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How to Increase revenue by 6 to 8 base points in small retail business by adopting technology ?

sumesh K menon Mar-3rd , 2017 0 comments

Small retailers go through different challenges/problems on daily basis, which might be related to finance, personnel, inventory, profitability, statutory etc.,. The outcome of these challenges will be magnified especially because, most of the retailers work on thin margin. Generally retailers take many approach to solve these problems like – cut down costs, optimise employees, Play a volume game etc., If you are smart enough to analyse real impact without wasting much time, you can guarantee a smooth sail.

If you are in the middle of such situation, and you are not sure where to touch up on to drive your retail business to growth path, this article may be helpful for you.

Lets brief about the title of this Article – How to increase your revenue by 6 to 8 base points - by adopting Technology. We can see lot of points which can increase potential revenue if technology is adopted in right place. Some the points you can consider as follows.

1. Know and Engage your customers with different communication channels :
(Potential weightage on increasing profitability – 1 points)

As a retailer, you might be selling the same products as your competitor sells. Brining out a differentiating factor is very tough for retailers. But as a retailer, you are sitting on a pile of information about your customers, which you have not thought before. Try to grab data of customers as much as possible and use this for delighting and engaging them on continues business. To increase sales and keep profits high, its imperative that you need to create a shopping experience that sets you apart from the competition. Some of the customer engagements activities which may increase loyal customers are:

  • Try to identify your customers in store or Ecommerce much before they anticipate. Welcome them by their name and personalise the deals based on their purchasing pattern.
  • Thank your customers after each sale by way of SMS or email, and show them that they have helped your business to grow one more step with their purchase.
  • If a product which your customer asked is not in your shelf, but you can arrange to get it delivered in coming days, grab that data and inform them as soon as it hit your inventory.
  • Try to remember special occasions of your customers and try to wish them with some kind of reward points. Give them a surprise.

A good retail software with customer engagement tools will help you to achieve these objectives.

2. Optimise your inventory – know Dead stock/slow moving stock
(Potential weightage on increasing profitability – 2 points)

Inventory is always an asset for any retailer, but how fast it rotates in your shelf matters most. Know which inventory is super profitable and which is not.

Any retail organisation, whether in retail or wholesale, sees a return within months from optimising their product replenishment processes. This applies to all retailers. No matter you sell groceries, or toys or books, the same principles apply.

An efficient replenishment system offers three broad benefits:

  • Reduced process costs.
  • Lower stock levels and improved inventory turnover.
  • Higher service levels.

Automation helps you to bring this implemented fast in your organisation. Automate your inventory management system and it never stops.

3. Reduce POS vulnerability and Theft
(Potential weightage on increasing profitability – 1 point )

A report by The National Association for Shoplifting Prevention, estimates that, the product theft causes $13 billion in annual losses to the retailers. By incorporating highest security measures like cameras and RFID tagging you can reduce this lever and reduce your potential loss.

Another point to consider - If your POS has got loopholes, POS counter staff can clearly siphon off huge amounts from your cash counters. These activities is being reported by retailers who don't have a foolproof POS system which is automated and shows real time data to the management.

Reduction is loss – means, increase in profit to that effect.

4.Know your exact Damage/wastage ratio
(Potential weightage on increasing profitability – 1 points)

Damage, Wastage or Staff consumptions is one of the main area of concern for most of the retailers. If you are in perishable product business or food retailing, it matters most. Wastage can happens in different cost points. it can be from inside store, while on transit, from ware house etc.,

A good information system will help you to prevent wastage to an extend by helping you in demand forecasting, planning and execution.

5. Effective Receipts management system – especially relevant in the case of Credit business.
(Potential weightage on increasing profitability – 1 points)

Many a times its been found that, proper mapping of cash received is not assigned towards the correct invoices. It might seem like a small activity, but the impact can be huge. Its especially relevant if you do Credit sales. In Credit business, cash is received in different intervals, which if not tracked properly to the right invoice chances of non recovery is more.

An effective automated process of managing your accounts receivables can help you manage this issue and thus reduce the loss due to the same.

6. Realtime information for informed decision:
(Potential weightage on increasing profitability– 2 points)

Any retailer, whether its big or small should have the ability to see the realtime data at any time. This will help the retail owners to take right decision in right time based on valid data. Its especially true in the case of optimising the inventory levels in your store. Realtime dashboards can give you a pictorial view and inputs for some actionable items. Its same with real time sales data. Real time sales data dashboards will help you to get a clear picture on the sales activity, thus keeping a track on achieving your target or quota.

As a small retailer, if you can take important decision on right time, it will help you to reduce all unwanted expenses and increase your profit

By adopting a cloud application which is hosted or SaaS can help you leverage the realtime dashboards.

To conclude, as a small retailer, its imperative that you should look for many option to increase your bottom line. By implementing a right cloud based tool can help you achieve this in short time.

The writer can be reached at sumesh@windsbsolutions.com

Image courtesy : http://topsalescopywriter.co.uk/12-reasons-hire-copywriter-help-grow-business/

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