Lower Retail Expenses Without Killing Product Quality
Reducing expenses is an important issue to tackle. On one hand, cutting costs can happen in a variety of ways. But on the other side, you could be sacrificing quality. For many retailers, product quality is non-negotiable, even when cutting costs is necessary. Fortunately, there are cost-cutting methods retailers can lean on that don’t require a sacrifice in product quality. Here, are a few methods for retailers to consider:
Focus on customer retention
For many retailers, customer acquisition is one of their biggest marketing goals. But turning efforts to customer retention could reap more financial rewards, and more importantly, become a cost-efficient way of boosting sales. But that’s not the only monetary benefit. Customers will keep coming back to your store and the amount of revenue earned is likely to increase over time.
Focusing on customer service can turn negative interactions into positive reviews and increase customers. Retailers can improve their customer retention rates through loyalty programs and improving customer services.
There are plenty of operational expenses retailers incur. And while some of these are essential, some are potentially increasing costs without retailers being aware. Take inventory of these expenses and compare their cost to the value they provide to your business.
- Internet, phone and cable: Check for cheaper packages, including promotions or special rates for small businesses, and research whether the same services are more affordable with a different provider.
- Electricity and utilities: Brick-and-mortar retailers can find ways to reduce costs of maintaining their physical business. Lowering the air-conditioner during summers, using energy efficient bulbs and switching off unnecessary appliances can add up to big savings over time.
- Other administrative costs: Depending on your business, this could include payroll services, business travel expenses, benefits costs, etc. Determine which ones are essential and if there are ways to reduce them. And to further cut costs, consider going paperless.
Although it requires some work and investment upfront, automation can be worthwhile. Essentially, if there’s a task that’s repeatable, there could be an opportunity to automate it.
Automation helps retailers save time and effort, which ultimately results in reduced costs.
Data entry, receipt inputs, uploading tracking numbers and many other types of traditional manual entry can be easily automated. Doing this will spare you from having to continue hiring workers as you grow. This also frees up existing employees to contribute to the business in more impactful ways, helping grow instead of simply maintain business.
Data entry isn’t the only task that retailers can automate. Tasks related to marketing, including email automation, payroll, shipping, reporting, invoicing, inventory management and various administrative duties can also fit the bill for automation.
As is usually the case, there is no one-size-fits-all solution for cutting costs while maintaining product quality. Problem-solve the areas where your costs are generating the least value so you have more capital to focus on growing your business.