In the current economic climate, inflation has become a significant challenge for retail businesses. To maintain profitability, businesses must employ innovative strategies to safeguard their sales against the impact of inflation. However, by implementing the latest stock control and retail ERP software, businesses can minimise the impact of inflation, which is why Eurostop has collected some insightful tips for you here.
5 Tips for Safeguarding Your Retail Sales from Inflation
1. Modify Your Offerings
One great way to stay on top of the competition during periods of inflation is to change up your offerings. This means making adjustments to your goods/services based on customer demand. It’s also important to determine what your best-selling items are and give them more prominence. Segment products, channels, and customers based on value, price sensitivity, and costs to serve, and apply different pricing strategies accordingly via your ERP/stock control software.
2. Investing in Marketing Tactics
Developing a strategic marketing plan has a host of benefits but it is particularly pertinent during a recession. With inflation and the current cost of living crisis, soaring energy costs and increasing mortgage rates, many consumers are understandably reviewing their budgets and proceeding to spend with more caution than before. Here is where really understanding your audience and their pain points can allow you to focus on content that convinces them why they need your product and should continue to invest in your brand. Depending on your offering, you may have products that are cost effective, but strategies can also involve promoting durability or how they can use your products to do what is important to them right now. For example, when customers might be looking to spend less on items that they may deem as non-essential and cutting back on entertainment costs, lifestyle retailers may consider focusing on highlighting how home décor can make their homes a cosy place to spend time. Increasing the perception of your product’s worth can go a long way to maintaining or even increasing revenue.
In addition, you can use your ERP and stock control systems to help analyse the effectiveness of your campaigns so that you can adjust accordingly for maximum impact. Loyalty systems and schemes can also help to convince customers that they are getting more value for their money.
3. Reward Current Customers
Another great way to adjust your operations for inflation is by rewarding current customers or new ones via discounts for referrals and loyalty programs. For example, discounts for repeat customers will not only help you keep your current ones but also attract new ones. ERP systems make it easy to strategically offer, setup and synchronise these types of discounts across your selling channels and POS estate; as well as keep track of customers’ buying habits.
4. Cut Costs When Possible
Modern retail ERP software can assist with keeping running costs down in a number of ways. They include:
Helping retailers to avoid over or understocking their shelves so that they have the right stock in the right place according to demand. By being able to report and know how your products are selling in all locations is essential, allowing you to allocate correctly and make best use of your capital. Having excess stock is not cost effective and can also incur expensive warehousing costs. On the flip side, stock outs cost the business both in terms of lost sales and negative brand perception when customers are left disappointed.
Knowing where your stock is and being able to keep an accurate track of stock movements can also reduce the chance of missing an all important potential sale. If a popular product, size or colourway is selling out in store, a stock control system can allow your staff to find out where the item is in stock, preventing customer disappointment, or purchasing from another retailer.
Using the right technology to monitor and control your stock also provides an opportunity to quickly identify any discrepancies that might indicate waste or shrinkage, allowing the business to remedy the situation as quickly as possible and minimise costs.
5. Use Your ERP System to Implement Active Pricing
During inflation, your retail store can adjust your pricing strategy accordingly to remain competitive by implementing active pricing structures. ERP software can provide key insight and analysis to be used to assess a retail establishment’s pricing potential, then prioritise their prices accordingly.
How Does Inflation Impact the Retail Sector?
Inflation impacts the retail sector when the cost of materials or supplies rises, resulting in higher prices for consumers. This means your customers have less money to spend on certain items. However, interestingly inflation isn’t always a negative thing in terms of the retail sector and can often result in:
A Broader Audience: When the value of the currency in other countries is lessened, it can create an influx of tourists and travellers to seek more retail stores abroad because they’re cheaper.
Enhanced Revenue: Often, when overall prices are on the rise, consumers tend to spend more on items that appear to be high quality even though they’re more expensive.
Added Foot Traffic: Inflation can also result in increased foot traffic to retail stores that offer deals and discounts, as consumers become more price sensitive. ERP solutions can be useful in this regard, as they enable businesses to provide buying incentives and promotions more easily.
How Eurostop Can Help Your Retail Business Guard Against Inflation
As one of today’s leading retail ERP providers, Eurostop can help your business adjust to guard against inflation in a number of ways. As customers’ preferences change and the rising cost of living is affecting consumer habits, our ERP/Stock Control system can provide your business with in-depth information right down to SKU level, giving you invaluable granular insight. Advanced tracking and reporting can help you to determine what products lines are selling best, who’s buying them and offer key forecasting insight.
The ERP/Stock Control solutions from Eurostop help you maintain central control of your retail business regardless of size, channels and number of locations. It provides easy implementation and can be connected with everything from SAP systems to online channels such as Magento. You can also receive real-time stock and sales visibility from multiple locations and across all channels. These tools enable retailers to optimise their stock and maximise sales.
Furthermore. our stock control solutions are designed to provide you with extensive analytics to analyse transaction ratios, determine your busiest time of day, and prepare for more influxes of customers during busy sales periods.
In addition to our ERP solutions, Eurostop also offers business intelligence reporting software to help you make informed decisions both short and long-term. The range of reports offered includes export sales, sell-thru data, rate of sale information, stock cover, VAT analysis, turnover, aged stock insight, and much more.
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To learn more about the advantages of using retail ERP and stock control solutions or call +44 (0) 20 8991 2700 for a no-obligation demonstration.