Inventrak Blog

Given the short-term market uncertainty, growth investments are still going to be difficult to justify. Here are some tips for retailers to drive profitability and cost efficiency:

1. Customer Centric Merchandising:

• The key to driving profitability as well as minimizing cost is to invest in products that would be of most interest to your customers.  Here are the steps for accomplishing this goal: read your customers’ recent buying history, find out what products or what attributes of products are popular, assort your merchandise based on these trends.  Remember, always start with low inventory, and adjust the quantity based on your short-term sales.

2. Dynamic Pricing:

• You should look at your most profitable products. What was the initial retail price? How much was the markdown percentage or discount rate that increased the margin earned? Why not try to use a similar pricing strategy for other products?
• Every customer’s sensitivity to pricing is different. Some people are willing to pay more than others for the same product. If you own stores at different locations, you can set up different pricing for the same products to maximize your profit. 

3. Store Workforce Management:

• Planning your workforce based on your sales by hour or by day is cost effective and efficient. You should schedule more people during the peak time and less in other time. In order to continue labor cost minimization, you should adjust your workforce based on your daily or weekly sales reports.

Careful planning and swift adjustments to changes are very important to your business. In this dynamic economic environment, they can help you sustain and ultimately thrive.