The retail industry is always changing. So are the challenges in the retail industry.

When doing business in a fast-changing industry, it’s essential to have the ability to adapt to the new trends and challenges. If not, companies can’t help but end up in bankruptcy. 

This is why, in this article, we share, top 8 challenges in the retail industry and solutions to overcome them. 

challenges in the retail industry

8 significant challenges in the retail industry and how to overcome them 

1. Ever-changing customer expectations

Customer is changing every day in this fast-paced world. And so is their behaviour. 

Thus keeping up with the fast-changing customer demand is one of the most common challenges the retail industry face. Seasonal trends, global trends, and world events cause changes in consumer behaviour faster than the industry ever seen or experienced before.

Solution – Always keeping an eye on your inventory system can help you quickly understand customer behaviours. This will give retailers a clear overview of the stocks movement across all channels. 

By closely monitoring sales data history, fast-moving items and slow-moving items retailers will be able to dissect customer behaviour and predict future consumer trends.

2. Customer loyalty

Maintaining customer loyalty is another massive challenge in the retail industry, that retailers have to put up with. With many competitors looking forward to increasing their customer base, every retailer has to have a good plan to improve customer loyalty.

Solution – The key solution to improve customer loyalty is to enhance the customer experience. However, this has to go beyond offering discounts and sales. In today's world, customers are looking for more than deals to stick with a brand.

Personalization is a powerful way to improve your customer experience in a way customers never want to leave you. Here, customer loyalty programs, personalized emails even a small friendly conversation with regular customers will do the job.

3. Competing with global e-commerce

The rise of eCommerce has laid an enormous threat to the retail industry. With the digitalization of the world, more and more people are browsing products on the internet and shop online. eCommerce gives the consumer plenty of options right at the comfort of their couch. And this has hugely affected the retail industry.

Solution – While many retailers complain about how much eCommerce has severely affected the retail industry, wise retailers have seen the opportunity of eCommerce for their business expansion. 

Combining online and offline purchasing experience has reaped significant benefits for many small and large retailers. Some retailers even have experienced growth in sales in the physical stores after opening their eCommerce store. 

4. Finding the best technology to improve performance

Living in a world technology runs most of the lives of the people, retails stores also need to adopt new technology fast. With the advancement of technology, people have become more impatient and have high expectations for customer experience. Thus they have less tolerance towards delays and manual errors.

Solution – Adopting the right technology can automate your processes, reduce errors,  enable easy communication and collaboration between floors and different stores. 

Today there are many new technologies and systems developed for the retail industry. Some of them are barcode technology, POS system, inventory management system and CRM system. Here, it’s essential retailers spend time understanding what problems they are trying to solve in their stores and understand the right technology and tools to solve them. Thus they can make sure their investment is worth their money.

5. Dealing with isolated marketing infrastructure

With the digital world, more and more marketing channels are popping up every day. Thus, marketers are trying out all these new marketing channels to expand their reach. They include old and modern marketing methods and try to get their message across many channels as much as they can. 

However, it can cause incoherency in the messages your target market receives. And this might leads to losing your customers to your competitors who have a more transparent and harmonious message.

Solution- Rather than trying out different things on different channels, marketers should develop a strategy, including all the marketing channels creating harmony in marketing campaigns and the messages you deliver. 

6. Making marketing and sales working seamlessly

Another challenge retail industry experience is the inability to make sales and marketing work smoothly. Today many new marketing channels are available for retail marketers. 

On the other hand, the sales department has its own set of latest tools to improve sales with the help of technology. With this, the marketing and sales department receives more data than ever before. Yet many retail businesses still experience the disconnect between marketing efforts and sales.

Solution – Here, the best solution is to find a good tool that enables marketing and sales department share data and get the best out of all the data you collect. The right system will let you merge data from the marketing department with the sales department. So you could utilize marketing data to improve the sales process and vice versa.

7. Employee retention

Retaining good employees is a big challenge every retail business face regardless of where you locate in the world. This is because not many people are willing to make a career in retail. 

Thus businesses have to spend a lot of energy and money finding and training new employees and retaining them.

Solution – Increasing employee engagement within the company is one of the hugely successful solutions to increase employee retention. Here it’s essential to provide employees with regular training programs to sharpen their skills and knowledge. 

Also, the company can adopt an automated training platform to save time and costs in training.

8. Effectively managing internal communication

Retail is a complex operation that involves many departments such as marketing, sales, CRM, supply chain management, inventory, customer service, etc. Thus it’s tough for businesses to maintain effective internal communication between departments, which often leads to errors, miscommunication delays. This leads to an unhappy customer.

Solution- A sound ERP system like TigernixERP that can bring all the departments involved in the process together easily. Centralizing all the data and offering real-time updates, the system enables retailers to achieve seamless internal communication at the lowest cost.