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How To Adapt To The Future of Retail

The retail industry is ever-changing. Due to constantly evolving consumer behaviors, it’s the retailers’ responsibility to keep up, lest they risk falling behind their competitors.

Considering how the retail industry is famously cutthroat, businesses must always adapt to ensure success and survival.

This year the entire industry has taken a huge knock. It’s hard to predict where retail will be after recovering from the devastating impacts of the pandemic. That being said, if you want your business to survive and thrive post-pandemic here are some future trends you should get ready to adapt to.

Increased focus on customer experience


Customers these days expect more from retailers. Even though there seems to be a prevalence of anti-materialism amongst consumers, retail continues to thrive. However, there’s one caveat: millennials and Gen Z, the demographics that happen to have the most spending power at the moment, prefer experiences over products. It is therefore imperative that you go above simply advertising and selling a product.

Retail Customer Experience points out that in order to do this, you must optimize your strategy and come up with ways to improve their shopping journey. You can try having omnichannel tech-driven journeys, have digital in-store promotions, and share custom and co-created content. Whatever you decide to do, don’t stray away from focusing on great experiences and keep up with the latest in customer expectations.

With a bit of vigilance and creativity, you can create personalized experiences that will keep customers coming back for more.

Rethink your growth


As your retail business grows you must consider the strength of your company. If there is one thing this year has shown, it is that every type of business can instantly find itself under threat due to outside events.

This is why owners need to ensure they are better protected in the future. Part of this process could be adapting to a new legal structure.

For instance, you may have started out as a sole proprietorship or partnership, but as your assets grow so do the number of risks to your company. You may also need to change your company structure due to success. An article on how to ‘Change Your Business Structure’ outlines that when you see clear evidence of opportunities that you cannot capitalize on due to your current structure, take it as a sign to switch to a different one.

You can consider separating your personal assets from your retail business’ assets by opting to form a Limited Liability Company (LLC). It’s a business structure that combines the benefits of a corporation, partnership, and sole proprietorship, ensuring that the owners are not personally liable for the company’s debts or liabilities.

Setting one up or switching to this structure is easy and straightforward. A run-through on how to form your own LLC by ZenBusiness notes that all you need to do is come up with a name, appoint a registered agent, file articles of organization, build an operating agreement, and apply for an EIN. Once you’ve followed these steps, you will be less susceptible to losses and any risk that comes with unexpected events happening out of your control.

Go digital


There’s no denying that the modern consumer is almost always tethered to their digital devices. Everyone seems to be digitally savvy, so it’s only right that you situate yourself where they are. An article on Total Retail highlights how retail businesses with a strong digital presence are already ahead of the curve this year.

Now that we’re in a pandemic, consumers cannot leave their houses as much and are resorting to digital channels to find new brands and purchase items. You can use this as an opportunity for innovation and customer acquisition by optimizing your current digital strategy and making it more appealing and available to customers.

Of course, you must not forget your internal operations as well. As noted in our ‘Risk Factors in Retail to Learn as a Manager’ post, you should be wary of cybersecurity risks that threaten to endanger private data when you go digital. On top of cultivating a strong digital presence, it’s best to hire cybersecurity specialists to audit your software and systems.

It would also help if you used digital solutions to streamline your operations. An app like Pazo is ideal, as it digitizes your checklist, handles issues with operational excellence, offers real-time insights, and so much more.

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Risk Factors In Retail To Learn As a Manager

As a brick-and-mortar or online retailer, you must take steps to protect your business from common retail risks. Companies are faced with inherent risks, mainly because the retail industry is faced with changing trends and designs. Retail managers are encouraged to embrace dynamics like changing consumer preferences, vast online options, and global economic uncertainty.

They have to balance several factors like quality, price, brand image, location, marketing skills, and expense tracking. They mostly have to be wary of cybersecurity risks that threaten to siphon off private data. Here’s a list of the top risk factors managers must learn and keep a close eye close on.

Data Breaches and Digital Theft

According to a TransUnion blog post report, cyber fraud stands at approximately $31 billion in 2020. Digital criminals mainly target online retailers in several ways. For example, they use phishing scams to convince unsuspecting employees to reveal their credit card information.

An attack disguised as a distributed denial-of-service can send a company on its knees by crippling its servers and preventing transactions. It overwhelms a website with hundreds of requests from IP addresses that are probably compromised.

Once the website is overloaded, it slows down and temporarily goes offline. Customers can’t access the website or complete orders, and this leads to loss of business. Criminals can also hack the physical point-of-sale systems of brick-and-mortar retailers.

A retail manager can manage this risk by replacing the outdated PoS equipment. It’s also recommendable to hire cybersecurity specialists to audit the software and systems.

Insider Attacks

According to a Verizon report, 34% of the cyber-attacks in 2019 were facilitated by internal employees. Employees are increasingly becoming easy targets for intentional and unintentional data leaks. Retailers need to have policies about the use of personal USB devices at the workplace. In the past, these have been used to capture massive information that helps fraudsters attack a business.

