Pain Points for the Traditional Retail Industry
After nearly 20 years of rapid growth in the traditional retail industry, as more and more competitors join and online stores are born, the speed has begun to slow down, and the era of high competition and low growth has arrived. While traditional retail growth has slowed down, the online retail industry has ushered in explosive growth.
Consumers are increasingly inclined to shop online. Coupled with new retail models such as unmanned supermarkets, the survival of traditional retail is even more difficult. The online store is better than traditional retail in terms of product richness, price, product display and after-sales service.
Traditional retail industry also faces pain points such as slow administrative speed and high labor costs. Of course, traditional retail is not useless. Product experience and immediate receipt of goods still have natural advantages compare to online retail industry, so to survive in the highly competitive retail industry, the traditional retail industry must solve pain points and improve its competitiveness.
Solutions for Solving the Pain Points
1. Introduce Point-of-Sale System to improve Efficiency
Importance of Operation Data
In the era of big data, data is the most important information. Chicago-based management consulting firm McKinsey & Company once said, “Data has penetrated into every industry and business function area today and has become an important production factor. The mining and application of massive data indicate a new wave of productivity growth and the coming of consumer surplus.” Even the leading US retail company Wal-Mart is committed to collecting and researching consumer data, hoping to develop a consumer-centric business model that reduces resistance to consumer shopping. However, it is difficult for the traditional retail industry to record the details of each transaction, such as purchase time, buyer, purchase amount, product category, etc., and these data are particularly important in the era of big data because they can be used to analyze consumer behavior and create the corresponding marketing strategy. In addition, it is difficult for the traditional retail industry to record special circumstances such as discounts, employee benefits, VIP programs, etc., which restrict marketing in disguise. Furthermore, this mode is slow and manual recordings are prone to errors.
Digitized RetailTherefore, the introduction of the Point of sale system (POS) and the implementation of the POS system is the best way to solve the above problems. The company uses a barcode management system, and cooperates with other daily operation equipment such as scanner, shroff printer, credit card readers, etc. It can improve efficiency and shorten checkout time. The survey shows that using POS system can reduce the man-hours of processing the store by 30%, and also reduce the chance of human error. In addition, the most important thing is that the POS system will automatically store each transaction record, and then generate a report, so that the company can analyze the data, such as which period of time has more customers shopping, which products have higher sales, which products have lowest sales, etc., Thus the company made relative marketing strategy such as restocking more popular products, promoting low-sales products, and so on. In addition, the POS system can also quickly cooperate with the company's sales plan, such as modifying product prices, launching VIP offers, and so on. Therefore, the introduction of the POS system can significantly improve the company's efficiency, save costs, and improve competitiveness.
2. Reduce cost of operation by using Inventory Management System
For inventory, the introduction of the inventory management system is similar to the introduction of the POS system. At present, the traditional retail industry needs to invest a lot of manpower in inventory management and inventory procedures. In some industries, such as jewelry stores, it is necessary to introduce variety of products. The step of checking inventory will become very clumpy, and the manual checking is also prone to errors. Therefore, introducing an inventory management system can effectively solve this problem. Integrate the inventory management system with the POS system streamlines the management process. For each item sold in the POS system, the inventory is reduced immediately. It eliminates manpower for managing inventory, greatly reducing labor costs. In addition, management can know the stock level of every product at any time and benefit in restocking. Therefore, the introduction of Point of sale system (POS) and inventory management system can effectively solve the pain points of slow administrative speed and high labor cost, and improve the competitiveness of enterprises.
3. Bonding with customer with Customer Relationship Management System
Due to the lack of a systematic recording of customer transaction records in the traditional retail industry, it is difficult to establish an effective customer relationship management system to maintain customer relationships. Based on the above-mentioned POS system, each customer's shopping habits can be effectively recorded, such as shopping time, preferred products, purchase amount, preferred payment method, etc. As a result, the company can build a customer relationship management (CRM) system based on customer buying habits to recommend different products, establish a VIP system, reward customers with points, discounts, small gifts and other preferential measures to attract customers to repeat purchase, so as to maintain customer relationships and create loyal customers. The survey shows that more than 60% of loyal customers will share product information with other consumers. It can be seen that having loyal customers can effectively draw new customers and create more business opportunities. The CRM system is one of the methods to effectively create loyal customers.
4. Online-to-Offline (O2O), Develop E-commerce
The biggest difference between the traditional retail industry and the online retail industry is that the traditional retail industry has geographical restrictions and can only serve a limited region. The online retail industry is a challenge for traditional retail. However, it is also an opportunity for them. The traditional retail industry can develop e-commerce, establish online stores, and achieving multi-channel retailing, so that consumers can use different channels to buy products. Company can also conduct related sales tactics through electronic channels, such as reminding customers on what products are left in the shopping cart or with the help of the CRM system to up-sell related products based on customer habits. Finally, traditional retail can innovate in content creation, highlighting their its product advantages, and build up its brand uniqueness.
The Bottom Line: Integrated Retail Management
To sum up, digitized retail industry is a trend, and its development will inevitably impact the traditional retail industry. However, the traditional retail industry or physical stores will not be eliminated, as long as the business model is changed and value-added services are provided. Moreover, it is highly suggested to employ POS and inventory management systems to improve operation efficiency as well as reduce costs. Besides, exploring new customers through CRM system and multi-channel retailing. Finally, traditional retail industry should avoid homogeneity and build its own brand uniqueness. Hence there is still room for development and improvement.
The integrated retail management system provided by Natuzero is able to solve all the pain points mentioned above. Combining the above-mentioned POS, inventory management, CRM, and e-commerce system as a single platform, the traditional retail industry can smoothly integrate the e-commerce system into the original operation. Assisting the traditional retail industry to painlessly transform, and establish its own unique advantages. In addition, Natuzero can provide other solutions to meet the needs of different industries such as accounting, human resource management, marketing, etc. Contact us for more.