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 boost your profits. Running a retail business can be very costly, and while you can never eliminate those costs altogether, you can at least minimize them by making a few changes to your processes.  

Here are four ways to simplify how you run your retail business and save money. 

Lower shipping costs
Like saving money, shipping is another unglamorous topic. And yet it’s really important to discuss, especially if shipping is costing you too much money at the moment.  

Take a look at the way you ship items right now and see if there are any alternative options. Typically, a retail store drains cash on expensive packaging. An easy way around this is to remove some materials that, while they look good, aren’t that important. For example, if you use cardboard boxes, you can swap these for poly mailers.

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 could consider changing to a different 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 also cost-effective. 

Also, you can save on shipping costs by getting more effective with the way you hire and manage your employees. By using retail scheduling software, you can predict demand, and thus how many staff is needed at any one time.  

Focus on retaining existing customers 
Do you currently focus on customer retention or customer acquisition? Research shows that customer retention is far more cost-effective in the long run, because it costs a whole lot more to acquire new customers than it does to retain existing ones. Not just that, a good customer retention strategy can turn one-time customers into loyal ones, which in turn boosts their lifetime value, thus saving and making you money. 

Here are some customer retention tactics you can implement:

• Create a loyalty program. A loyalty program is a great way to boost customer lifetime value. Loyalty programs come with perks that are designed to encourage repeat purchases. With supply chain challenges and inflation nowadays, it is a great time to move beyond coupons and discounts and lean toward more personalized, targeted interactions.
   
• Improve your customer support. Good customer support goes a long way to building loyalty among your customers. Customer support includes your staff being available to answer queries in-store, but it needs to go further than that. For example, you could add chatbots to your website so that your store is available 24/7. Also, take care of the little things in-store, such as warm greetings each time customers enter. 
   
• Build a community. If a retail store is a community, it becomes far easier to build trust and loyalty. Consider hosting in-store events that encourage people to not only visit your store more often but also to build a rapport with you and make more purchases. Create social media profiles that encourage more interaction and engagement and foster a sense of togetherness among your customers. 

Create an online store 
The ongoing pandemic has undoubtedly changed our shopping habits. Surveys show that 51% of consumers have changed their online shopping habits; of those, 75% said they are making more online purchases.  With online shopping rising year-over-year, the U.S. is now the second-largest e-commerce market in the world.

This is why it’s a smart idea to create an online store to go alongside your brick-and-mortar store. An online store saves you money by dramatically reducing your operating costs and physical space. You’ll get to take advantage of mobile shoppers who are looking for an omnichannel shopping experience that allows them to switch from your online store to offline at will. For example, they might order online but pick up their order in person. Moreover, you’ll be able to grab more leads and convert more online customers into loyal ones. 

Break down your expenses
Lastly, one of the best ways to simplify how you run your retail business and save money is by taking a closer look at your expenses and removing any unnecessary ones. After all, retailers incur numerous expenses, many of which are typically spent on inventory. Therefore, it’s a good idea to start with an inventory audit.  

Take a look at the value the products you sell add to your retail business and see which ones are profitable and which ones aren’t. There will likely be resources that are currently dormant, but which seem to be a permanent fixture on your monthly supply list. These can be removed and replaced with more useful ones. 

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