The retail industry isn’t what it once was. The unique challenges of retail that are, for the most part, brought on by the economic circumstances in the consumer spending sector of today are not to be trifled with.
These circumstances can create daunting tasks that are insurmountable to even the greatest retail giants. Just look at Sears and Toys R Us, both of which have gone bankrupt in 2019, with Toys R Us being declared entirely insolvent.
What’s the primary reason for the financial struggles of these two firms? They both failed to update their business strategies to accommodate the modern consumer.
In today’s market, retail firms simply can’t settle for just anything. Even an ingenious business model in the case of Toys R Us who marketed themselves as the home of every must-have for children.
There is a range of other factors that determine the success, or lack thereof, of the modern retail store.
Maintaining Customer Loyalty
Customer loyalty is one of, if not the, most important aspects of success in today’s retail industry.
You can sell the greatest, most cost-efficient products on the market, but if your customers aren’t incentivized to keep coming back, you’ll constantly have to be on the lookout for new customers.
Not only is acquiring new customers more difficult than convincing those that you already have to stay, it simply isn’t as profitable in the long-run if those new customers have no reason to stay.
It would be like sifting for gold with a hula hoop rather than a strainer.
Theft of property is typically not something that online-only retailers or straight-to-the-consumer firms have to worry about. However, theft in physical stores can lead to increases in inventory shrinkage of tens of billions of dollars throughout the entire market.
If a retail store fails to properly account for theft and take adequate steps to improve loss-prevention systems, this loss can represent itself in thousands of dollars every year for small firms or every month for larger firms.
On the other hand, businesses that spend too much on loss-prevention and security can end up losing far more in payroll and systems expenses than what they would otherwise be losing to inventory shrinkage.
To be on the safe side, it is typically a good idea to speak with a loss-prevention firm about how much you would have to spend on their service and then compare that with how much you are losing without them.
Protecting Intellectual Property
Physical theft isn’t the only form of theft with which retail firms have to contend. Whether it’s your business’s software, logos, brand name, or any other original creation, there are countless ways for thieves to counterfeit your ideas and use them for their own.
By stealing your intellectual property, thieves can significantly damage your firm’s economic viability by exposing you to undue competition, increased financial risk, and siphoning off a large portion of your current consumer base. This has widespread potential ramifications.
All of these problems can grow overtime until there is nothing left of your business. However, if you secure the help of a patent attorney you can nip these risks in the bud before they ever arise.
J.D. Houvener, a Houston patent attorney, stresses the importance of intellectual property in any industry:
“Many people make the mistake of thinking that intellectual property isn’t necessarily critical to their industry. Whether you’re working in manufacturing or finances, intellectual property protections play a vital role in ensuring the security of your company.”
Whether you are looking for something as simple as a trademark for your business name or a patent for an original invention or idea that pertains to the items sold in your story, it’s important to be as thorough as possible to keep your original ideas safe from infringement.
Although the patent cost can sometimes measure in the thousands of dollars, that price pales in comparison to the hundreds of billions of dollars lost to theft of trade secrets and other intellectual property in the US economy each year.
Just like with consumers, you have to worry about maintaining employee loyalty. If your employees feel valued and respected, they are likely to continue working for you. If you have good employees, you want to keep them. That’s just common sense.
But if it’s so obvious, why do so many firms skimp on employee benefits or wages, which are two of the highest priorities for retail workers? Because those employers don’t understand the importance of employee retention.
Every retail firm has an incentive to pay its employees as much as the profitability will allow and to provide ample benefits in order to not only attract the best candidates for the job but also to make them stay.
Why does every software engineer want to work at Google? Because they treat their employees better than anybody else.
Competition from Online Firms
Online firms not only have to hire fewer employees, but they also tend to have less overhead in the form of physical locations. While retail firms need to have warehouses as well as retail centers, online firms can settle for warehouses and nothing else.
This gives online firms, such as Amazon, the ability to offer prices well below those of many retail firms.
If you can’t compete with the prices, compete with the experience. By making your store a fun and interesting place to be, you significantly increase the likelihood of people being willing to spend a little extra to be treated a lot better.
People Love To Buy but Hate To Be Sold To
Another major setback faced by modern retailers is that people hate feeling like somebody is after their money.
When an unsolicited salesman approaches a person with the phrase, “Hello, can I interest you in a such and such,” most people will either cut him off or simply respond no, regardless of how interested that person would have otherwise been.
This problem can typically be resolved by arranging your store in a user-friendly manner that calls out to customers so that salespeople don’t have to.
Think about this: When was the last time somebody said no to a salesperson? Okay, and when was the last time a child walked past a Build-a-Bear Workshop and didn’t beg their parents to let them go inside?
In conclusion, there are plenty of ways that major companies can fail and start-ups can rise up to take their place. But what is the common theme that binds the prevention of theft, the increase in retention, and other important challenges together?
If a company is willing and able to adapt to changing market circumstances with the help of eCommerce development company, that company will succeed in accumulating far greater profits than a firm that focuses its business strategies on rehashing the great ideas of the past.