Inventory Damage

Businesses that store goods in warehouses can be affected by weather events and natural disasters. Natural disasters not only damage physical structures but also frequently cause power outages.  This results in product losses, especially for retail outlets that sell perishable goods.

A retail risk management strategy entails purchasing commercial property insurance and customizing it accordingly. Some general retail insurance policies can also cover inventory damages.

Physical Theft of Items

Retail store operators have been faced with the risk of losing items to shoplifters and criminals for a long time. Data from the National Retail Foundation shows that retailers incurred theft losses of more than $50 billion in 2018.

Retail managers can thwart this risk by installing physical security systems like sensor-product tags and labels. They should also invest in video-monitoring equipment and locked display cases for small valuable items.

It’s also crucial to train employees to be on the lookout for shoplifters. Some traditional telltale signs of thieves include attempting to distract employees, switch price tags, and move in large groups. A good risk management strategy entails purchasing industry-specific inventory insurance covering fires, theft, and other losses.

Not Monitoring Competitors

Failing to monitor the activities of your competitors may not be an obvious risk. However, it can put your retail business in jeopardy if you lose your customers to your rivals. For example, a grocery retail business with no online business can check how its competitors are performing on social media platforms.

If most of the rivals are marketing themselves online, it would be wise to establish a digital presence. It also helps to research their prices to develop a competitive pricing edge.

Lack of Technical, Communication, and Negotiation Skills

For many retail businesses, having a balanced mix of these skills is usually just wishful thinking. It’s not uncommon to come across professionals with excellent technical but no communication skills. Others are great at relating with customers but can’t defend their products as they lack the necessary knowledge.

While technical skills are easier to develop than soft skills, the latter is more important in influencing customers. The ideal risk manager must know how to relate with people as much as they know about their products.

Forced Closure

Retail businesses face the risk of forced closure due to several factors. For example, disasters like coronavirus can lead to unplanned closure or loss of income. Vandalism or fire outbreaks can also lead to an untold loss of a steady source of income.

Consider getting business interruption insurance that protects unforeseen closure. Unfortunately, losses due to Covid-19 might not be covered in such policies.

Avoid the temptation to cancel your business insurance if faced with closure amid a pandemic. This could lead to more damage in the long-term as it leaves your business unprotected against other risks.

Final Thoughts

A retail manager can’t afford to ignore risks that face a retail business. Retail stores have a substantial investment in equipment and inventory, alongside the physical structure. All these require comprehensive vulnerability management solutions.

Check out PAZO

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Online and Offline Tools to Increase Customer Satisfaction

Nowadays, companies are very aware that they need to take a multi-channel approach when it comes to addressing customer satisfaction and their needs. Even brick-and-mortar stores need to maximize the tools available to them, and those tools can often include online platforms like social media.

In a previous article on the blog, we wrote about ‘Improving Store Operations with Smarter Schedules and Better Budgeting‘.

With a world that’s now more highly connected and information-rich than ever before, customers expect better service and higher quality experiences from businesses. While our previous entries have been about addressing challenges in internal company structure and operations, it’s time to look at the customer-facing side of the equation. Here are a few tools you can use to address and improve customer satisfaction through marketing.

Promotions

Finally, some of the best tools a company can use in order to increase customer satisfaction and motivate return customers are loyalty programs and promotions. These promotions can be made available through online means such as email marketing and digital ads, but companies looking to make an impact shouldn’t discount traditional methods like flyering and direct mail. In fact, making use of offline and print materials might actually go a long way towards improving the shelf-life of your marketing strategy, as well as bringing your services closer to home— literally.

Triadex Services suggests that direct mail’s shelf life comes in at an average of 17 days, much longer than digital ads or online marketing. A direct mail campaign is a concrete, memorable, and also brings your company to the forefront of a customer’s mind. Depending on your approach, you can direct your customers to make purchases in-store through coupons and other promotions, or online by directing them to your website. It’s one of many effective ways to cement your presence both on and offline and show your customers you have their convenience in mind.

Convenience

Companies are now investing more in their online presence and services in order to provide their market with a seamless, multi-channel experience that addresses customer needs. This many-pronged approach requires an equally appropriate marketing strategy, which is why omnichannel marketing has been on the rise.

Statistics compiled by ClickZ have found that companies marketing through three or more channels have led to an 18.96% engagement rate, compared with only 5.4% on a single channel approach. Purchase rates are 250% higher when companies adopt an omnichannel strategy, with customers spending 13% more on average with campaigns that used three or more channels.

Accessibility

Customers are spending more and more of their time online, and much of that access is through smartphone use. Smartphones have become an integral part of our daily lives, and consumers are beginning to look to online marketplaces more and more. An online presence is essential in the digital age, but companies may actually be underestimating just how much.

A report by Deloitte in 2012 found that 58% of consumers with smartphones had already used it for store-related shopping, and that number has only ballooned with increased smartphone adoption. