Even by optimistic financial estimates, 2023 will be a tough year for SMBs. This is especially true in retail which has challenges of its own.
Retail price inflation seems unstoppable, and sustainability seems harder to achieve. Even with the current state of the job market, employee retention appears hard to achieve, and the disbalance between HR and technology seems to be greater by the hour. Most importantly, cybercrime is rising, and retail businesses seem to be hit the most.
Fortunately, some of these problems can be mitigated with the cunning use of technology. With that in mind and without further ado, here’s how to choose the right tools for your retail business in 2023.
The first tool your business needs is robust accounting software. However, accounting software will only do so. You need an accounting tool designed for retail. This means something that:
- Has a multiple access levels
- Accurately records transactions
- Tracks inventory
- Is cloud-based
Another major concern you must address is the importance of getting something scalable and extensible. A retail business needs a consistent structure. The last thing you need is to redo your entire business model because your workload has exceeded your technical capacities.
The accounting tool you use must be capable of checking and reconciling on a daily basis. Sure, doing inventory every once in a while is important, but you need to have most of this information daily.
Still, you shouldn’t forget the primary point of accounting. You need to collect all required tax information and back up this data. Your accountant will appreciate this, and it will help keep you on the right side of the law. This is just as important as having a registered agent (if you’re not a sole proprietor).
This is all about keeping your ledgers defined and updated at any moment. You still need to keep a paper trail; however, this time, it can also be in digital format.
This accounting software’s most crucial role is to track your cash flow. Without it, you might soon struggle to cover even the most basic day-to-day expenses.
About 20% of your regular customers make 80% of your entire profit. This is why a customer’s journey doesn’t end with their first purchase. You must keep track of all these customers and try to get as much value out of them as possible. A good CRM software will help you keep track of all this.
Customer relationship management (CRM) software is a system that coordinates all communications between the customer and your business.
CRM gathers all the customer data, analyzes it, and keeps it all in one place. This makes re-engagement simpler and cross-selling and upselling more efficient. Just having user data is not enough. You also need a way to get it on demand and a quick way to incorporate it into your marketing strategy.
To simplify the purpose of CRM and better explain what it does, you need to understand that it focuses on the seven Cs.
- Customer centricity
- Company culture
- Customer experience
- Customer data
- Consumer experience
- Consumer expectation
- Customer journey
Now, CRM can also be an umbrella term. There are three types of CRMs:
Each has something different to offer, so you should research and pick the right one for your business. Other than these three, there are more elaborate campaign management CRMs and strategic CRMs.
While accounting tools and CRM software benefit every business, sometimes, you need to be more industry-specific. Running a boutique and running a convenience store is not the same. So, you should dig out a custom-made tool for your industry. We’ll give you an example.
Tools you need when starting a boutique business
When first starting a boutique business, chances are that you’ll be preoccupied with other worries. There’s the store location to choose, funds to raise, and you must strike deals with strategic vendors. When you complete this stage, you need to improve your sales and efficiency.
You can do this with tools like:
- E-commerce store
- Point of sale solution (Read WSB’s guides on how to choose the best)
- Accounting system
The thing is that your sales in the fashion industry are affected by many factors. Even setting a playlist for the background music is not to be underestimated. Everything affects the mood of your customers and, therefore, their aptitude for spending money in your store.
Marketing automation software
There are many reasons why you want to automate your marketing. First of all, it reduces the costs of your marketing campaign. Lower overhead will allow you to remain profitable even if you further lower the costs. As a result, you can be more competitive or redirect this money towards another investment. This way, you will further facilitate your growth.
While marketing automation helps you be more profitable indirectly, there are also some direct benefits. For instance, you’ll get more revenue. Some small businesses have reported as much as 800% revenue growth since they automated their marketing.
The truth is that running a marketing campaign right is a lot of work; some might even argue that it’s too much work. So, you either need to automate or hire a virtual assistant to help you out. Ideally, you would probably do both.
Data and information
In retail, it’s all about data. However, small businesses struggle with Big Data. What they need is something smaller, something more concise. A marketing automation tool can analyze the gathered data and provide users with actionable information. It’s a simplified version of the BI platform that your retail business could use.
Most important of all, customers want a more personal outreach. Customer data can help you out with this. The problem is that sending out personalized messages to hundreds of customers might only be possible with automation. Fortunately, many great tools are available to help you on your journey.
There’s a slight problem with this data, nonetheless. Getting customer data is a privilege, but it’s also a responsibility. This is especially true in today’s hostile cyber world. This brings us to our next talking point…
Cybersecurity and compliances
Even in offline retail, your customers usually leave sensitive information in your store. They use their credit card, some pay via their smartphones, and, if there are loyalty programs, they even have accounts. All of this is at risk when cyber attacks target you.
One of the best ways to protect your business is to choose adequate cybersecurity tools. In some scenarios, even outsourcing your cybersecurity might be a winning move.
While being proactive is not always possible, you can do so much by improving your reaction time.
Stop account takeover attacks
According to experts behind Data Dome, e-commerce is often the target of data theft, which results in the loss of one’s personal identifiable information (PII). As a retail business, ignoring this may result in an increased number of chargebacks, higher customer churn, and even the loss of trust in your business. Most importantly, it will increase transition disputes, thus directly hurting your finances.
Fortunately, there are a few methods that could stop this.
- Regularly checking compromised credentials
- Mandatory notifications on account changes
- Limit on login attempts
All these methods are simple to set up, and they can do wonders to protect your customers’ data.
Privacy law (CCPA vs. CPRA)
Before you even start, you need to study privacy law. Here, you’ll see precisely what kind of information you’re entitled to and how you must treat your customers’ private data.
Depending on the location of your enterprise, you may be subject to different compliances. This can sometimes get blurry, even in countries as straightforward as California.
For instance, there’s a dilemma regarding the CCPA vs. CPRA, which is simple. They are more or less the same, with CPRA slightly more elaborate. So, if you’re running a California-based retail place, this is something to bear in mind.
Retail management software
Lastly, retail management software is a digital sales tool that your retail business should start using. Here, you get everything from the point-of-sales features to retail customer relationship management.
By design, the majority of these tools provide you with end-to-end service. So, if your aim were just to improve the efficiency of your retail business, the quickest way to do so would be with a retail management software.
Choosing the right tool is a challenging task. To make it easier, try making a short list of tools you’re considering and then look up a software comparison platform. Here, you can see these tools side by side and directly compare their advantages and disadvantages.
Still, choosing any of the top retail management platforms will make you much better off than doing all this manually.
The right set of digital tools can revolutionize your resale business
With the right tools, you can increase your revenue, manage your customers, and handle your finances more efficiently. On top of that, you should put extra effort into keeping the data of your customers safe and learn all you can about your state’s compliance laws. With the right tool, however, you can streamline most of these tasks.
By Srdjan Gombar
Veteran content writer, published author, and amateur boxer. Srdjan is a Bachelor of Arts in English Language & Literature and is passionate about technology, pop culture, and self-improvement. His free time he spends reading, watching movies, and playing Super Mario Bros. with his son.