Retail Management

Why is Retail Management Important?

Retail management is crucial to the success of any retail store. Key to any effective retail management strategy are the individual store managers. They take care of store employees, help achieve sales goals, assist with maintaining customer satisfaction, oversee the daily activities of the retail outlet, and empower colleagues who may be potential retail store managers in the future.

The Origins and Evolution of Retail

The word ”retail” comes from the Old French word “retaillier” which literally means “to cut back, cut off, reduce”. Since the early 15th century, the term has been used to describe the “sale of commodities in small quantities or parcels”.

However, the history of retail goes beyond the Middle Ages (5th-15th century) because its birth can be traced back to the Age of Antiquity (3200 BC-476 AD).

From the barter system, or the old method of directly exchanging goods or services before money existed, to primitive shops, trade centers, and open-air, public markets in ancient Persia, Assyria, and Babylonia, retail has been a practice since the beginning of recorded human history.

From standardized coinage as a mode of payment (around 600-500BC) to the development of banknotes or paper money during the Song Dynasty (12th century), the lucrative business of retailing contributes much not only to a nation’s economy, but to the global market as well.

Merging into the Renaissance (12th-15th century) and the Age of Discovery (15th-17th century), retail flourished in Medieval Europe, where traders set up permanent shops in major cities and periodically sold goods in countryside fairs or market towns.  Trademarks, or any visible sign used to identify a merchant’s goods and distinguish them from others, began to take on a greater importance during this period.

Transitioning from booth-like shops with dark interiors to general merchandising stores with glazed windows, display cases, and service counters, significant retail innovations, including the invention of price tags, occurred during the Industrial Revolution (18th-19th century).

Emerging multi-vendor spaces operating under covered roofs called “shopping arcades” paved the way for retailing in the modern era—department stores, warehouse shops, and retail outlets.

At the dawn of the contemporary age (1945-present), shopping malls shaped the retail experience to be easily accessible and comfortable for people to spend more time in the facility and increase their likelihood of making purchases.

However, the continuous rise of technological advancement established e-commerce, or buying and selling products through online services or over the internet, as a necessary platform of doing business in today’s retail industry.

What is the Retail Management Process?

The process of retail management has evolved from managing a physical store in one location to handling retail outlets around the world, concentrating efforts on virtual shops or online shopping. The retail management process, as we know it today, entails several key concepts in the fields of business administration, finance, and marketing. Here is the end-to-end retail management process to help you get started in the world of retail:

1. Identify the problem you want to solve
   

   Every thriving retail business usually came into existence by solving a real world problem. Success in retail starts by focusing on the problem you want to solve, not on the solution you want to offer. Through intentional problem-solving with the help of root-cause analysis techniques such as the 5 Whys method, retail management wannabes can dive deep into the problem, so they can offer better solutions to solve them.
   Another step in this part of the retail management process is competitive analysis or competitive research. Strategically collecting and reviewing information about the retail business’ competitors can help retail managers determine what about the problem they aim to solve has yet to be fully or easily solved. Finding out what your competitors do can provide a different perspective on solving the problem, giving you an advantage to do what they cannot do or have not yet done.

2. Understand the people you want to help
   

   Once the problem to be solved has been clearly identified, the next step in the retail management process is market research, or gathering information about the consumers’ needs and preferences. At this point in the retail management process, the goal is to validate the reality, impact, and value of the problem you want to solve to the people you want to help.
   To aid retail managers in understanding their customers deeper, practice empathy mapping, or the collaborative visualization used to articulate what you know about a particular type of customer, and create a customer journey map, or the complete sum of experiences that your targeted customers go through when interacting with your retail company or brand.
   Having a deep understanding of the people you want to help enables you to know them better than they know themselves; ergo, you can be best positioned to reach them out, promising and delivering on the solution that can best solve their problem or fulfill their desire.

3. Develop and test your product or service
   

   After knowing exactly what problem you want to solve and who you want to do it for, data-driven and well-informed product development can take place. In developing your product or service, supply chain management (e.g. sourcing and procurement) becomes crucial.
   You want to make sure that in this part of the retail management process, you have the high-quality materials for the most reasonable price, so you can make your product or deliver your service in the most cost-effective way.
   Anything new has to be tested in order to measure its effectiveness, and your product or service is no exemption. Test results can help you discern the strengths and weaknesses of your products or service, leveraging on what you can do best to solve the problem of the consumers. Getting feedback through customer satisfaction surveys can help the retail management improve the product or service by aligning with their customers’ wants and needs better.

