Have you ever been to a store that’s just utter chaos?
Frazzled staff running around like headless chickens. Managers nowhere to be seen. Messy merch displays and items laying around where they shouldn't be.
You might eventually find what you came in for, but you won't be desperate to return any time soon.
If you're responsible for running a retail store – or if you're thinking about starting a retail business – then retail management is a must-have skill. It's a toolkit of abilities that combines people management, process-building, and an eye for detail that prevents your store from descending into anarchy.
A skilled retail manager can make the difference between a store that just survives and one that thrives. If you want to run a place that makes a healthy profit and that customers can't wait to come back to, it's time to up your retail management game. Here's what you need to know.
Table of Contents
What is retail management?
Retail management refers to the process of helping customers find products in your store. It includes everything from increasing your customer pool to how products are presented, and how you fulfill a customer's needs.
A good store manager helps customers leave the store with a smile. They also are responsible for:
- Motivating employees
- Developing strategies to increase the customer pool
- Growing store traffic
- Meeting sales goals
- Ensuring customer satisfaction
- Improving profitability
- Preventing shoplifting
You love it when you visit a store that somehow exceeds your expectations, and you hate it when a store inconveniences you, or gives you a hard time, or just pretends you’re invisible.
Importance of retail management
The retail landscape is competitive. Brick-and-mortar stores grew faster than ecommerce for the first time ever in 2021, growing at a rate of 18.5% compared to ecommerce growth of 14.2%, as reported by Forbes.
New stores are popping up fast. To succeed in this environment, you need to give customers exactly what they want, fast, and provide a great shopping experience. That’s where retail management comes in.
Improves the customer experience
An outstanding customer experience is critical for business. It leaves people feeling appreciated and heard. Customers often buy more, act more loyal, and tell their friends about a great experience in your store.
Research from PWC finds that great experiences boil down to a few things:
- Human touch
Retail managers are responsible for giving employees what they need to create outstanding customer experiences based on the elements above.
Say, for example, a customer named Andrew comes into your store to buy a pair of shoes. He was browsing options at a few different stores and landed in yours. When he asked for the shoes, an employee quickly found the right size and model, and brought them to him. Andrew can enjoy shopping at stores that provide an experience like that.
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Optimizes your store processes
Like every other business around, a successful retail store runs on multiple processes. Retail management involves creating an effective operation that benefits both the customer and your company. Managers must keep records of all products coming into the store, assign SKUs to each product, plan the store layout, and much more.
Processes store managers are responsible for include:
- Internal planning. The “behind the scenes” of a retail store. Managers must consider staffing needs, supplier logistics, finances, and keeping a tab on competitors.
- Procurement. Finding the right suppliers for the store at the right price.
- Fulfillment. How products move through the supply chain, from accepting shipments to the packaging and checkout experience in-store.
- Promotions and sales. Managers also make the store look presentable and on brand, as well as promote any specials currently running.
- Service and support. Customers must be able to navigate through the store, get all the product information they need, and get questions answered immediately.
Retail management saves time and guarantees that customers can easily find their products in-store. A smooth process in place avoids chaos and keeps employees and customers satisfied.
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Supports brand growth
The combination of the above means your business will be more successful, which opens a lot of doors for your brand's future. A more efficient store will be more profitable, and those profits can be reinvested to grow your brand.
Growth may look like:
- Making store improvements
- Spending more on marketing
- Expanding your product range
- Producing more goods, faster
- Hiring more skilled staff
- Opening new stores
Happy customers won't just return time and time again – they'll recommend you to their friends and family. From an offhand remark to full-on evangelism, the power of word-of-mouth advertising cannot be underestimated. If you've got the chance to delight customers, take it – it can pay dividends for years to come.
A second retail location should be an obvious next step, and your business should be ready for growth. This includes your documented and streamlined processes, your trained workforce, and your supply chain.
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Retail management responsibilities
- Manage employees
- Handle customer complaints
- Monitor store performance
- Mitigate shrinkage
The specific responsibilities of a retail manager will vary depending on the size and type of store they're running. But there are some core duties that all retail managers need to be aware of:
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The retail sector provides more than one in four jobs nationwide. It also has one of the highest turnover rates, hovering about 60% on average. Employees are the most important asset in your store, so retail managers must excel at working with them.
Staffing tasks a retail manager is responsible for include:
- Hiring new staff
- Training and onboarding new staff
- Forecasting staff requirements and organizing shifts
- Dealing with employee conflicts and issues
- Coaching and managing performance
- Creating systems and processes for retail employees to follow
- Ensuring everyone complies with health and safety regulations
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Handle customer complaints
No matter how good your retail environment is, there are bound to be complaints. Deloitte found that even though fewer customers may be experiencing problems, more customers than ever are inclined to complain about customer service problems.
One key responsibility of a store manager is listening with an empathetic ear. Once they understand a customer’s issue, they should work to fix the issue and prevent it from happening again.
A bad shopper experience can almost always be turned into a moment of customer satisfaction. While "the customer is always right" isn't totally correct, it sometimes makes sense to incur a small cost to keep them happy in return for their long-term loyalty.
