Compared to the United States and some other countries around the world, Canadian shoppers have been slower to adopt online shopping. As of 2013 (the most recent year of verified statistics), only 13 percent of Canadian businesses were selling online. But other statistics show that Canadians are more than willing Read More
Retail can be generally defined as the sale of goods and services from companies directly to customers. Traditionally, a retailer will buy goods or products in large quantities from manufacturers, either directly from the manufacturer or indirectly through a wholesaler. These goods and services are then sold individually or in small quantities to the public, often in a store or similar center of business.
The retail store is the outlet by which products are offered to the consumer, allowing a means to offer products in a way that will maximize market availability while providing the consumer the greatest opportunity for value, variety and choice. Through the evolution of retailing, the concept of the store has progressed beyond the walls of a brick-and-mortar operation and into the realm of the Internet, with the emergence of e-commerce as an essential aspect of many retail operations.
Retail is a business, and the aim of a business is to make money and turn a profit. Yet the process is more complicated than simply buying a building, filling it with merchandise, putting in a register and hoping for sales. Upon looking at the retail industry from a global perspective, we must consider the elements that make a retail business successful and profitable:
- We have to establish an identity that will attract our core customers. Establishing our identity sets the tone for everything that follows.
- We want to provide a quality product at an attractive price. The basic principles of supply and demand: Provide a product that we know people will want to buy, and offer it at a price that we know they will pay.
- We need to display our product in a way that makes it desirable to purchase. This concept must reach beyond our visual display and extend to the appearance and efficiency of the store or site.
- Our entire approach to the business should have our customers in mind. We should take all necessary steps to make our customers feel that they are important, that we will take care of them, that we value their opinions and their business, and that we want them to return and offer us their future business.
- We should provide an environment where our customer feels welcome, comfortable, confident, safe and secure. Our business should provide an atmosphere where our customer wants to shop, and should reflect a culture that best fits the core customer.
The most successful retail operations apply these simple but critical concepts as essential aspects of their core business. Retail is a dynamic business, but it can also be a delicate business. Many retail operations that falter or fail do so because they have in some way lost sight of the core business model. Clear vision must permeate every aspect and every department within the organization in order for it to succeed.
Sales drive the retail industry. When we look to measure the overall success of the business, we look to sales first. Understanding this, it should come as no surprise that brand objectives, planning, and ideals are built around the concept of sales—whether via e-commerce channels or in a brick-and-mortar store. Yet while sales may provide the barometer for profits, it is ultimately profit that will determine the success or failure of a retail business.
Profit margins are precisely where loss prevention departments have the greatest opportunity to make an impact on the success of the business. Retail shrink is in fact lost profits. Successful loss prevention planning thus looks to maximize profits by limiting shrink and improving efficiencies while enhancing the impact on sales.
It is through the understanding of the fundamental concepts and operations of the retail industry that we develop strong and productive business partnerships. But understanding alone isn’t enough. There also must be an acceptance of these concepts, and that acceptance must be embedded in everything that we do and every decision that we make as part of the business.
February 13, 2017 | David Speights, Ph.D., Daniel Downs, Ph.D., and Adi Raz, MBA | Retail Industry
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