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Stop giving your customers reasons to leave

5 Nov 2008

Most retailers experience a downturn in a weak economy. As consumers rein in spending, a downturn is usually not distributed equally among all retailers. The extent of the downturn depends on a number of factors, including geographic location of stores, product categories being sold and specific market segments. In order to survive a tightening economic climate, retailers must focus on their short- and long-term objectives.

Despite the current economic condition, retailers should continue to explore investments in technologies that provide improved customer service and optimize operational efficiencies in order to improve their competitive market position. The strength of retailers' e-commerce systems can make or break their profit margins during tough times. This article outlines some of our recommendations for retailers facing various market-driven challenges.

In our opinion, retailers should place emphasis on the following objectives:

Maximizing sales potential;
Effective planning and inventory management;
Increasing efficiencies to reduce costs; and
Building customer loyalty.

Retailers should move quickly to implement strategies to achieve the objectives listed above. Effective implementation of these strategies will improve retailers' sales performance during the downturn and will enhance retailers' competitive positioning during the upturn.

Aside from strategies to deal with physical stores (i.e. closing underperforming stores) this article will focus on e-commerce and cross-channel strategies, marketing strategies as well as systems to optimize inventory levels. Retailers often overlook many of these strategies; however, the retailers that have successfully executed them are achieving significant results and payback. The effective execution of a sound plan in these areas will go a long way in providing major sales benefits; the plan will bolster survival in a downturn and will enhance competitive gains vis-à-vis competitors during an upturn.

Read the full article here.