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Organizing the Internal Systems of Your Retail Business

Jan 16, 2019

On the contrary to what popular media might tell you, brick and mortar retail isn’t dying. Why? It is just evolving and adapting to industrial and technological advances. The Retail Industry in the United States is projected to produce $5.48 Trillion worth of sales by 2020 and is also expected to create over 1 million jobs. This is certainly exciting information for small retail businesses.

You can get everything else right from having the right products to getting the perfect store layout, but if your store’s internal systems are not managed properly, it could all be for nothing. You are something as simple as, let’s say, stock getting run out. This blog focuses on how you can organize the most important internal systems of your retail business for optimal performance.

Internal Communication

Did you know that the way your employees communicate with your customers is influenced by how you communicate with your employees? A misinformed employee will pass on the same information to the customer. Every decision and piece of relevant information should be duly communicated to your ground staff. They should also be able to communicate vital information like customer feedback and grievances to the store management without any hindrances. Retailers can follow the below methods to streamline internal communication.

  • Consistent Training: Your employees are first introduced to your store’s work environment on the first day of training. You can use email or an employee portal to share the latest training materials. You can also track the progress of these training programs to know if the required information was learned by your employees.
  • Create an Ego Boost: You can better engage your employees by acknowledging the value and importance of their contributions to your store. This has been proven to improve employee loyalty and reduce turnover. You can do this on the daily pre-shift meetings, through an email or just put up his/her photo in the store as the ‘Star Performer’.
  • Use Technology: Only 11% of retailers use technology to communicate with their employees. With digital platforms, you can communicate with all or specific groups of employees at the same time. This two-way communication ensures that messages serve their intended purposes and that valuable customer feedback has reached you.

Inventory Management

No retailer wants to see customers walking out of their store empty handed because what they wanted was out of stock. If this happens repeatedly, your store’s image will be at stake and you also stand to lose profits and customers. Inventory management should be taken seriously even if you are a small retail business. To make sure that your inventory is under control you can use the following methods.

  • Physical Audit and Spot Checks: This is the most tedious inventory management method, but it is helpful to manage and improve budgets. You don’t have to do this every single day, but you have to do it once in two weeks or at least once in a month. A spot check can go along with the physical audit. You just have to count a few items from your inventory and check if the number matched with what you are actually supposed to have. Any minor changes may just be a counting mistake; but if the numbers are off by a significant margin, it will need some investigation.
  • FIFO & LIFO: First in First Out (FIFO) and Last in First Out (LIFO) will have to be used interchangeably depending on the items in your inventory. Evergreen items may be the first to be added to your inventory but, may not be immediately sold. Trendy items may be added last due to high demand but will be the first to go on sale. If you don’t have immediate cash to stock up such items you can always opt for extra retail business working capital

Shoplifting and Theft Control

Retailers lose $50 Billion annually to theft and almost 37% of it is on account of shoplifters. It left unchecked, this will seriously harm your retail business. The sad reality is that theft can also be committed by your own employees. You can follow the below steps to make sure that you are not losing your inventory to theft.

  • Educate Employees: Your employees are your first line of defense against theft. To prevent theft, you can ask your employees to be extra aware during peak hours, look out for people with bulky clothing & handbags, etc. Something as subtle yet powerful like ‘Inventory is being tracked’, telling them what is being lost and how much can help prevent employee theft from your store.
  • Signs, Mirrors, and Cameras: You can actually prevent theft if you have proper deterrents like signs and mirrors strategically placed in your store. This is because 73% of retail theft incidents are not preplanned. An inexpensive way to use CCTV cameras is to use fake cameras. Real CCTV cameras aren’t very expensive either. A decent multi-camera system with DVR should cost you around $200.

Your store’s internal systems are just as important as everything in the storefront like visual merchandising and store layout. Retailers succeed when the backend functions are perfectly integrated with the front end activities to provide a seamless shopping experience to customers.


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