4. Address all legal and financial matters
   

   The moment you believe your product or service is ready to go out into the world and be used by the ones you created it for, regulatory compliance comes into play. Before going to market, the retail management needs to deal with all the necessary compliance audits, safety inspections, and quality certifications, especially when it comes to product labeling for international retailers.
   In today’s retail industry, cyber security and consumer privacy becomes a compliance risk which the retail management should address. Financial concerns such as adhering to the suggested retail price, paying sales tax on products and services sold in certain states, and more should also be addressed by retail managers, especially when the retail business has physical store locations, back office systems, and in-store staffing.

5. Specify and prepare administrative needs
   

   Even upon settling the legal and financial areas of the retail business, the retail management still has to consider and manage the manpower needed (e.g. sales representatives, customer support, training and development) and the communication channels established, or the media touch points you will have with your customer based on their journey.
   Inventory management, or the supervision of the flow of goods from the manufacturers to the point of sale, should also be taken care of-from overseeing restock levels to preventing under-stocking and overstocking.
   At this point in the retail management process, set up your retail brand for success by organizing retail logistics, or product movement and demand management, visual merchandising, or the practice of displaying products in a way that makes them visually appealing to maximize sales, and reporting metrics (e.g. units per transaction, average transaction value, sales per category or sales per employee, gross profit versus net profit).

6. Promote your retail brand, product, or service
   

   With all of the planning and preparations, it is only at this point in the retail management process that the company or brand can launch, offering its real world problem-solving solution. Marketing, or the strategies for presenting offerings that have value for customers, including advertising, the activity of placing online and offline store advertisements, should be employed to drive awareness toward your products and services, generating sales from your target audience.
   Pop-up shops, retail collaboration, and special in-store events can also help attract customers and drive sales. Other retail sales strategies include effective communication training for your store employees, curating your best stocks to provide consumers with the best transnational purchases they can make, and cross-selling or up-selling for improving customer retention or encouraging return customers.

7. Always ensure continuous improvement
   

   If retail managers really think about it, there is actually no end to the retail management process as they should continuously improve how they do business in order to thrive in the market. The retail management can know what to enhance about their operations when they simply adopt an agile approach to retail, taking an informed risk of how to boost retail sales, doing more of what works, and learning from what doesn’t work.
   Without continuous improvement, any retail company or brand will not survive. Retail managers can try expanding their product or service offers, re-targeting their audience, and more, depending on the size of the company, the stage of growth they’re in, the customers they’re helping, the problem they’re solving, and the product or service they’re offering.

Retail Store Manager Responsibilities

Store managers are key to maintaining the profitability of retail stores and their colleagues can turn to them for help with the following:

1. Taking  Care of Store Employees

• Store managers are involved in the hiring, induction, onboarding, training, coaching, and supervision of the store’s staff. The store manager can help in empowering the staff with the knowledge, tools, and skills needed to communicate with customers and do their job well.
• Store managers can help store employees in making make sure that the workplace is safe and compliant with safety regulations and ergonomic to avoid causing injury not only to the customers but also to the staff.
• Store managers can recognize a job well done and provide the commendation that can further inspire an employee to continue doing well. Employees’ areas for improvement are something that store managers can help the staff realize through employee coaching and they can work together to create action plans.
• Store managers can work closely with the store employees and know them enough to be aware of possible absences and make sure that the retail branch is still well-staffed and functioning to meet the demands of the business.
• The store manager can collaborate with the head office on behalf of staff to help address possible employee concerns.
• Store managers can inspire colleagues, lead by example, and boost the morale of store employees to help maintain optimum performance.

2. Taking Care of the Store

• The store’s staff can always ask store managers for help in making sure that the merchandise is properly displayed, there are enough goods in stock, the store’s inventory is constantly updated, and its assets are properly maintained.
• Store managers can assist in monitoring product pricing, keeping track of store expenses, maintaining the set standards for quality, and helping the staff identify items that may not be at par with the store’s standards.
• The store manager’s product knowledge can come in handy in case a store employee is struggling with customer inquiries.
• In cases of customer complaints, a store manager can step in and help colleagues address issues and work together to come up with win-win solutions.
• Store managers can provide direction and offer some tips to help the store’s staff reach sales goals.

3. Grooming Future Retail Store Managers

• Sharing best practices on how to properly interact with customers, showing how things are done in the retail outlet, helping keep the workplace safe, and maintaining a working environment that is conducive to productivity and set to reach sales goals – these are some of the ways store managers can help the retail store produce new store managers.
• One way to help employees set themselves up for success is by giving them proper employee coaching. During employee coaching sessions, the store manager can commend the employee on a job well done and at the same time raise possible concerns and work together to come up with actions plans to address areas for improvement.

