What Is Retail Operations? 8 Examples and How To Automate It

Retail operations are the day-to-day tasks associated with running a retail store. Here are eight examples with tips on how to automate it.

You have a laundry list of tasks to complete each day as a retail business owner. Talk to customers, tidy the store, schedule staff shifts for the coming week… the list goes on. These tasks fall under the category of retail operations.

Retail operations describe the regular tasks, processes, or procedures that keep a retail business running smoothly. 

The real question is: How do you ensure efficient retail operations across both online and physical store locations? This guide shares the answer, including the things to include in your operations strategy and tips for maintaining a successful retail operation. 

What are retail operations?

Retail operations are the daily activities, systems, or processes that allow online and physical stores to function efficiently and effectively. The aim is to enhance the customer shopping experience and lower the retailer’s costs.

At a glance, retail operations include:

• Supply chain/logistics management
• Cash operations
• Store layout (both online and physical locations)
• Customer service
• Order fulfillment
• Physical inventory management 
• Master data management
• Promotions and pricing 
• Employee management 

Retail store operations examples

Customer service

Customer service is about more than providing support in the decision and purchase phase. Today’s customers expect digital and in-person channels to deliver a personalized shopping experience. Retailers must also provide customers with an easy, frictionless post-purchase experience. 

This can feel like a tall order for brands with both a digital and physical presence. How do you ensure consistency for both online and in-store shoppers? How do you achieve personalization if you’re experiencing rapid growth? 

Store associates at physical locations have a unique opportunity to personally interact with each customer. This part of your retail operations focuses on improving customer satisfaction through:

• Omnichannel help and support
• Quick deliveries 
• Easy refunds and returns
• Fast resolutions to customer complaints
• Gathering customer feedback
• Inputting customer data into a customer relationship management tool

Automating customer service processes such as returns and support ticketing can free up staff time and reduce operational costs, while still maintaining high levels of customer satisfaction. Tools that centralize omnichannel support data, like Shopify Inbox, help streamline these processes, reducing manual labor and speeding up resolution times.

You can also use a customer service app that integrates with Shopify to manage support requests effectively. These platforms allow you to create templates for common questions and set up automated replies with expected response times

Store management

A key component of retail operations is giving customers a top-quality experience that makes shopping easy. 

Retail stores need to be accessible to all shoppers, easy to navigate, and well-staffed by knowledgeable team members. Think about how your hiring and training policies help team members feel prepared to deal with shoppers. The layout, music, and aesthetics of your physical store should add to the shopping experience. 

The store management aspect of retail operations should also prioritize safety—not just of your employees and customers, but of your inventory. Put loss prevention measures in place to prevent shoplifting or fraud from sabotaging your profits.

Shopify POS offers a modular and extensible system that adapts to your business needs as you grow. While many essential retail functions are built into the platform, Shopify POS seamlessly integrates with a wide network of third-party apps, allowing you to expand your store management capabilities without any complex customization. 

For example, apps for employee scheduling, customer relationship management (CRM), and advanced reporting can easily plug into Shopify’s POS, helping you manage staff, inventory, and customer interactions all in one place. This extensibility improves your store's operational efficiency by reducing manual processes and centralizing data across all your tools.

Inventory management

Retailers need to be online to maximize their sales, but it’s hard to maintain consistency across all channels, processes, and people. You may find it challenging to distribute inventory correctly across all channels. For example, customers may prefer to purchase small items at your physical location and order bulky items online. 

Knowing your customers’ preferences can help you distribute your inventory better. That’s why accurate data on customer purchasing habits is important. 

Inventory management is the system you create to organize inventory throughout the supply chain. It includes everything from ordering goods to properly storing items. An efficient inventory management system enables your business to maintain the optimal level of inventory.

Retailers can avoid costly overstocking and stockouts by adopting inventory management software that syncs real-time data from both online and physical stores. This ensures better customer satisfaction and cuts unnecessary storage costs and prevents lost sales. Automating purchase orders based on low-stock alerts can further streamline the supply chain and improve operational efficiency.

Payments and order processing

Retail operations include the payment methods you accept and how you process them at checkout. Most retailers have a point-of-sale (POS) system that enables them to serve customers, take payments, issue receipts, and keep track of sales.

