How Small Increases This Year Sustain Large Increases from Last Year in Retail
Although sales increases this year feel sober compared to last year's phenomenal growth it is important to remember we are not giving back that revenue.
The world of retail is constantly evolving, and businesses are often challenged to sustain or surpass the large increases they achieved in the previous year. A remarkable aspect of this phenomenon is how small, incremental changes and strategies implemented in a new year can effectively sustain the momentum of significant growth from the previous year. In this article, we will delve into the strategies and examples that demonstrate how small increases in retail operations and consumer behavior can keep the growth engines of the retail industry running strong.
Customer Loyalty and Engagement
One of the fundamental strategies in retail is building and maintaining customer loyalty. Small increases in customer engagement and satisfaction can go a long way in retaining a loyal customer base and sustaining growth. Loyalty programs, personalized shopping experiences, and excellent customer service contribute to these incremental increases. When customers are consistently satisfied and engaged, they are more likely to return, spend more, and even refer friends and family to the retailer, which can significantly impact sales and revenue. In my recent article in Indie Insights, I showed how small improvements in UPTs and your Average Sale can reap huge dividends.
Inventory Management
Efficient inventory management is a critical factor in sustaining retail growth. Even small improvements in inventory control, such as reducing excess inventory or optimizing the fresh flow of new inventory can lead to better assortment and investments in the right categories. Focusing on classifications that are trending well, increasing purchases in trending categories and staying cautious in non-performing categories can increase revenue and directly contribute to sustaining or even increasing the growth achieved in the prior year.
The following classifications in September performed well for our clients against September 2022:
Men’s and Women’s Casual Pant + 9%
Men’s and Women’s Denim + 10%
Women’s Skirts + 11%
Men’s and Women’s Sweaters + 5%
Men’s and Women’s Sweatshirt + 16%
Data-Driven Decision Making
In the age of data, retailers can harness small increases in data analytics and insights to make more informed decisions. Analyzing purchase patterns, taking strategic markdowns, and continuing to flow fresh goods in positive trending classifications can refine their tactics to make gains. Data-driven decisions often lead to incremental sales growth and improved overall performance, helping to maintain the momentum from the previous year. Management One forecasting, which is driven by AI data analytics and edited to each location's potential, provides this map to our retailers daily.
The fashion retail industry is a prime example of how small increases can sustain or amplify the growth achieved in the prior year. Retailers who implement strategies like personal styling services, improved inventory turnover, and data-driven trend analysis to maintain customer interest and capitalize on emerging fashion trends, can experience positive results. Even minor adjustments in these areas can have a significant impact on sales, thus sustaining the retail growth trajectory.
Indie Retail’s ability to sustain large increases from the previous year through small, incremental changes is a testament to its adaptability and consumer-centric approach. Strategies like customer loyalty, inventory management,, and data-driven decision making all play a vital role in this process. By continuously fine-tuning your operations and staying attuned to evolving consumer preferences and trends, you can successfully navigate the challenges of sustaining growth even when the overall sector is slightly above flat.
If you have any questions or feedback, please let me know in the comments section below. Please contact Management One for a free discovery call to review your current position relative to last year and evaluate which opportunities could help set your business up for success in the coming year. We are always happy to discuss your results and share solutions for you and your indie retail business.
Onwards, and Upwards,
Marc Weiss - Co-founder, Management One