Monitor store performance
Retail management involves setting goals for your store and staff. You'll also have to measure your performance against those goals and figure out where to allocate your resources to increase your chances of success.
Retail metrics to monitor in your store include:
- Sales goals: overall and per department
- Average basket size: how many items per transaction
- Footfall: the number of people coming into the store
- Conversion rate: the percentage of people who make a purchase
Store managers often make daily sales reports to keep track of cash flow. They use a Point of Sale (POS) system and maintain registers to compile reports and monitor performance.
Tracking performance helps you understand where you need to make changes or improvements to increase sales and customers.
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Shrinkage is the retail industry term for the loss of inventory through theft and other means, and it's a serious problem. In the US alone, shrinkage costs retailers $61 billion every year, and it's unlikely to go down any time soon.
The big problem? When you lose inventory through shrinkage, you cannot recoup the cost of the merchandise as there is nothing to sell or return.
Common types of shrinkage include:
- Shoplifting or theft
- Return fraud
- Employee theft
- Administrative error
- Vendor fraud
- Unattributed loss
As a retail manager, it is your responsibility to reduce shrinkage in your store through security measures, employee training, and stock management processes. It is important to note that shrinkage is unlikely to be completely eliminated, so many retailers include it in their accounts as an expected financial loss. The goal is to keep that figure as low as possible.
Retail management skills
- Customer service
- Leadership ability
- Product knowledge
- Basic analytics skills
Wondering if retail management is the right option for you? You'll need a particular set of skills to make it work. Here are the main ones.
Since customer service is the holy grail of retail, a manager must have excellent customer service skills. Providing incredible service is not always easy, so all staff must keep customers’ feelings front of mind and address them with respect.
Top customer service skills to develop in retail management are:
- Persuasive speaking skills
- Positive language
- Clear communication
- Effective listening
Of course, this list isn’t perfect for every store. However, a retail management program founded on these principles is destined to succeed.
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Retail managers should be able to inspire their staff to get through the tough times. Customer service issues, holiday rushes, and supply chain problems can all cause headaches that require everyone to pitch in.
To meet your KPIs and sales targets, you must also use your leadership skills to inspire your employees to go above and beyond the minimum effort. Simply scanning items through the cash register and calling it a day is not enough; customers need to feel cared for as well.
In many cases, you'll be expected to have more knowledge about the products than frontline staff. Your expertise will be necessary when someone consults you with a question the store assistants can't handle.
This means being a retail manager in an industry you're interested in is the way to make it work. You’ll want to:
- Keep up with industry trends
- Understand what your competition's doing
- Know how products work
Basic analytics skills
Analyzing your data is the key to managing performance and getting your store to hit those sales figures. It does not mean you need a degree in math or data science, but you should be able to use a spreadsheet and do basic accounting.
Retail managers should also understand how to use POS software. You can personalize the system to your stores and access unified reporting. That way, you can adapt to trends in your business and capitalize on sales.
Having everything on one system means that we can get to know our customers better and what they want. We can constantly improve as a brand as well. Shopify POS is simple to use across channels and it is very easy to transact on.
💡 PRO TIP: Analyze your POS data in tandem with your ecommerce data to be more cost effective with your inventory, measure your store’s impact on online sales, repeat purchases, lifetime value, and more.
The future of retail management
As we've noted, the world of retail never stands still. Here are some of the trends we expect to see in retail management over the near future.
Virtual shopping is already a reality for many retail brands, and it's only going to become more common. With technology like augmented reality and virtual reality, shoppers will be able to try on clothes, test out makeup, and see how furniture would look in their homes without ever having to set foot in a store. Sales associates can also serve customers remotely and give expert recommendations.
This means retail managers will need to be comfortable with the technology options out there, and potentially implement them to create an immersive shopping experience for their customers.
Omnichannel customer journeys
Omnichannel retailing is the term used for when a customer can shop with a retailer through multiple channels – in-store, online, social media, through a mobile app, or even by talking to a voice assistant like Alexa.
This trend is already well underway, and retail managers need to be prepared for it. This means having a good understanding of the customer journey and being able to create a positive experience, no matter how or where their customer chooses to shop.
In recent years, there's been a move away from traditional retail experiences toward something more sensory and connected. Experiential retail is all about creating an engaging environment for shoppers through brand activations, in-store events, masterclasses, and community meetups.
As a retail manager, you'll need to be aware of this trend and be ready to create enticing experiences for shoppers.
Improve retail management at your store
There are a lot of moving parts to successful retail management, but if you're organized and have a good team around you, it can be an extremely rewarding role. The sense of achievement you get from seeing your store grow and succeed is unlike any other.
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Retail management FAQ
What is the meaning of retail management?
What are the 4 types of retail management?
- Traditional Retail Management: This type of retail management involves overseeing the operations of a physical store or shop, ranging from inventory management and customer service to marketing and sales.
- Multi-channel Retail Management: This type of retail management involves managing retail operations across multiple channels including physical stores, online stores, and marketplaces.
- Visual Merchandising and Store Planning: This type of retail management involves creating an attractive and inviting store environment to attract and retain customers.
- E-commerce Retail Management: This type of retail management involves overseeing the operations of an online store, including website design, search engine optimization, content management, and digital marketing.