Getting this part of retail operations right is two-fold: You’ll need a tech stack that makes it easy to process orders and regular staff training. Shopify POS, for example, offers POS hardware (think barcode scanners, receipt printers, and card readers) that are incredibly easy to use. Anyone with the appropriate user permission can jump onto the POS system and ring up orders—no heavy lifting required.

Implementing an intuitive POS system can reduce the time employees spend at checkout, improving efficiency and allowing them to serve more customers faster. 

Promotions and pricing

Modern consumers are more price sensitive than ever. While inflation has dropped since its peak in 2022, McKinsey reports that 53% of shoppers still say that rising prices and inflation are among their concerns.

The promotions and pricing aspect of retail operations is a way to drive customers into your store. To make promotions effective, consider the following aspects of your retail ops strategy:

• Market research and competitor price analysis
• Pricing strategy—i.e., the discount or promotion customers are most likely to respond to 
• Implementation, including the terms of the discount code and when it’s active
• Tracking sales data to evaluate success 

Supply chain management

The retail supply chain is the flow of products you’re receiving from suppliers. This part of retail operations is perhaps one of the most important—you can’t generate revenue without inventory to sell. 

The supply chain management aspect of retail operations involves tasks like reordering new stock once inventory levels drop below your minimum threshold, confirming that receiving inventory meets quality control standards, and maintaining strong relationships with suppliers.

Order fulfillment

Order fulfillment is the final part of the supply chain process. It describes how you’ll get products from your stockroom to your customers. 

The traditional retail model makes this easy. Most often, customers will come into your store, pick a product off the shelves, and head to your checkout desk with their credit card in hand. 

However, there’s not always the need to stock all of your sellable inventory on the shop floor. Keeping some products in the stockroom or at a separate storage facility (such as a shipping warehouse) allows you to keep the store clutter-free. It’s the equivalent of a retail showroom that customers can visit to get a taste for your products in-person.

Your retail operations strategy needs to define the different ways orders can be fulfilled and how these are managed. That might include:

• Buy online, pick up in-store
• Curbside pickup
• Ship to home 
• Ship to store 

Employee management

This aspect of retail operations covers the practical and legal side of managing employees—from recruiting new employees to onboarding and training them. It also includes rota scheduling and ensuring that health and safety procedures are being followed.

Shopify apps like EasyTeam make this aspect of retail operations easier, without having to mentally schedule employees and text their weekly shifts. EasyTeam integrates with your POS system so you can see staff availability, let employees clock in and out, and offer commission on sales they make—all in the same system you use to manage other aspects of your retail operation.

How to automate retail operations at your store

Automate where possible

Automating parts of your retail operations will speed up your day-to-day admin, make it easier to accurately track your inventory, and help inform future purchasing decisions.

Although it’s tempting, tracking inventory with lengthy spreadsheets can get out of hand quickly. It’s time-consuming and puts you in danger of human error and poorly informed business decisions that cost your business. Instead, integrate all your POS and inventory management systems and let them do the tedious work for you. 

When you automate your inventory management with high-quality software, you get access to helpful features like low-stock alerts, automated purchase orders, and inventory reporting. 

The best inventory management software accurately syncs your data in real time as stock is sold, received, or returned. Shopify, for example, collates inventory data from every sales channel, including your retail locations and ecommerce shipping warehouse, so you’ll always know how much inventory you have on hand.

Unify online and offline selling

Customers like to view goods in person before completing their purchase online. Hybrid shopping (a blend of online and physical shopping) is the primary buying method for 27% of consumers and 36% of Gen Z—more than any other generation. 

Despite shifts towards more online purchases, nearly 3 in 4 consumers still rely on retail businesses as part of their primary buying method. Store owners need to meet customer preferences for both online and in-store physical shopping.

"Unifying our commerce stack on Shopify has noticeably improved our omnichannel customer experience and our bottom line. We’re spending less on technology, there’s greater synergy between our sales channels, and we’re cultivating more loyalty and engagement at every level of interaction,” says Guillaume Jaillet, Chief Omnichannel Officer atFrank and Oak.

