Behind the gleam and glitter of every successful retail brand, there is a foundation of robust operations. Capitalising on innovation in business modelling or the use of modern digital technologies and improved logistical solutions is not possible if the operational planning is flawed. This is where the concept of Standard Operating Procedures (SOPs) chips in.

The benefits of SOP implementation are not restricted merely to operational superiority but also extend to achieving growth in business revenue. This blog sheds light on how SOPs are helping retail brands and businesses achieve upward spikes in their revenue charts.

Pulling the marketing stunts

Traditional brick-and-mortar retailing has reached a stage where it competes with eCommerce and other contemporaries operating via multiple channels. Whether they wish to continue to remain in the physical format or take their businesses online is a different matter. But no retail business can afford to function with loosely-defined operations. And one of the common features among all successful retail brands and businesses is that they operate via streamlined business processes. For example, when a new phone model is launched by a mobile brand and the advertisements go live across various print and digital media, that new product would be already available in the stores. This does not simply happen by fluke. There is a well-planned set of coordinated efforts executed via SOP-defined processes. Every workflow is mapped. Every activity is defined. Timelines are fixed. The standards are established. Every process owner is informed. Nothing is left to ambiguity or chance. And this is also what we do in our SOP consulting services.

2 Twos are Five

Achieving an increase in sales is not the responsibility of only the sales or marketing team. There is a contribution of every team and business function to it. For instance, the marketing team of a retail store may forecast that footfall is likely to increase during the festival season. To reap the benefits of this, the other departments will also have to work in the same direction. Say, the purchase department will have to procure additional stock on time. Where will this inter-functional coordination come from? The answer is SOPs. Through SOPs, it could be ensured that the purchase department takes inputs from the marketing department on time. And the same applies to the marketing department. The marketing team must provide their input to every department so that the recipients can take action on time to give effect to the routine or altered business requirements. When such a level of coordination is achieved on a routine basis, it leaves a strong impact on the correlation between efforts and results that may go beyond achieving increased sales.

Quicker flag offs

One of the most important advantages of SOP implementation is that it helps businesses in their growth and expansion initiatives. As SOP consultants, we always maintain that it is easier to replicate planned and proven processes rather than starting every bit of operational planning from scratch. When operations are made easier, it takes less time for a new store or branch to take off and start generating revenue. It is also easier for new employees in new stores to quickly grasp the operational details and carry out their jobs with higher efficiency and precision.

Say, a departmental store wants to expand to new markets via the franchise model. The onus of providing the operational direction and instructions to the franchisees is on the franchisor. It is the franchisor who must prescribe how the business processes and operations have to be carried out. And this could be about reporting, visual merchandising, planogram, safety and security, IT solutions, employee-related affairs, and so on. Such operational details and guidance are usually transmitted via franchise SOP manuals.

Tech Check

Technology has helped businesses speed up their operations by manifold times. With this came the ability to handle more business volumes with corresponding improvisations in the physical infrastructure. But software products do not come as exactly required by businesses. Businesses have to either customise it or get one developed. In either case, they must know how and what the software is expected to perform and deliver. But providing these instructions requires a detailed understanding of the business processes. If the processes are not defined or are vaguely scripted, accurate instructions for software development or customisation cannot be generated. For example, a retail bakery store may want to know what flavour of cake it sells the most. This takes us to the software the store is using. Does the software provide scope for entering such details? The relevance of this insight is that it would help the bakery realign its focus and redirect its efforts and investments. If chocolate-flavoured cakes do not sell much in the winter, then why invest in that category? With the help of analytics and making the necessary adjustments, the bakery could cater to a high-demand category and earn more revenue.

Scoring on XP

Although the backend or support operations are equally important, it is the frontal activities that carry a direct impact on customer experience in retail. Such activities could be related to visual merchandising, layout planning, planogram, staffing, packaging, checkout, etc. Even an unrealised deviation or any undermined factor is capable of hurting the in-store shopping experience of customers. Customers may say nothing and walk out. But that small gap of unfulfilled expectation is capable of pulling customers towards the store on the other side of the street. Because when the same customers visit that store, they will have a relatively better experience on that particular ground. But things could be worse when two businesses are in a similar standing. For example, say, there are two departmental stores that are direct competitors in the same locality. But one of the stores is not able to adhere to its layout planning because of overstocking. Stock lying scattered in the store does not carry a good impression on customers. How is the store making its purchase/reorder decisions? If there is someone in charge of the warehousing function, why is there overstocking inside the store? With sound SOPs in place and the same being religiously followed, the chances of these issues cropping are slim to none. Statistics show that with repeated good in-store shopping experiences, customers tend to buy more with time.

About Your Retail Coach (YRC)

YRC is a retail and eCommerce consulting enterprise with a scaling global presence. We endeavour to maintain world-class standards in service design and delivery. We engage professional and experienced retail and eCommerce consultants in our projects.

For any service-related enquiries or a quick conversation with one of our retail consultants, please drop us a message.