across the world
Why Retail Businesses Fail: Tips to Survive and Thrive
World over, the retail industry is in a state of flux. Hyper e-commerce activity triggered by the COVID-19 pandemic along with supply-chain imbalances brought about by global geo-political uncertainties have put undue pressure on retail businesses. As a result, many have shut shop, while many others are continuously struggling to stay afloat.
What are the Reasons Why Retail Businesses may Fail?
It is important to understand why retail businesses may fail. First, there are factors that are beyond our control, such as the global pandemic and territorial wars. Then there are factors that are controllable but require sound business knowledge and practices.
While uncontrollable factors are often difficult to anticipate and prepare for, every retail business should have complete command over controllable factors and fortify itself with necessary steps and measures to avoid reasons why retail businesses may fail.
Here are instances of controllable factors which, when neglected, invariably contribute to a retail business’s failure:
- Inadequate understanding of the market:
- Poor knowledge of the customer demand
- Failure to adapt to changing trends
- Poor control over business operations:
- Lack of inventory planning and control
- Faulty resource management
- Cumbersome operations and poor productivity
- Lack of effective management
- Weak financial management:
- Inefficient cash management
- Poor collections and heavy bad debts
- High operating costs
- Poor gross margin
- Heavy unplanned expenditure
- Inadequate records management and accounting
- Out-of-control Balance Sheet
- Poor planning and budgeting
- Inability to use technology-related solutions, including appropriate accounting software, CRM, data analytics
How Can Retail Businesses Save Themselves From Failing?
First, they have to ensure their business does not have the above-mentioned pitfalls. Retail businesses often require heavy capital outlays from the very start. Stocking up adequately is imperative in order to capture customer interest for the products.
Next, advertising and marketing take up a big chunk of the budget. These obviously put a lot of pressure on the business with respect to its productivity and performance.
Retail businesses, therefore, have to ensure that the fundamentals are strong from the very beginning:
- Market research should be strong and responsive
- Operations management should be effective ensuring efficient operating models and high productivity
- Financial management should be real-time and prudent
- Use of technology should be an enabler helping the business to improve its outcomes and ensuring agility and flexibility
Additionally, retail businesses have to evolve real-time, stay constantly updated on market developments, and re-work business operations in response to changing trends and market movements.
How Cogneesol Can Help Retail Businesses Thrive?
At Cogneesol, our retail solutions are designed to help businesses succeed and build a competitive edge. Our retail offerings span across business strategy, operations re-modeling and management, finance and accounting, and taxation support to data insights.
Through years of dedicated business process services, we have helped retail clients grow and expand into newer verticals and markets with dedicated support for their financial management, data analytics, customer relationship management, supply chain management, and tax and customs requirements.
Our teams are oriented to understand the business’s unique positioning and work with the teams to identify improvement areas and maximize opportunities to help them thrive in the marketplace.
Here’s an overview of our retail offerings across the entire ecosystem:
- Accounting Services: Our accounting services include: Labor costing, expense reports, bank reconciliation, contract negotiation, transaction structuring, production cost budgeting, inventory management, financial forecasts and projections, monthly, quarterly, and annual accounts, accounts management, human resource and payroll services, internal control, and assurance procedures, daily bill management – payments / direct debits / standing orders, financial statements – audits, reviews, compilations, and agreed-upon procedures, tax planning and consulting, fraud prevention, and detection to address the challenges faced by retail businesses.
- Data Management: Our data management services include: Data quality services, employee productivity, product data management, pdf conversion services, customer data verification, syncing data with partners, e-commerce catalog management, document management services, development and data processing, reference, and master data management
- Merchandising and Buying Services: Pricing support, planning of space, assortment organization, merchandising analytics, management of master data
- Services for Marketing and Store Operations: Back-office support, analysis and reporting, management of promotions, marketing, and loss prevention, tracking of competitor pricing
- Services for Online Operations: Web analytics, support for marketing, promotions, social media, and order management, management of digital content, support for web merchandising
- Supply Chain Management Services: Replenishment, order management, procurement support, inventory management, warehouse management
- Technology Services: Application design and development solutions, server & it infrastructure management, cloud management services, AI and Machine Learning solutions, support for platforms and tools
What Sets Us Apart
Cogneesol’s biggest value proposition is partnering with our client organizations to achieve their strategic goals. Our team of dedicated retail experts, be they accountants, data analysts, market researchers, or tech professionals, become an extension of the client SME teams, ensuring success at every step.
Additionally, one of our biggest USPs is that our outsourcing retail accounting services are competitively priced and can be tailored to specific requirements. As a result, we offer better deals vis-à-vis other service providers. With our ‘skin in the game’ approach, we bring about significant savings, thereby improving the business’s cash position and enabling it to make strategic investments for growth and expansion.
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