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Four ways to simplify your retail operations and save money

Saving money isn’t the most glamorous of topics.

Yet when it comes to your retail business, simplifying the way you run it will help you save money and increase your profits. Running a retail business can be very expensive, and while you can never completely eliminate these costs, you can at least minimize them by making a few changes to your processes.

Here are four ways to simplify running your retail business and save money.

Reduced shipping costs
Like saving money, shipping is another unglamorous topic. And yet it’s really important to discuss it, especially if the shipping costs are too expensive for you at the moment.

Take a look at how you ship items right now and see if there are other options. Typically, a retail store drains money on expensive packaging. A simple way around this problem is to remove some materials that, although they look good, are not that important. For example, if you use cardboard boxes, you can swap them out for poly envelopes.

Take a look and see if improvements can be made to your shipping service as well. If you regularly experience delivery delays, this can multiply your expenses. You might consider switching to another service, or even a third-party logistics provider (3PL). A 3PL will simplify the way you run your retail business by doing all the hard work for you, and they’re cost effective too.

Plus, you can save on shipping costs by becoming more efficient in how you hire and manage your employees. By using retail scheduling software, you can predict demand and therefore the number of employees needed at any given time.

Focus on retaining existing customers
Are you currently focused on customer retention or customer acquisition? To research shows that customer retention is much more profitable in the long run, as it costs much more to acquire new customers than to retain existing customers. Additionally, a good customer retention strategy can turn one-time customers into repeat customers, which in turn increases their lifetime value, thus saving and save you money.

Here are some customer retention tactics you can implement:

  • Create a loyalty program. A loyalty program is a great way to increase customer lifetime value. Loyalty programs come with perks designed to encourage repeat purchases. With supply chain challenges and inflation these days, now is a great time to move beyond coupons and discounts and towards more personalized and targeted interactions.
  • Improve your customer support. Good customer support goes a long way in building customer loyalty. Customer support includes the availability of your staff to answer questions in-store, but it should go beyond that. For example, you can add chatbots to your website so that your store is available 24/7. Also take care of the little things in store, like warm greetings every time customers walk in.
  • Build a community. If a retail store is a community, it becomes much easier to establish trust and loyalty. Consider hosting in-store events that not only encourage people to visit your store more often, but also to build a relationship with you and make more purchases. Build social media profiles that encourage more interaction and engagement and foster a sense of unity among your customers.

Create an online store
The ongoing pandemic has undoubtedly changed our shopping habits. Investigations show that 51% of consumers have changed their online shopping habits; of these, 75% said they make more purchases online. With the increase in online shopping year over year, the United States is now the second largest e-commerce market in the world.

That’s why it’s a good idea to create an online store to go along with your physical store. An online store saves you money by significantly reducing your operating costs and physical space. You’ll benefit from mobile shoppers who are looking for an omnichannel shopping experience that allows them to move from your online store to offline at will. For example, they can order online but pick up their order in person. Plus, you’ll be able to capture more leads and convert more online customers into loyal customers.

Break down your expenses
Finally, one of the best ways to simplify running your retail business and save money is to take a closer look at your expenses and cut out unnecessary ones. After all, retailers incur a lot of expenses, many of which are usually spent on inventory. Therefore, it is a good idea to start with an inventory audit.

Examine the value that the products you sell add to your retail business and see which are profitable and which are not. There will likely be resources that are currently inactive, but appear to be a permanent fixture on your monthly supply list. These can be removed and replaced with more useful ones.

While simplifying your business may seem like a lot of effort at first, it will save you a lot of hassle in the long run. It will help get you and your business back on track while saving you time and money.