6 Ways Savvy Retailers Can Boost Their Profitability

While turnover and revenue are vital metrics for any retailer, your profits are key to your success. In this article we’ll take a detailed look at six ways to boost retail profitability and how OpSuite Retail Management Solution can support your efforts.

1. Sell more to your existing customers
2. Be smart about purchasing
3. Plan ahead
4. Discount wisely
5. Reduce operational expenses
6. Empower staff efficiency

Sell more to your existing customers

Many studies have demonstrated that selling to existing customers is more profitable than acquiring new ones, in fact it’s reported that it costs five times as much to attract a new customer as it does to keep an existing one. It therefore stands to reason that your existing customer base is one of your most valuable assets and neglecting them could be a costly mistake.

Showing your repeat customers some love through a loyalty scheme will not only build their devotion to your brand but will also have a positive impact on your sales as they return time and time again to redeem loyalty offers or points.

OpSuite’s loyalty features enable retailers to create multiple loyalty schemes and market to them directly with personalised offers.

Be smart about purchasing

Every purchase impacts on your cashflow and ultimately on your profitability. While ordering in large quantities might earn you some price breaks or bulk discounts, it can become a false economy if you then have to pay for more storage space in which to house your inventory. And, if you find yourself overstocked you may have to cut prices in order to sell through stock which diminishes your return on investment and erodes profits.

The most effective way to manage your stock is through an inventory management system which integrates with your point of sale. This connection provides instant data on how your stock is moving (or not moving!) and can help you identify the most efficient reorder points so you avoid overstocking and preserve your cash.

With OpSuite’s inventory management and purchasing facilities retailers can make informed decisions on how and when to replenish stock and identify slow movers, transfer stock between locations and schedule purchase orders from a single interface.

Plan ahead

It’s common for retail businesses to experience seasonal peaks and troughs and it’s vital that business owners can predict these and stock their businesses accordingly. If seasonal sellers are understocked you risk missing out on vital sales, while overstocking wastes crucial cash and eats into a product’s average selling price (ASP).

With accurate and up-to-date sales reports, retailers can make better purchasing decisions on seasonal items, ensuring they stock appropriately and avoid the need to discount products later on.

OpSuite’s comprehensive suite of sales and inventory reports enable businesses to plan ahead for peak times, ensuring their stock profile matches seasonal trends and that they staff their business appropriately.

Discount wisely

It may go against perceived wisdom, but discounting can boost profitability if done wisely, for example when used exclusively for those customers who require a bit of an incentive to make a purchase.

Instead of decimating your profits in one fell swoop with a publicly available discount, a carefully targeted offer can entice those shoppers who would never purchase at full price. By sending a bespoke discount to this specific group, you can boost overall sales while maintaining your recommended retail price (RRP) across your primary audience.

With OpSuite’s CRM and marketing features retailers can segment their customers by spending habits and send targeted marketing campaigns using MailChimp or SendGrid.

Reduce operational expenses

Incredibly, a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales, so making operational savings across your business can have a significant impact on profitability.

Common areas of overspend in retail include:

Staffing

Overstaffing can sap your profits so it’s important to staff your business as lean as possible without affecting the customer experience or risking their dissatisfaction. A retail management solution such as OpSuite which highlights your busiest periods can help you to plan your rota more effectively.

Packaging

Providing excessive or overly ornate packaging may look nice at the point of sale but it can soon add up. It’s also not ideal for the environment so consider reducing packaging and looking for environmentally friendly alternatives which are often much less expensive.

Energy

High energy consumption through heating, lighting and electronic devices is common in retail as stores strive to provide a comfortable, well-lit environment which shows off their products. However, energy prices are higher than ever and this can have a big impact on your profits. Consider energy-efficient alternatives such as LED lighting and turning the heating down a couple of degrees.

EPoS Technology

The older your EPoS hardware, the less energy efficient it is likely to be. As EPoS hardware is the most used piece of tech in a store, it’s important that it’s not sapping energy and costing a fortune to run. A tech upgrade could save you a small fortune on your bills.

Empower staff efficiency

We’ve mentioned effective staffing, but empowering individuals to be more efficient by increasing their output can also have a significant impact on your bottom line.

According to the Harvard Business Review businesses lose 20% of their productive capacity to organisational drag, which is “the structures and processes that consume valuable time and prevent people from getting things done.”

While proper training can go some way to solving loss of productivity, your business’ processes and procedures may be partly to blame. Automating as much of your business’ day-to-day through the use of technology can help. For example using integrated payments so staff can move on to the next sale quickly instead of manually entering payment details (and risk making errors), or providing staff with mobile devices so customers can be served on the shop floor.

BONUS TIP – Be found online

Despite 87% of people starting their shopping journey online, most customers still prefer to buy in-store.

Near St is a local marketing solution designed to drive online shoppers in to your store and automatically shows your products across platforms like Google and Facebook so they are more easily found by shoppers looking online. It’s easy to set-up and integrates seamlessly with OpSuite.

NearSt helps you to attract new customers, serve existing customers and provides a real-time view of what local shoppers are searching for so you can refine your business to meet their needs.

Key Takeaways

As a retailer you have one objective: to sell your products. While increasing sales is your ultimate goal, it shouldn’t be at the expense of profits. The tips shared in this article are designed to ensure your business is as profitable as possible and having the right technology in place should play a significant part in your plan.

OpSuite is a favourite choice for large and small retailers who want to increase profits, reduce costs, streamline business processes and create a seamless customer buying experience across all customer touchpoints.

Why not book a discovery call with a member of our expert team and find out how OpSuite can support your future success.

Call us on 0800 138 0050 or get in touch here.

Why choose RMS?

RMS have worked with ambitious businesses for over 18 years, supplying tailored software solutions and EPoS hardware throughout the Shetland Islands to the Seychelles. We work with businesses in most retail verticals, contact us and discover how we can support your business to increase profits with the latest technology.