Across the globe, retail businesses are having a tough time. People are cutting back on their spending. According to NPR, in Q4 of 2022, 37% of Americans said their finances had gotten worse. In addition, 75% of those surveyed stated that they had cut back on their spending.
At the same time, retailers are seeing their overhead costs rise, which is bad news for them. A recent study by Alvarez and Marsal looked at the retail sectors of six European economies. They discovered that for most physical retailers their profit margins are narrowing. During 2022 the average retailer saw their pre-tax profit margins go from 6.4 to 4.5%. They looked at two of the reasons behind this, which was more online shopping leading to a bigger percentage of spend ending up in the hands of just a few firms. Along with the fallout from CoVid.
Business owners struggling to invest in new technology
Because of the current economic climate, business owners are increasingly reluctant to invest in modern technology. This is even though those who do so are more likely to thrive and survive in the current economic environment.
They are the retailers who will be able to work the most efficiently, which will lead to higher profit margins. Enabling them to cut their prices just a little bit more than their competitors, something that is almost guaranteed to generate more sales overall.
But retailers need to invest in the right technology. Then, introduce and utilize it properly.
An overview of the retail technologies that are currently available
Being aware of what is available is the first step to choosing the right technology for your retail outlet. Here are some of the most common and useful options every store owner should consider investing in:
POS tech – Ensuring customers can pay fast is essential, so periodically upgrading POS hardware and software is a must. Fortunately, you can do this by repurposing old iPads and tablets.
Stock control software – This software makes sure you always have what customers want available without tying a lot of money in stock. This improves cash flow. The more cash-rich a business is, the easier it is to take advantage of bargains, which in turn enables them to offer more attractive deals to their customers.
Digital signage – In an increasingly competitive market catching the eye of passers-by and tempting them into the store is essential. Digital window signage is a relatively low-cost, yet highly effective way to do exactly that. Store owners can share the details of any type of offer using photos, posters, or short videos. The deals that are displayed can be changed throughout the day to appeal to the demographics of the people that shop at various times.
Sensor technology – Sensors can be used to monitor how many customers are in the store, so you can deploy more staff to the checkouts before queues build up. They can be used to pick up on out-of-stock items, reduce power bills, keep high-end products secure, and for countless other tasks. You can find out more about how retailers are deploying sensors and using the Internet of Things (IoT) by clicking here.
How to determine whether updated technology will be cost-effective
It is still advisable for store owners to crunch the numbers before implementing the above technologies to ensure they are feasible for their business.
ROI needs to be calculated. Do not forget to include the cost of training as well as the cost of running and maintaining the equipment.
Ways to spread the cost of introducing new technology
If a business is cash poor, they need to spread the cost of introducing innovative tech. How to do this is covered in detail in this article. It is also worth putting your business forward to beta-test new versions of the technology that you already use.
Stay ahead of your competitors by adopting the latest tech fast
You don’t want to be the last to adopt new technology. It is helpful to visit your competitors’ stores to see what they are doing. Subscribe to some of the leading trade magazines. If you recruit someone from one of your competitors, spend a bit of time discussing how the old firm they worked for does things. It is surprising what you will learn from these conversations.
Keep an open mind and pay attention to how other types of businesses use technology. Often, doing this will generate ideas that you can use to enhance your own company.
It is not enough to invest in new technology and use it well. Businesses need to actively seek out solutions for the challenge they are facing.