29.07.2024.
Successful retail today is focused on customer needs. Customers are more informed and educated than ever and are increasingly demanding and sensitive to social trends. Without innovation and renovation, survival is difficult to achieve, and stores compete in offering new products, services, modern equipment and various loyalty programs. The main objectives include increasing sales value, attracting and retaining customer loyalty, reducing costs and increasing profits.
At the same time, modern tools enabled retailers to manage their assortment more efficiently, while Croatia's integration into the EU made it easier for foreign manufacturers to do business, thereby further increasing competition for domestic companies. Although the entry of large international chains represents a great challenge for small shops and domestic retail chains, the need for small formats and local stores remains undeniable.
Improvement of assortment
The key question for all retailers, especially smaller ones, is how to deal with the competition and achieve profit at the same time. Retailers often need to simultaneously balance ensuring cash flow, competing with well-organized retail chains and prices in large shopping centres, as well as improving business organization within existing resources, while avoiding drastic investments. It is important to meet customer demands for different products and attractively present the assortment from the existing offer so that the customer can manage at the store better and faster, and at the same time reduce stocks, increase sales results and ultimately, profits. There are many solutions, and small stores have their advantages. Most stores make the mistake of not noticing the need to optimize the assortment. There are several ways that retailers can improve their assortment, and one of them is to organize their existing inventory.
A wide offer is not always the optimal solution
One of the best and fastest solutions is the standardization of the sales area. At the same time, the requirement is the optimization of the assortment. Sorting out the "crowd" in the assortment and optimizing and reducing inventory is the first and especially encouraging step. Inventories are among the biggest financial burdens, especially stocks of non-current goods that remain in the warehouse and on the shelves, blocking significant financial resources. The desire for the store offer to be as wide as possible often exceeds the possibilities of the space.
Overcrowding of the sales area can hinder customers from finding products, resulting in their dissatisfaction and, consequently, unrealized sales. Sometimes customers feel they "can't see the wood from the forest". Customers don't find their way around, often asking for help from the sales stuff, and leaving unsatisfied with their choice. In overcrowded stores it's easy to find mispriced, even expired products. The introduction of a system for monitoring sales traffic can significantly facilitate the management of sales space, as well as inventory.
Key strategies for improving sales results are:
1. Standardization and visibility
Ensure that the sales area is inspected and easily accessible. Items not visible enough on the shelf will not sell, so product visibility is essential. The space between the shelves should be passable, and the sales area should be clean and tidy.
2. Sales data analysis
Use sales data to identify which products customers buy most often and which products are just sitting on the shelves. This will help you make informed decisions about which products should remain on the offer and which should be removed.
3. Removing unwanted inventory
Remove the unwanted inventories, and reduce the assortment in such a way that you can display it on the shelves neatly and in accordance with sales. Free up funds trapped in excess inventory, and strengthen your cash flow and solvency.
Get to know your customer
Before optimizing your assortment, try to get to know your customer. Ask yourself the key questions: Who is your customer and how does he navigate the store? Can he easily find the items he needs? Take care of the environment in which your store is located. What differentiates you from the competition? What ensures your customers' loyalty and why do they return to us? Consider the profile of your customer and their purchasing power, and accordingly discover what represents value to your customer. At the same time, do not exaggerate the extent of the offer. It is not always necessary to have a large number of brands, different types of flavours and all dimensions of packaging. Adjust your offer to the possibilities of the space, the environment and the needs of your customers.
An additional step of improvement is the introduction of online shopping. In the last few years, some customers no longer shop at a local store, instead they shop online. Therefore, if possible, consider introducing or improving your online sales. E-commerce platforms can help expand reach and increase sales, while integration with brick-and-mortar stores can offer customers convenient options such as in-store pickup.
Educated employees are better able to respond to customers' needs
Any improvement is impossible without the additional effort of store employees. Therefore, it is crucial to educate them to independently perceive the needs of customers and sales space and to motivate and encourage them to implement it. The wishes and needs of customers are not always the same, and in order to keep up with changes in their buying habits, regularly organize educational workshops and trainings for your employees. Education not only improves their sales skills but also teaches them to better understand customer needs and provide excellent service. The use of business consulting in the field of retail can significantly contribute to improving sales and increasing profits. Educational workshops and expert advice help retailers optimize their assortment, improve product presentation and improve overall business.
If you want to improve the shopping experience for your customers and at the same time improve your sales results, contact us at pis@pis.eu.com. Our expert team will be happy to answer all your questions and prepare training and consulting tailored to your business!
Read more about our business consulting service here.