Changing landscape of retail
Today, even small retail businesses are subject to tough competition from other online and offline players. As customers, we could see it so clearly that if we are getting a product at a better price or value in another store (online or offline), we would not hesitate to get it from there. The stature and size of the business are now irrelevant when it comes to the implementation of prevailing industry standards and competitive business strategies. Retail businesses can no longer be managed with outdated approaches.
The implementation of Standard Operating Procedures (SOPs) is one such area where retail stores can elevate their competitiveness via operational superiority. And not doing so has the opposite implications. This blog highlights why managing a retail store could prove to be not only challenging but also costly.
Absence of Consistency
Maintaining uniformity in services and operational standards is a must for retail stores. It applies to all departments. It could be inventory management, customer service, planogram and visual merchandising, cash handling, etc. The lack of consistency has adverse ramifications on business operations as well as customer experience. For example, if home delivery is promised within 30-45 minutes, the operational planning needs to be planned accordingly. Giving the excuse of order volume will not be accepted by customers for too long. If the work volume is too much for the existing team, that is an internal affair and is expected to be addressed internally. By planning and implementing order fulfilment SOPs, retail stores could ensure that the process is consistently executed as per planning. If the volume of orders increases, retailers could gauge the burden on their existing resources and prepare accordingly. Thus, SOPs not only help in achieving operational consistency but also provide a picture of operational capabilities. Not having SOPs has the opposite effect. Without SOPs, it becomes impossible to distinguish consistency from inconsistency in business operations.
Longer Learning Curve
If new rules and standards are made every day for the same operation, it gets confusing and challenging for the employees to adapt to their work. This hampers the pace at which they learn and improvise. The policies and procedures for every process and operation must be planned and communicated to the employees. Otherwise, they will end up doing their best and that might still not comply with the business requirements.
You might have noticed in small departmental stores that you, as a routine customer, know better about which products are placed on which shelves and corners than some of the employees there. This is the outcome of a lack of training, frequent changes in planogram strategies, and undefined inbound processes. If SOPs are implanted for the inbound process, this problem could be resolved by providing some basic training to employees and not messing with the planogram too often.
Broken Customer Experience
Today, retail brands and businesses are going omnichannel. They are running multiple branches in different locations. And as retail consultants, we always emphasise that businesses cannot afford to let their operations go inconsistent. After all, the brand is one and the brand voice needs to be unequivocal. Otherwise, it could become a source of discontent for customers. Imagine walking into another branch of your favourite departmental store and them saying your premium membership is not valid in that store. These kinds of experiences are not rare for customers in local franchising arrangements.
Accomplishing customer experience goals require uniformity and consistency in managing store operations. SOPs help retail businesses follow a unified and standardised operational plan across their network of stores. The objective is to deliver a seamless customer experience whether the number of stores is two, twenty, or two hundred. It is good to have a strong business model and plan but these would be of little meaning if the operations are faulty and not aligned with the CX strategies.
Difficulties in automation
Technology has helped retail brands and businesses become efficient with their operations and strive for growth and expansion. These benefits also apply to small retail stores. But you do not get there in one shot. The business processes have to be defined and mapped first. It takes some time to bake these processes into perfection. And SOP is one of the best-known tools using which business processes and operations could be precisely defined. These process definitions constitute a vital source of information for deciphering the IT/automation requirements. Without these specifications, choosing a software/tech solution could become an impossible task. Having a wrong solution at work could only make things worse. If you say no to SOPs, it is close to saying no to automation and digitisation. And without technology aiding your business processes, your business is in a less advantageous position.
Difficulties in monitoring
The presence of standards is vital to supervise, monitor, and measure performance. How will you measure something if you do not have a scale or set of standards? SOPs provide the benchmarking using which business operations and performances could be measured and monitored. Operational deviation, if any, could be readily identified and corrective measures can be implemented. For example, if you are frequently experiencing inventory shortages, you might have to increase the ROL. If the reasons are external, you may have to take other appropriate actions. But if you do not have a defined procurement process, it will take longer for you to spot where things are going wrong. SOPs also reveal the skills and competencies required to complete tasks based on which the KRAs could be defined. With considerable experience in SOP development for retail and eCommerce, we reckon that SOPs provide a much more realistic picture of the skill requirements than theoretical expectations.
Regular involvement of owners
Are you able to devote time to broader business goals like developing new markets, reaching out to more customers, enhancing your merchandising portfolio, or the growth and expansion of your store? If you aspire to become an entrepreneur in a true sense, you would need to devote more quality time to the bigger picture. That is not possible if you have to micromanage or get extensively involved in routine business operations. By implementing SOPs, you could free yourself from helicopter monitoring and focus on the macro goals. SOPs do not take away your control but engage you in meaningful ways.
For any assistance in SOP development and implementation in your retail enterprise, you can speak to one of our retail SOP consultants. Please visit our website. If you are already here, drop us a message. Visit our blog page and YouTube channel for insights and updates on retail & eCommerce business management.