Small Business Tips

Top 5 Things to Account for as a Retailer

Top 5 Things to Account for as a Retailer

With greater challenges in market for small retailers, business owners might consider taking stock and selling their shop to their larger competitors. Yet despite these obstacles, the Asia Pacific region has a retail industry that is expected to grow by 2 trillion USD in next 4 years going into 2022.
So, how can you stay in the game as the small player to grow your retail business? Are you feeling anxious from the competitions with juggernauts like Amazon gradually creeping into the Asia Pacific market?
Below we help you tackle the top 5 problems that small retailers face.
 
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1.Managing Inventory
One common mistake that small retailers make is placing large orders with their suppliers to receive bulk discounts, thinking that it would save on expenditure due to better shipping rates and payment terms. However, the more inventory, the more storage space needed and supervision against theft or damage. Buying smaller quantities of inventory more often brings higher amount of cash on hand instead of tying it up in stock. So, what is the best way to manage inventory? To forecast demand.
Forecasting demand in retail involves utilizing existing data to predict and meet the demands of consumer.  By understanding consumer purchase patterns better, more optimal use of warehouse, shelf and display space. Forecasting functionality in Financials 365 is used to create anticipated demand and the forecast is netted against sales and production orders. We have an option on the forecast that determines the type of requirements to take into consideration in the netting process. These data are then fed to a machine learning, Cortana Intelligence.
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After the forecast is produced, user can view and make changes to the forecast such as removing outliers and create measurements of forecast accuracy.  Below we have a screenshot of our Financials 365 software visualising the demand forecast for a conference table.

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The forecast period is valid from its starting date until the date the next forecast starts. The time interval window gives you multiple choices to insert the demand at a specific date in a period. This forecasting functionality would help you keeping the right amount of inventory on hand and further boost profit margins and customer satisfaction.
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2. Pricing and Discounting
Retailers are in business to make profit, but figuring out how to price products may not be easy. The Australian Securities and Investments Commission found that 40% of small business failures in Australia attributed to cash flow problems or high cash use and a further 33% caused by trading losses. Many pricing strategies exist, but which one to use?
In a dynamic environment, prices and costs of items can change frequently. Using Financials 365, you can modify these costs or prices on each item or through batch job. In some cases, you may want to alter the unit price of an item for one customer, a group of customers, or all customers, and sometimes only for a specified period, such as during a campaign. This can be done through Financials’ Sales Price functionality.
Below is the screenshot on how to create sales prices for a customer. Simply fill in the fields with ‘Item No.’, ‘Unit of Measure’, and the agreed ‘Unit Price’. You can also show the Variant Code column and specify the Variant Code if there are several variants of the item. You can also specify ‘Currency Code’ and indicate whether line discount and invoice discount should be allowed.

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In the Sales Prices feature, you have the conditions that must be met before a customer can be offered an individual unit price for a specific item when quotes, orders, invoices, and CR/Adj Notes are set up. For example, the program automatically looks in the Sales Price table to see whether it contains a sales price, sales discount, invoice discount, item discount, payment discount or even
currency discount.
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3. Customer Loyalty
With ecommerce era, customer loyalty is hard to win and incredibly easy to lose. Although small retailers rarely have the resources available to large competitors, small stores should take extraordinary measures to retain shoppers. Study conducted by Stanford University and Microsoft Research suggests that the time between a first mention on social media to a full-blown search trend is relatively short. Real-time technology could help retailer to respond appropriately to conversations, launching new product, promotion to fuel interest around an existing campaign. This means that you need to be able to access your business on the go, regardless of where and when it is.

The key to win customer is by acting fast, gain access to the right opportunities and capitalise on them before your competitor. Small retailer need the speed, relationship, and coordination to seize the opportunity. Real-time technology such as Financials 365 could assist businesses to dynamically adjust their pricing, marketing and overall strategy. Our software enables user to access data from mobile devices in different platforms such as Windows, iOS, Android mobile devices or run it on device’s preferred browser (Microsoft Edge, Internet Explorer, Google Chrome, Mozilla Firefox and Safari). This accessibility allows you to dynamically adjust your competitiveness and relevancy with your target audience at most critical times.
 
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4. Product Return
The Inside Australian Online Shopping report states that since buying online means not seeing the products until they are delivered, returns was cited as the main barrier. To overcome this, online retailers are starting to provide easier returns, more delivery choices and better tracking notifications.
The more seamless and efficient these return procedures appear to the customer, the more likely it is that the customer will rate the company's customer service highly. While this would make customers happy, it can make retailers frown due to extensive return-related process.

It is simple with Financials 365, just create and post a sales return order to the associated sales invoice and it would automatically a posted sales CR/adj note. The sales return order is the central document that allows the user to register a compensation agreement settled with a customer. You can access other sales-related documents and maintain return-related information concerning the customer, the method of compensation, and the items in question. Furthermore, our software is able to assign exact cost reversing automatically by valuing returned item to the current unit cost.
 
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5. Keeping Up with Trends
According to Euromonitor, consumer increasingly shopping online and internet retailing continues to grow in popularity. Between 2012 and 2016 internet retailing value sales per capita increased by 53%, reaching AUD843 in 2016, while value sales of mobile internet retailing increased by 970.5%, reaching AUD236 per capital. With this multi-channel selling trend, retailer should tap this opportunity by having mobile web and perhaps an application as well. Another trend that is happening in Asia Pacific is the increased wealth which translates to higher disposable income to spend on leisure and personal goods. Euromonitor also states that Australia consumers are increasingly demanding higher quality products as well as socially and environmentally responsible company.

The rise of internet and smartphone allows consumers to have become used to having a far greater amount of choice than ever before. Therefore, knowing what is the current trend is important to stay competitive and profitable.
 
Having the software allows in-depth and real-time insights into your business and ultimately delivering the right goods at the right time and at the right cost.

References:
Euromonitor International. (2017, May 19). Consumer Lifestyles in Australia. Retrieved from www.euromonitor.com
Australia Post. (2017). Inside Australian Online Shopping. Retrieved from www.acquire.startrack.com.au