Store Manager Skills

According to the UK National Careers Service, here are some of the skills retail store managers should possess:

• The ability to lead and motivate a team.
• Excellent communication and ‘people’ skills
• The ability to work under pressure and handle challenging situations
• Confidence, drive, and enthusiasm
• Decision-making ability and sense of responsibility
• The ability to understand and analyze sales figures

Retail Management FAQs

If you search “why is retail so” on the internet, then you will find that one of the retail world’s most dying questions to be answered is: “What’s so bad about working in retail?” Listed below are our answers to the top 3 most frequently asked questions about working in retail:

1. Why is retail so horrible?
   

   Working in retail can be so horrible for people who find it difficult to accept that the customer always comes first. Retail personnel can often feel deprived of their rights to defend themselves when consumers approach them with their concerns, especially with petty ones. Working in retail can be good for people to develop active listening, effective communication, and conflict resolution.

2. Why is retail so stressful?

   Being in the world of retail can be so stressful because of its fast-paced and ever-changing nature. Work-life balance can be challenging for retail workers as work schedules can adjust unpredictably and work hours can extend instantly. For those whose strength is embracing change, working in retail can be a joy for them, as the pacing energizes them to do more and be productive.

3. Why is retail so hard?

   Thriving in the retail industry can be so hard as the competition is tough, the market is vast, and if you don’t innovate fast enough, then your retail company will soon die. It can all the more be difficult when unexpected business disruptions such as the COVID-19 pandemic limit or completely put your entire retail operations to a halt without any assurance of when you can reopen in full capacity. For those who like to do hard things, you can flourish in retail.

Retail Store Operations Best Practices

While working in the retail industry can be stressful and difficult at times, retail managers can do more than just keep up—they can be excellent and stay on top. Here are some best practices for retail managers to optimize their store operations:

• 5S Lean Store Design and Layout
  

  To keep retail stocks fresh, store managers need to create an environment where goods can be easily seen and accessible, ideally within their reach or a few movements away. 5S Lean is a set of organization principles that retail managers can apply to the store’s design and layout. Implementing the 5S (Sort, Set in order, Shine, Standardize, and Sustain) in retail stores can help focus inventory and shelf space on what can turn quickly, both for online and offline sales.
  To help retail managers get started on a 5S lean store design and layout, download and use the following 5S audit checklists for free. From decluttering the service counter to displaying only what’s necessary, a 5S lean retail store can keep stocks moving. They can also try a free 5S audit app to save time drafting and filing reports, visualize data, and boost efficiency in your store operations.

• The Daily Back-Front Approach

  Retail managers often worry about product inventory—from ordering merchandise and receiving stocks to pricing and handling goods—so they usually remain behind closed doors and only come out when things start turning sideways. While a part of their responsibilities, retail managers can also practice the back-front approach of store operations every day to take a proactive approach toward retail management.
  By doing a daily walkthrough from the backroom, checking cleanliness and orderliness, to the sales floor and the storefront, looking out for restock levels and customer engagements, retail managers can make their presence felt, boosting employee morale and get a more accurate picture of in-store proceedings, catching improvement opportunities.

• World-class Customer Experience

  The customer isn’t always right, but they should come first. If your retail operations aren’t centered on providing the best shopping experience for your customers, then you can expect to close up shop sooner than later.
  It can all start with a general retail audit, where you evaluate the store, employees, and processes and check if brand merchandising is up to standard. When retail managers get the baseline right, they can get the intricate aspects right more easily. Building the discipline of consistent store opening and closing inspections help make sure that the customer can have everything they need before they enter and leave the store.
  One of the best ways to offer a great customer experience is through personalization. Greet them by their name, ask them about their family, and open up to them, especially for your return customers as studies have shown that they buy more than new customers and overall keep your retail business afloat.

The Future of Retail Management

Many retail professionals think that retail management will soon entail virtual reality shopping, where the customer can visit their favorite store, view their products, interact with the staff, and make a purchase, but never leave the house. Others say that there will be less waste and that everything about retail will be simplified—from the displays to packaging to inventory.

Whatever the case though, the world of retail will continue to evolve and the premise remains true as it always has been—the problem you’re trying to solve for the people you want to help. We don’t know exactly what the future of retail management would look like, but when we hold on to this truth no matter how much the times have changed, it will compel us to keep on improving to give the best for our customers.

Today’s retail training can be proactive to prepare for what’s ahead better. As long as retail management keeps their customers at the heart of everything they do, together with their properly trained staff using the right Training tools, the retail company or brand will be optimally positioned for innovation.

Retail Management Tool to Optimize Operations