A Comprehensive Guide to Retail Management
I think I can speak for all store managers when I say that managing a retail store is no piece of cake. Brick-and-mortar retailers are especially facing competition from a rapidly growing e-commerce industry, along with all of their usual responsibilities.
In this article, we look at the evolution of retail management, the responsibilities of those in the retail management industry, and some frequently asked questions.
Overview: What is retail management?
Technically speaking, retail management is the combination of all processes and actions that drive a store’s retail sales and maintain a good level of customer satisfaction.
These processes include:
- Logistical planning
- Recruitment, staffing, and training decisions
- Retail inventory management
- Procurement of retail software
- Management of retailer promotions
- Devising pricing strategies and cross-selling approaches
These responsibilities are usually carried out by a retail store manager.
The retail industry has been through many changes over the years, but its origins trace all the way back to when people exchanged and bartered produce and animals -- and these things even acted as currency. The first recorded form of currency, the shekel, extends back to 3000 B.C. in Mesopotamia. The earliest form of retail stores originated in ancient Greece.
From Mom-and-Pop stores to department stores and shopping malls, and, most recently, e-commerce and social media selling, new retail models have constantly been emerging and evolving according to trends and generational shifts. As a result, the face of retail management is constantly changing.
4 things retail management is responsible for
Those in retail management positions are ultimately responsible for all of the day-to-day operations of retail stores. However, below are four of the most important responsibilities they have.
1. Inventory management
Retail inventory management is the practice of making sure the store has the right products in the right quantities and at the right time.
Nowadays, stores heavily rely on retail POS systems to help them manage inventory. Done correctly, good inventory management drives sales, provides a great customer experience, and helps reduce unnecessary spending.
Retail managers are responsible for overseeing inventory via POS technology, which is able to update inventory levels in real-time as sales and returns are made, stock is received, and items are moved between locations. They’re also responsible for implementing an inventory management system that tracks inventory across a certain period of time.
Inventory management also directs retail managers to make smart business decisions, such as how to prioritize inventory orders based on popularity and monitor important inventory metrics.
2. Employee management
Employee management is a central task of retail management. Aside from maintaining the correct staffing levels and hiring employees who have the right skills for the job, retail managers are responsible for making sure each employee is fully trained in all aspects of the business.
- Training staff members on relevant software or technology. Sure, your employees can master ringing up a sale, but can they successfully process mobile payments, or use a virtual terminal for card-not-present payments?
- Making sure employees are knowledgeable and up to date on products, promotions, and discounts. Nothing puts off a customer quicker than a sales employee who knows less about the product than they do.
- Scheduling staff effectively. Retail managers must plan well ahead for shifts in seasonality and make sure there is a fair vacation time policy.
3. Store layout design planning
Customers are reluctant to enter stores that look untidy, have too much going on, or have terrible lighting. Store layout designs are incredibly important in attracting new and repeat customers, and this task also falls under the remit of retail management.
Here are a few things to keep in mind while planning a store layout design:
- The store’s traffic flow: Maybe a one-way system makes sense to you, but for retailers, this could make a difference between a customer choosing to enter the store or passing on by. No one wants to feel rushed or be blocked in while shopping.
- The checkout area: Don’t place it near the fitting rooms or too close to the entrance or exit.
- How layout can deter shoplifting: Giving employees maximum visibility and line of sight to the floor of the store, along with reducing large groups of products, helps protect the inventory from theft.
4. Setting sales goals
When setting sales goals, retail managers usually take the following into consideration:
- Historic sales data
- Scheduled promotions throughout the year
- External events (for example, the COVID-19 pandemic is changing retail goals for 2021)
Many in retail management use the SMART method or planning, which looks like this:
- Specific: Be specific with financial sales targets.
- Measurable: It should be easy to measure the progress of your goals.
- Attainable: Be realistic when setting goals. Check historic data and consider how external events could affect them.
- Relevant: Your sales staff need to know how these goals fit into their own.
- Timely: Choose a realistic time period within which to achieve these goals but not so extended that it causes employees to lose interest.
Retail management is a combination of many strategies that aims to drive sales, and, most importantly, to delight customers. Without successful inventory management practices, for example, customers are disappointed when they can’t purchase what they need. Likewise, without adequate staff training, customers are frustrated when they can’t get the help they need when shopping.
In short, without retail management, retail stores would be unable to function.
Retail management processes evolve alongside the retail industry. Since we’re still in the throes of the coronavirus pandemic, it’s difficult to accurately predict what’s in store for retail management, but we do know that it’s incredibly important for retailers to remain adaptable and pragmatic. You can find more about retail and COVID-19 and beyond in this article.
No matter how small your business, you can benefit from using a retail management solution to help manage your customers and employees, drive sales, manage inventory, and provide reporting analytics. Investing in retail management software doesn’t necessarily require a huge investment -- in fact, some solutions, such as Square for Retail, are free to use.
The future of retail management
One thing’s for certain: Technology will continue to play an increasingly important part in every retailer’s journey. Artificial intelligence and automation technology have already massively disrupted the retail industry, while the focus on data analytics continues to drive smarter decisions that improve operations and the customer experience.
Those in retail management positions will be at the center of managing the impact of these changes.
Technology aside, customers want a deeper connection with brands. It takes more than a bargain to get customers on your side, with the customer experience solidifying loyalty and driving sales. Retail managers will need to find new ways to compete with rivals, especially during uncertain periods of time.
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