New Zealand retailers are striving to acclimate to a highly dynamic industry which is posing a plethora of challenges for them. Constantly grappling with squeezing margins, disrupted supply networks, increased competition, labour crunches, and stock woes, the retail operators are willing to leave no stone unturned to avail some relief in the current situation.
Further credit for the issues may be rewarded to multinational giants that are on the verge of replacing the entire retail ecosystem with their monopoly privilege – thanks to Costco stepping into the market, reveals an article from 1News.
Albeit the pandemic shows bleak signs of retreating, there is a glimmer of hope that the authorities might be able to take remedial actions in a short course of time. Retailers are bracing themselves for “the bigger picture”; they are evolving their defensive strategy by investing in analytics, technology enablement and trying to comprehend customer expectations.
Through this blog, we aim at keeping you in the loop about everything transpiring in the retail ecosystem and as a retailer, staying mindful of the problems is a must. It will not only help in dealing with them but also develop a course of action that would aid in sustaining the business.
Pressing Issues That Continue To Be A Headache For Retailers
As newer predicaments keep adding to the list, it is fair to say that a lot is yet to be done. The side-effects of the global pandemic still pervade which are responsible for the distress amongst retail operators.
So it becomes more than a necessity for retail entities to gain a thorough awareness of the trends affecting their sector. This will not only help businesses find fresh and exciting growth prospects, but it will also help them stay competitive in a world that is becoming more globalised and online.
Staff Crunches –
Minimum wages are high enough for many businesses to afford because of insufficient cashflows. Moreover, a chunk of labour hails from other countries and the workforce has not been able to return ever since the pandemic struck the world.
Rigid Immigration policies, above-market pay rates, and the “brain drain” are factors that are collectively hurting local businesses. This is why shops or retail outlets are faced with staff shortages.
Stock Insufficiencies –
Being “sold out” doesn’t always mean a reseller is doing better, but it rather points out loopholes that one might fail to see. First of all, if a retail business is not able to keep up with the demand for a product, it comprises it’s relationship with the buyers.
Secondly, it means missing out on sales which is an absolute setback. The issue that arises here is due to limited cash flow & lack of storage, which puts the operators in a difficult position.
Derailed Focus on Store Operations –
As much as the primary focus of retailing units must be on selling their products, retailers should also check on aspects that some of other ways affect sales. Activities like stocking, adjusting profit margins and quality control take up most of the time while other ones remain untapped. Not paying attention to store operations has a direct impact on your business, as mentioned by a retail specialist on Vend, “neglecting to pay sufficient attention to store operations is the cause of a major downfall in sales.”
Fickling Consumer Behaviour –
In the era of rapidly changing customer preferences, how does one keep up? According to a study, the gap between acquired stock & demand widened due to panic buying when the lockdown began in New Zealand. The only retail units opened were supermarkets, and it encouraged a disturbed flow of stock in the masses.
Roy Morgan on ANZ Research states, “Consumers have learnt new shopping habits and will be more cautious, digitally aware and likely to change their spending patterns to reflect their new economic reality.”
Freight and Logistics Woes –
The pandemic brazenly exposed the extensive ripple effects of supply chain disruptions. Due to its isolation from major international markets, the retail industry of New Zealand requires a strong and dependable supply chain and freight infrastructure. The strain on the supply chain is resulting in increased freight rates which must be dealt with.
As for logistics, a study reveals that manufacturers are unable to rent warehouse spaces for additional storage, and must pay up to 400% more. This inevitably passes on to the retailers & the profit margin is compromised.
Looking at the Bright Side
Though it may seem that the number of challenges exceeds the privileges of holding a retail enterprise in New Zealand, some factors can be taken care of with complete understanding.
We have enlisted some core measures that retail operators of today can take into consideration to mitigate the crisis they are facing –
Optimizing Store Operations With Technology –
In today’s era, you put technology into use where your manual efforts would not be able to achieve desired results. Integrating technology into your business will not only ease operations but will also enhance productivity. Getting delivery robots and virtual store assistants is one suggestion.
Also, you can opt for making your store cashierless – this includes getting a system with a bar-code scanner or voice-automated software that processes the amount and disperses the customers quickly. This reduces queues at your store and adds to your customers’ convenience.
These are other elements too that retailers must take note of – Finding out what type of products or brands their customers prefer, offering them after-sales services, getting more additions for their store to make it look more welcoming, or devising data-driven strategies to roll out attractive offers.
Dealing with Staff Shortage-
You can overcome the issues of staff shortages by doing the following:
Focus on retaining talent – It’s tempting to focus on recruitment, but don’t ignore your existing talent. Currently, skilled workers are in high demand. Some competitors may target your top staff. It isn’t just about salary as there are other ways to make your employees stay. That could mean adopting flexible work arrangements or establishing a better working environment.
Also, ask yourself if you are providing any growth opportunities to the staff or not.
You may or may not be able to provide a competitive wage or benefits package, but that’s okay. A pleasant culture, engaging employment, or good work-life balance make way for better relations with your employees.
For other suggestions, you may want to visit LD New Zealand and know more about coping with staff inadequacies.
Buying in Bulk
Many retailers tend to buy from the manufacturers themselves thinking they would earn some convenience, but by and large, it isn’t true. Wholesalers sell a product at a more competitive price as they buy in large quantities, therefore allowing you to purchase smaller quantities of desired items at comparatively low prices. What’s more, is that you get them delivered without any hassles that you usually face by dealing with producers. That is how entities dealing in wholesale products can reinvigorate the retail ecosystem.
Bottom Line
It is fair to acknowledge that the retail industry is surrounded by myriad troubles and new ones keep adding to the list. If perceived from a different angle, getting acclimated is a lot easier. Even though there are high freight & logistics, stock insufficiencies, low staffing levels & other issues piling up, a brighter destiny awaits those still willing to push through the crisis. It is obvious that the sector of retailing calls for more improvement that should come from the ones possessing requisite knowledge & authority in the government.
