Retail Industry Profitability Drivers
- 10th August 2018
When selling to retailers there are only four ways to improve their profitability. These are:
1. Increase sales
This can be done by in many ways including opening more stores, increasing e-commerce, better in-stock management to increase inventory availability, improved inventory management, selling more to existing customers through loyalty and CRM programs, better analysis to identify trends earlier and optimize prices and ranges.
2. Reduce cost of goods
This is achieved through better supply chain management.
3. Reduce expenses
Technologies like labour scheduling to optimize the use of store associates, space productivity and planogramming advertising and marketing effectiveness all help reduce expenses.
4. Reduce interest charges
Reducing inventory holding is the main way to reduce interest charges.
So, it is worthwhile identifying which of these are relevant to your solutions and focusing on these when demonstrating the Return on Investment of your solution.
If you’d like to understand more about how retailers think, act and run their businesses check out our Fundamentals of Retail e-learning course.
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