By Kristjan Vilosius, CEO and Founder of Katana
Retail is not an industry for the faint of heart. It’s one where survival takes grit and determination, and success necessitates innovation and optimization. In recent years, businesses around the world have endured massive supply chain disruptions, global shutdowns, and economic volatility while working to keep inventory moving through their shops to survive.
On top of these external stressors, consumer behavior has changed – spending is erratic, shopping preferences have shifted and expectations for speed and service correlate with the 24/7 nature of our modern world. Recently, a McKinsey study ahead of the 2023 holiday season indicated that bifurcated shopping is on trend this year – from split decisions on splurging to a mix of online, app and in-store browsing. It’s a perfect storm that has forced the retail industry to modernize and diversify everything from sales strategies to payments.
The Modernity Movement
Pure play retail was a strategy that saw success for many years, but, today, having a single channel sales strategy can be a hindrance. Consumers are demanding options – from e-commerce to in-feed social media shopping – and competition for their dollar is at an all-time high. In fact, a recent survey from Boston Consulting Group anticipated that global e-commerce is expected to grow at more than double the projected rate of physical stores through 2027. Retailers around the world are also experiencing the wider impacts of inflation and economic irregularities with skyrocketing costs on everything from goods and services to rent and interest rates, making operational costs rise to astronomical levels.
Adopting a hybrid business model can help retailers utilize the strengths of both traditional and digital sales strategies. E-commerce allows retailers to adapt quicker to consumer preferences, economic uncertainty and rising costs of maintaining brick-and-mortar stores with large footprints. Diversifying business strategies can also help to ensure that customers can interact with brands in their preferred manner, and switch between them, seamlessly. Software that can facilitate shared and real-time data is essential for retailers adopting hybrid models, and it’s important to choose a software partner that can adapt to evolving businesses needs to ensure success in 2024 and beyond.
Cashless Is King (Or Queen)
Digital payment methods are quickly increasing in popularity and retailers have already begun to invest in payment systems that prioritize cashless transactions. In addition to adopting hybrid business models, it’s important that retailers accept the movement toward all-digital payments systems to not only enhance the customer experience with faster and more efficient checkouts, but also reduce operational costs. With cashless payments, retailers can eliminate counting cash and transferring physical funds to the bank, saving employees time and the overall business money.
Optimizing Operations For A Profitable Future
Optimizing operations through hybrid models and digital payments requires integrated technologies to help retailers manage all the moving pieces with real-time insights. From managing sales order volume and tracking inventory to monitoring financial data, cloud-based technologies can help businesses automate reoccurring tasks and streamline workflows to ensure that all aspects are running smoothly and functioning for maximum throughput and efficiency. For retailers with high seasonality, having a robust and connected system in place ahead of peak sales seasons can further boost operations and help employees avoid unnecessary stress. With sales coming in and products shipping out at unprecedented speed, retailers need data that moves as fast as their inventory.
It’s true that technological advancements and consumer preferences have largely dictated the rise of e-commerce and the move toward hybrid business models and cashless payments, but there are plentiful benefits for both the customer and the business when retailers lean in. Optimizing costs through the adoption of seamless integrations and end-to-end software solutions will not only enable sustainable growth but reduce pressure on businesses by offering the flexibility with digital sales channels and payments.
Customers enjoy increased flexibility, too, as the shopping options tailored to their preferences and spending habits aid in brand loyalty and retention. It’s a cyclical benefit loop that starts and ends with modernizing retail operations through the adoption of new technologies. As retailers close out their fourth quarters and look toward successes in 2024, looking for opportunities to streamline and diversify operations will help them stay lean and profitable in the new year and beyond.
About the author
Before Katana, Kristjan was the CEO of one of the largest investment firms in Estonia and had been an angel investor for nearly a decade in technology and manufacturing. He was excited by the impact of these two worlds merging and could see the need for a more modern solution to the outdated business suites of the 90s. With this inspiration, a 10-slide presentation became the beginning of Katana Cloud Inventory.
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