One of YRC’s core competencies is SOP development and implementation. Ensuring follow-up with the established plans and policies governing operations is one area where retail businesses struggle the most. It is easy to make a plan or a policy but the real difficulty is ensuring that those in charge of operations actually adhere to it. SOPs come in very handy in overcoming this problem. SOPs are also important because how a deployed technology supports operations planning depends on how well the processes and operations are defined.

Retail Store Layout Strategy

Various factors get embroiled in the planning and selection of a retail store layout. Some of them are basic like space constraints, movement, safety and security, etc. The other set is a bit of luxury that only a few can make room for. This includes branding, aesthetics, interior design, etc. YRC maintains that blending both worlds is not easy but that is where the scope of magic lies. There is no harm in taking the assistance of luxury retail consultants in making a store layout hit the bars of luxury with efficiency. Such experts from retail consulting firms help identify and implement the right solutions in a short time.

Retail Warehouse Layout Design & Operations SOPs

If the primary emphasis in retail store layout is on customer experience, in the case of warehouse layout design, the attention is on back-end operations. A good warehouse design must support maximum holding capacity, due to adherence to quality control and safety and security standards, smooth navigation of people and inventory, and error-free execution of warehousing, inventory management and order fulfilment operations. For a layout design to work as intended, operations planning is equally important. If a process cannot be smoothly executed in a layout, it is not a fit layout. As experienced retail industry consulting professionals, YRC provides expert assistance in incorporating the best-fit warehouse layout design and the SOPs for warehouse and inventory operations.

How YRC helps capture the online retail opportunities

YRC is an eCommerce and retail business consulting firm with more than 10 years in business. YRC is also one of the handful of retail consulting companies with a steady but growing global presence. With experience and expertise in both retail and eCommerce, YRC’s domain of work involves the intricacies of both channels. This is a reason why YRC’s retail store consultants can identify opportunities cutting across channels and present expert solutions.

Omnichannel Consulting

In omnichannel consulting, YRC helps identify areas where omnichannel strategy can be applied followed up with the requisite strategies, planning, and operational roadmap. YRC maintains that an omnichannel strategy must be applied thoughtfully and strategically. Omnichannel strategy is meant to serve as a bridge over problems which neither retail nor eCommerce alone can cover. For example, if a furniture brand provides a mobile app to help customers visualise how a furniture product would look in their homes, it makes it easier for customers to process their buying decisions. Or a mobile phone brand having authorised sales and service centres would be much more convincing to customers.

Only ECommerce Consulting

In eCommerce consulting, YRC offers an extensive range of services starting from market research to order fulfilment SOPs. Here, YRC caters to two sets of clients – startups and existing eCommerce brands and businesses.

For startups, YRC helps build a business foundation based on insightful and actionable market research, razor-sharp business strategies and planning, best-fit technologies, and high-ROI digital marketing and branding campaigns. Retail businesses intending to shift gears to eCommerce are also covered here.

For existing eCommerce brands and businesses, the requirements are different. These are businesses that are usually for growth and expansion. There may be a vision for the same but the challenge is the ‘how’ of it. This is where YRC chips in with the right set of solutions covering eCommerce CX, eCommerce omnichannel, eCommerce operational excellence, and guidance for eCommerce process automation.

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