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Retail Industry Today

Physical retail shops allow customers and consumers to go through entirely different experiences, still unavailable online. Factors like the smells, sounds, and human interaction that can be found at a store are hard to replace and will likely be a driving factor for brick-and-mortar survival. It is estimated that in 2020, more than 70% of retail sales will still happen within physical stores. In this pursuit of a newer means of doing business, a few fast-emerging trends have the potential to be game-changers for the retail industry. However, the traditional ways of doing operations are proving to be inadequate, and retailers need to find effective and efficient means to ensure efficiency. It is clear that retailers can’t win this new game playing by the old rules

This document highlights the behind the curtain challenges of a retail business across various functions and the key to solve them.

Critical Functions in a Retails Business…

Retail models built solely on the legacy wholesale definition will not survive. To grow in the future, retailers must explore very different offering, selling and operating models. And to win over customers who can buy from whomever, whenever, retailers need to have a clearly defined purpose. Here is the list of Core and Central functions for a retailer;

  • Sourcing
  • Import
  • Local
  • Return
  • Merchandise Management
  • Category Management
  • Marketing
  • Schemes & Discounts (Free Samples, Bulk, Near Expiry)
  • Pricing
  • Daily Movement Trends
  • POS Sales
  • Cash v Card Collection
  • Sales v Cash Reconciliation
  • Sales to Staff
  • Store Management
  • Cash Management
  • Expense
  • Standardization
  • Space/ Shelf Rental
  • Inventory
  • Aging
  • Physical
  • Transfer
  • Category
  • Bar/ QR Code
  • Warehouse
  • Bin Management
  • Inward/ Outward Movement
  • Batch Management

Central Backend Functions

  1. Finance & Accounts          
  2. Fixed Assets          
  3. Human Resources & Payroll           
  4. ERP, POS, CRM, WMS…
  5. Taxation
  6. Compliance

 

Behind the curtain challenges…

  1. Pricing
    • Identification of price change points
    • Impact of exchange fluctuations
    • Multiple prices of same goods at different locations
    • Decision on pricing of fast moving goods
    • Decision of pricing of slow moving goods
  2. Schemes & Discounts
    • Tracking of pre & post schemes benefits
    • Scheme implementation & Display
    • Scheme management & Approval
    • Bulk discount management
  3. Sourcing
    • Daily demand planning covering key factors
    • Seasonality
    • Importation
    • Local competition management
    • Local Supplier management
  4. Inventory
    • Duplicity of inventory
    • Tracking of expiry
    • Tracking of physical inventory
    • Breakage & theft
    • Inventory valuation
  5. Warehousing & Stores
    • Standardization
    • Physical inventory tracking
    • Challenges in bin management & automation
    • Physical price changes in stores
  6. Sales
    • Accounting for revenue
    • POS vs ERP sales analysis
    • Tracking of free goods return while sales return
    • Customer retention
    • MIS on sales
  7. Cash Management
    • Cash collected vs cash deposited in bank
    • Cash shortage
    • Cash expenses analysis at store level
    • Cash theft
  8. Others
    • Store staff payroll and expense management
    • Financial analysis and planning
    • Optimization of import freight and local freight
    • Fixed asset verification & tagging

 

How to overcome the Challenges?

  1. Set your processes and controls right
    Make your business processes and controls to avert risks, gain insight & increase efficiency…

  2. Transform through technology
    Make your ERP, POS, and other business applications align to the processes and the control framework

  3. Adopt to the new 
    Leverage newer methods to automate and analyse the performance of the business and operations 

 

How We can help…

Business Process & Risk Advisory

  1. Identify real issue by performing root cause analysis
  2. Introduce, document, implement and transform business processes identified under issue
  3. Performing area specific audit
  4. Development of SOP & policies
  5. Support in development of MIS structures to track business progress, sales by store, product etc.

 

“Our client has experienced up to 12% efficiency by assessing the pitfalls across the inventory & warehouse management along with a healthy working capital”

 

Technology & ERP Advisory

“Our client is deriving benefit by correcting their SOD, Controls, MIS/Reporting  and successful go-live on roll-outs “      

  1. Identify the functional and control gaps in the configuration
  2. Assess and identify conflicts in the segregation of duties
  3. Selection of ERP/POS/CRM Application and implementation partner
  4. Technology roadmap & project management

Consulting Services

  1. Establishing business intelligence & competency
  2. Adoption of internet of things (IoT) methods for tracking in-store inventory
  3. Finance controlling services
  4. Transformational outsourcing for significant cost reduction with improved overall efficiency & effectiveness

“Usage of beacons has helped the clients in knowing the actual & real time in-store consumption/replenishment of items at the shelf level”