Offer experiential retail

Shoppers are craving live in-person experiences. Enjoying the experience is the primary reason 35% of consumers shop in store—something you can offer by focusing on customer-centric interactions. These could be: 

• Interactive product demos 
• Workshops or classes
• Try-before-you-buy events 
• Community-based events
• Pop-up showrooms 

Experiential retail encourages customers to spend more time with your brand. For example, lingerie brand LIVELY offers free fitting sessions to help customers find the right bra size and style.

The strategy has helped LIVELY capture customers with a 60-80% higher average order value. As founder Michelle Cordeiro Grant says: “It’s much easier to repeat a purchase online once you’ve come in, done a fitting, and know your bra size.”

Optimize inventory management

Access to accurate real-time data is key for optimizing your inventory management. Be prepared to adopt new technology to make your existing inventory infrastructure more efficient. 

RFID (radio frequency identification) tags enable you to better search, identify, and track items. Unlike traditional line-of-sight barcodes, RFID tags can be read at a distance and from any orientation for quicker inventory processing. This gives you better inventory visibility with the potential of more frequent updates.

Syncing your POS with your RFID inventory management software will automatically track product sales, returns, or exchanges, saving time, and improving accuracy. 

Start performing quarterly inventory counts in cycles. Instead of counting everything at once, break it down into sections. Spend one cycle counting one area or type of inventory and the following counting period on another item type or section in your warehouse. These inventory counts will help reduce the chance of costly overstocking or frustrating stockouts. 

📌Pro tip: Shopify POS comes with tools to help you control and manage your inventory across multiple store locations, your online store, and warehouse. Forecast demand, set low stock alerts, create purchase orders, know which items are selling or sitting on shelves, count inventory, and more.

Streamline checkout 

In retail, the online shopping cart abandonment rate sits at around 70%. Streamlining your checkout process means you’ll make it easier for shoppers to click buy and follow through on their orders. 

In your physical locations, using a mobile POS system enables store staff to take payments anywhere in the store and virtually eliminates lineups to pay at checkout. This line busting tactic gives customers an efficient checkout experience.

Optimize returns and exchanges

Total returns account for $200 billion in annual lost sales for U.S. retailers. But returns don’t need to represent the end of the customer journey with your business.They’re an opportunity to deepen your understanding of your customers’ requirements.

BORIS (buy-online-return-in-store) offers the chance to meet and convert customers personally. Use the opportunity to learn more about the exact product specifics your customer is looking for and help them find it.

To encourage customers to shop with your brand again, offer a return to gift card option so they can choose to buy something else at a later date. 

Do I need to hire a retail operations specialist?

Sometimes, managing the day-to-day running of a retail store is too much for one person to handle. It’s why many store owners hire a retail operations specialist to take ownership of processes and procedures, giving you more free time to spend on higher impact tasks that will grow the business.

The responsibilities of a retail operations manager are generic—they might record inventory one day and create a loss prevention strategy another. But at a high level, it’s this person’s job to: 

• Record inventory and restock when required
• Implement health and safety procedures in-store 
• Follow opening and closing procedures
• Train retail employees on how to follow procedures
• Suggest new retail technology (and own the implementation of it)
• Experiment with new sales techniques

Improve retail operations at your physical location

Now that you know the core elements of retail operations, you’re ready to put in place these tactics to improve your retail operations. Whether you’ve just set up your first online shop or are expanding to a physical store, these strategies will help your business succeed.

Shopify POS has all of the features you’ll need to manage retail operations, whether you’re a one-store brand or a retailer with multiple locations. From inventory management to staff scheduling apps, try the best-in-class POS system with essential features baked in as standard.

Retail operations FAQ

What is the meaning of retail operations?

Retail operations is a broad term that describes the regular tasks employees undertake when running a retail store. This includes managing staff, maintaining inventory, ensuring customer service standards are being met, managing the store budget, and ensuring store safety and security.

What is considered a retail operation?

A retail operation is any type of business that sells to customers in person. Examples include pop-up shops, permanent brick-and-mortar stores, and shop-in-shops.

What does a retail operations team do?

It’s a retail operation team’s job to manage the day-to-day operations of running a retail store. This might include managing inventory levels, offering excellent customer service, scheduling employee shifts, optimizing the store layout, and maintaining store safety.

What are the 5 S's of retail operations?

The five S's of retail operations are systems, standards, stock, space, and staff. The best strategies encompass all five.