Building a retail chain is an indispensable method for a successful retail business. However, the increase in the number of stores has caused many difficulties for the manager. The question is how to manage retail chains effectively. With the pivotal experiences Navigos Search shares below, you will assuredly succeed.
1. Common problems when managing retail chains
When expanding the retail business system, many businesses have encountered difficulties in managing and operating chain stores. The following are some common problem:
Non-uniform control of source quality
When doing branch chain business, resources will be scattered, and many factors affect the quality of your products and services. Goods transportation and inspection process is the most time-consuming part of the retail business. Poor quality of input sources will affect the service quality of enterprises.
Therefore, the product quality will not be guaranteed if not closely monitored from import, transportation, storage, and distribution.
Many problems occur in the management stage
Difficulties in human resource management
The geographical distance between stores makes it difficult for managers to monitor staff closely throughout the system. Therefore, many stores face the problem of staff serving inconsistent quality and being dishonest, causing significant business losses.
Besides, the staff's skill is also one of the factors determining whether your company can retain old customers and attract new ones. Especially in the service industry, customers often evaluate and compare the quality of new branches with the one of the main store. Therefore, the manager must train employees well enough so that they can take on the same responsibilities at the new branch.
Ineffective financial management
As the scale expands, effective financial management will become a troublesome issue for businesses. Profit and loss management, assets, investment performance, and cash flow management are financial metrics that retail managers have to solve.
As the number of branches increases, all these costs will also multiply. They are not a small number, which can increase financial pressure and capital recovery pressure on the sellers. Therefore, if you don't have a solid financial source and don't know how to manage your finances effectively, it's a challenge for you to cope with possible bad situations.
Difficulties in collecting and managing customer data
Ways on how to manage a large number of customers system-wide and collect and manage information of all customers handily and conveniently is always a problematic issue for managers.
2. Effective retail chain management solutions
With strong potentiality on the way to dominating the market, businesses can invest in expanding the chain of stores. This is a golden opportunity for businesses to attract more potential customers and earn huge profits. However, it is not easy to manage a retail chain. The management activities of the store, finance, and source of goods will overlap without an appropriate model.
Therefore, finding effective store management solutions is remarkably crucial if retail businesses want to stand firm and develop in the market.
Standardization of operating procedures
As a manager, you must ensure that the stores are run smoothly. However, in reality, you cannot keep an eye on all the stores simultaneously, especially when they are in different locations.
Therefore, the standardization of operating procedures is an urgent matter that needs to be done right from the moment of opening the chain of stores. This process needs to be done uniformly in all chain stores, from working hours, customer service, discount policy, and return policy. You must ensure that customer experience is the same in all stores.
Chain store financial management
Financial management is the cash flow management in the production and business process of an enterprise. Effective financial management will help businesses optimize profits, including capital and sales management.
The three financial indicators that businesses need to manage are:
- Cash flow index: Include cash inflow and outflow. Businesses must control cash flow to mobilize if needed.
- Profit and loss index: Include sales, cost of goods sold - the amount the store owner pays to suppliers, gross profit, gross profit on sales, net profit on sales, store budget, etc.
- Investment assets: Include inventory, debts to regular customers, fixed assets invested in the store, tools used in the store, and total sales on assets.
For effective financial management, you can refer to some methods below:
- Understand the financial situation of store chains by making reports and monitoring closely.
- Adjust the revenue and expenditure mechanism reasonably, and cut input costs.
- Actively seek and access investment capital in the financial market.
- Save and cut costs lost during operation.
Human resource management
The cause of loss of goods and reduced revenues in some stores is partly due to dishonest employees. The business owner can't be at all locations to check the performance and mistakes of the staff. The question is how to manage all employees effectively throughout the system.
An effective way to manage this problem is to set up a retail chain management system or use sales management software. Through that, business owners will handily administer and monitor all sales-related activities of employees without spending time observing.
The data changed on the software also helps managers easily control the invoices created by each employee, raising the awareness and responsibility of each sales staff in the system chain.
Regardless of the system, businesses should also actively train quality personnel and wholeheartedly aim for further business development. Only in this way can the whole business increase sales, boost profits, and develop sustainably.
Effective human resource management
Customer management
Customers are always the top goal of retailers. Businesses not only provide the top-notch products and services but also have to pay attention to the personal information and frequency of customers' purchases to organize promotion and appreciation programs.
According to the experience of retail chain management from many units, customers tend to want to receive wishes and small gifts on special days such as birthdays or holidays. However, data management will become difficult as the number of customers increases.
To solve this problem, you should use customer information management software at stores. This software allows storing a large amount of customer information, clearly dividing the loyal customers, and evaluating the effectiveness of marketing campaigns through statistics of sending SMS, emails, etc. Since then, customer data management will be easier and more efficient.
Commodity control
The transportation and inspection of goods between locations is the most costly and time-consuming part of retail operations. Controlling product quality, stabilizing selling prices, ensuring products are sufficient, plentiful, and suitable for each business location, and meeting customers' needs are essential. If businesses don't control goods timely, it will affect customers, service quality, and the store's sales.
Therefore, the management solution is to use support tools or sales management software to control the actual quantity of goods at the locations. Since then, the transportation of goods between stores is no longer troublesome, complicated, and can be done more quickly.
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Strict commodity control
Competition in business is always a problem that retailers will have to face. If retailers don't have strategies and secrets, they can't stand firm in the fiercely competitive market. Through this article, Navigos Search hopes you will have more solutions to manage your retail chain effectively.
Navigos Search is the number 1 recruitment agency for middle and high-level personnel in Vietnam today. We are ready to assist in recruiting professional retail chain managers for your business at any moment. You can contact us as per the information below:
- HCM Headquarters: 20th Floor, e.town Central Building, 11 Doan Van Bo, Ward 13, District 4
- Hanoi Branch: V. Building - 125 Ba Trieu street, Hai Ba Trung District
- Hotline: 1800 585 826
- Email: contact@navigossearch.com
- Website: navigossearch.com
- Fanpage: facebook.com/NavigosSearchVietnam
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