One of the major goals for retailers is to be able to expand their business and increase their reach, and one way of doing so is by running multiple stores in different areas. Although this might be an ideal situation and can undoubtedly work wonders for a business and open more opportunities, this is no easy feat to take on. Managing multiple stores requires careful planning; failure to do so can ultimately bring more harm to a business than good. In this article we will break down how to manage multiple stores, including the benefits and challenges it brings.
Benefits of Running Multiple Retail Stores
As mentioned earlier, opening up other stores, especially physical stores, can expand your reach. Compared to online stores, a physical store gives customers the opportunity to see the products in person, and in some cases even try the products before purchasing. They may also get some insights from brand representatives and product experts. A physical store will be able to boost awareness for people passing by and eventually reel in customers through the retailers’ signages and window displays. Businesses can add to this by making use of QR codes to promote their online store and enable customers to shop after business hours.
On the other hand, having multiple stores can also pose multiple challenges, if these are not dealt with properly, they can ultimately lead to more problems for businesses.
Challenges of Having Multiple Stores
One of the first things to consider before opening up another store is the business’ financial capability to do so. Sufficient funds are needed for leasehold improvements, inventory, staff, and additional costs for an integrated technology system – all of which are necessary to sustaining multiple branches. In addition, you’ll need to make sure that you have enough resources to support multiple stores, ranging from physical resources like inventory and supplies to human resources like capable staff members. It’s also a good idea to make use of systems and processes in doing tasks like order fulfillment, accounting, and marketing across all your locations.
Part of having more stores is having to add more inventory on shelves, which can be much harder to track. You’ll need to know which items are popular in which stores, accurately forecast demand, or calculate sell-through rates per product. In addition, you’ll also need to restock products across store locations before their levels deplete, and build a scalable and repeatable process for counting inventory on-hand and reconciling discrepancies.
Checking in on the performance of a retail store can also be difficult. You’ll need a way to track these performances individually and collectively. Things to look out for include store performance based on venue, geography, and store average benchmarks.
These are some of the challenges that a retailer may face in managing multiple stores. To combat them, businesses may implement various strategies to make sure that stores will be running smoothly and maximize the full benefits for your business, which we will discuss in the next section.
Strategies in Managing Your Stores
You’d want to assemble a team of leaders that will take charge in different store locations. Hire capable members that you know can be trusted and equip them with the necessary tools and training that will help them grow and develop in leadership roles, this will eventually apply to other members in your team. Give them a clear set of attainable goals and communicate them well to avoid any sort of misunderstandings. It’s also a good idea to provide them something to work for by motivating and rewarding them for their work; you can set a bonus system that rewards employees for meeting or exceeding sales targets or provide them with exclusive benefits or perks that will encourage them to stay with the company for the long run. An effective staff will ultimately result in maximized productivity and employee satisfaction, which will help improve the business’ performance and revenue.
When running multiple stores, it’s important to keep everything running as intended, even if you won’t be able to directly monitor them. Part of successfully managing them is by establishing standard operating procedures (SOPs) for the business. SOPs can provide clear guidelines for employees in order to maintain consistent results across all of the store locations and provide almost the same experience for your customers regardless of which location they’re at. This can also help you keep track of what’s going on in your stores by checking if they’re in line with the company policies. Similarly, SOPs can simplify the transfer of inventory through standard inventory management and stocking procedures so that employees don’t get confused when they move from one store to another. Plus, you will be able to coordinate activities such as promotions whenever needed. It’s also a good idea to consider the specific needs of each location and tailor procedures accordingly. Key elements of your SOPs may include the following:
- Opening and closing procedures
- Merchandising standards
- Customer service protocols
- Employee handbook and training manual
- Security Protocols
- Safety procedures
- Monetary transactions
- Store layout
- Image and marketing
- Quality control
- Centralization of sales data
Maintaining good communication between corporate headquarters and each store location is a must to keep everyone on the same page on company policies, procedures, and objectives. You may create a centralized system or a cloud-based portal for important information or a means of connection that will be readily available for you and your team. Your teams should have no problem in contacting one another locations when there’s a need to share inventory or ask questions that weren’t indicated in the SOPs. You can also hold regular meetings or conference calls with store managers to check on how things are going and address any issues that may arise. It’s also a good rule of thumb to make in-person visits once in a while to evaluate how the stores are performing and see what can be improved about them.
A centralized system for your data will make reporting much more efficient, being readily available can show you which products are selling well at which locations, and help you make appropriate actions. Being able to keep track of inventory levels will make sure that you will never run out of stock on popular items. An encrypted, cloud-based system will also allow your staff to access data without any interference from other staff members, and help keep sensitive data secured.
You’ll have to keep a close attention on your inventory management for the entirety of your operations and ensure that there’s an optimal level of stocks for each location as well. There will be situations wherein one retail store that has more stocks can supply other locations that have lower inventory levels. With this, a system should be established that will allow swift communication between store locations to transfer inventory efficiently.
Lastly, you also have to consider and maintain relationships outside of your own team. This involves networking with other business owners that can help you keep up with the latest industry trends and practices. You’ll also want to check in with the competition to help you make better business strategies and adapt to the demands of the market. Having a strong relationship with your suppliers will also help you in negotiating better prices, receiving priority service, and even give you access to exclusive offers which will help you even when you’re just starting out in opening another store. Having the same suppliers for all of your stores will also simplify the ordering process and provide consistency in the products’ quality.
These are only some of the few things that you can do as a business on a foundational level. To take it a step further, you can make use of software and technology like a POS system to help in managing multiple retail stores effectively.
How a POS can help your retail store
In the most basic sense, a point of sale (POS) system essentially processes and records transactions whenever a consumer purchases a product. Thanks to technological advancements, the right POS system can do more that will be deemed essential in a retail store’s day-to-day operations. This is especially helpful for businesses that operate across multiple stores.
Adding to the points raised in our previous section, a POS system can help your business in maintaining connection through inter-store transactions, unification of inventories, centralized management of data, and much more. The right POS systems can notify you whenever stock levels are low, which will be helpful once you are at your reorder point and even provide you timely minimum order quantity (MOQ) suggestions based on previous sales or recommendations from the management. More advanced systems can also help you come up with special serial numbers that help you keep track of every item that goes through your store.
A POS solution will also allow you to check in with unified reports and data analytics by showing you how the business is doing as a whole and how individual store locations are performing. You can also configure staff roles and permissions to customize who is allowed to do certain actions within a store. This is helpful if you want a manager’s approval first before a sale’s associate processes a return, refund, or discount.
Conclusion
Managing multiple retail stores can definitely be a challenging step to take for any growing retailer, but when done right, it will be beneficial in establishing the business and reaching more customers. In this case, a POS system can help ease operations between multiple locations.
