If you run or own a retail store, you know the amount of behind-the-scenes work it takes to keep your store running. Your retail operations are an essential part of that.
But what exactly are retail operations, and how can you work to improve them?
In this article, we’ll provide answers to your retail operations questions. Below is a complete guide to retail operations, with examples of different types and some practical ways that you can optimize or automate store operations to better your bottom line.
The term “retail operations” refers to any and all activities within a retail business that are needed for the business to run.
Simply put, they’re the day-to-day tasks you and your staff carry out to keep the business functioning.
The phrase can encompass a vast range of individual tasks, from sourcing and organizing products from suppliers to accepting payments from customers. In-store retail operations cover a broad area.
But the term doesn’t apply to only physical stores. E-commerce businesses and virtual retail locations, such as online shops, also perform retail operations daily.
If you streamline each aspect of your retail operations, you can decrease waste in your retail store — both wasted time and wasted money.
For example, if you have a comprehensive inventory management system, you can prevent instances of stock going out of date and being thrown out. Or if you have a proper staff management process, you can ensure team members aren’t doing the same tasks twice.
This is obviously an ideal outcome as a business owner. Less waste leads to better profit potential, and that’s always a good thing.
A proper retail operations system can also improve the customer experience. Suppose a customer enters your store and can easily find the products they’re looking for thanks to effective inventory management or powerful visual merchandising. These satisfied customers are far more likely to come back for a return visit.
Maintaining high levels of customer satisfaction is critical for retail store managers or business owners, and a deliberate operations system can help you achieve that.
Several individual tasks under the umbrella of retail operations likely already take place in your store, even if you don’t have an outlined operating procedure for it. Let’s take a look at a few examples.
Here are some examples of retail operations that will apply to you if you run a brick-and-mortar store.
Inventory management is the process of keeping track of your incoming and outgoing inventory and stock. It involves managing your supply chain, sourcing new products, and tracking which products are running low, need replacing, or don’t seem to sell well.
Carefully managing your inventory is essential when operating a retail store — without it, you won’t have the right quantities of your best-selling items.
Loss prevention activities are practices you and your staff undertake to minimize losses (aka “shrinkage”) in your business. Usually, these losses take the form of operational errors or theft by either customers or employees.
According to the 2021 National Retail Security Survey, the average financial loss for each shoplifting event increased between 2020 and 2021. The national shrink rate (the percentage of inventory lost each year) is currently at 1.6%, meaning that the average business is losing this much revenue due to loss. This staggering statistic shows just how vital loss prevention is.
Retail merchandising is organizing your stock in a way that’s appealing to customers. It involves aspects of your store layout and floor plan, as well as signage that appears on your sales floor, substantial lighting, and the shop window display.
Merchandising is all about making your store and its products as enticing as possible to customers.
Customer service also falls under the realm of retail operations. Customer service includes anything that might answer customer needs, from establishing a dedicated help point to ensuring staff members offer service with a smile.
Cash registers and point of sale systems (or POS systems) are other aspects of retail operations. They consist of the hardware and software you use to process sales and accept payment from customers.
Without a functional cash register or POS system, you won’t be able to process payments and earn money for your store.
E-commerce retail operations still include activities like supply chain management and inventory tracking, but all elements of customer service shift to take place on a digital platform instead.
Digital customer service might involve implementing a chatbot to solve problems or answer questions. It could also mean using social media to make your brand more accessible in the digital space.
Here are a few simple ways you can improve operations in your store. These methods could help you increase productivity, reduce waste, and widen your profit margins.
One of the best ways to improve retail operations is to automate or digitize some of your in-store processes. This is an effective way to optimize staff productivity — you can stop assigning repetitive, time-consuming tasks.
You can automate several aspects of your operations. For example, you could set up an automatic inventory management system. These systems track your stock levels in real time and let you place orders automatically when certain items are running low. It can also prevent overstocking as you’ll be well aware of how much of each item you have.
You could also choose a digital POS system for your store. Systems like KioskBuddy let you turn your tablet into a self-checkout device, allowing customers to pay for items themselves. Self-checkout systems help free up staff so that they can focus on other tasks.
By implementing some elements of digital transformation, you can simplify and optimize your retail processes.
If loss and shrinkage are issues in your store, installing a security system could be a good idea. CCTV systems reduce instances of loss through theft in a retail setting, so a camera system in your store could deter those trying to steal items.
An alternative option is hiring a security guard for your store. Specialist security staff can be an incredibly effective deterrent against petty thieves in the retail industry.
Another good way to improve your operations is hiring a retail operations manager. Having a team member focused on organizing and simplifying all in-store processes maximizes efficiency. They can bring in external expertise and provide suggestions you may have not considered.
While hiring, you could also employ a customer relationship manager (CRM) or a human resources manager. A CRM is in charge of customer service, so they’re useful if you’re struggling with that side of your retail business. A human resources professional can help you with staffing and employee retention — they’ll ensure employees are happy and productive.
With these additional staff members, you can focus your time and energy on store management.
In-store merchandising can be hard to get right. If you’re struggling to convert visits into sales, you should consider testing out new merchandising methods.
Do some research by visiting competitors. Take notes on how their stores are laid out, what imagery they use in their promotional materials, and any other ways they attract customer attention. Use their ideas as inspiration for your own store, and try out a few different techniques.
Test these new merchandising techniques by setting a few sales goals for your team. Move on from options that don’t work and try something new.
Managing operations in your retail store can be challenging. From loss prevention and inventory management to customer service, you’ll have a lot on your plate.
If you’re thinking about making some changes to your operations, start with something simple. Upgrade your cash register with an easy-to-use digital POS system from KioskBuddy. All you need is a tablet and any Square payment hardware — the KioskBuddy app will let your customers process and pay for orders using a credit card or contactless.
KioskBuddy can also provide you with real-time retail sales data metrics so you can keep track of your sales with ease. It even lets your staff process refunds without difficulty.
Sign up for KioskBuddy today and simplify your retail operations in one easy step.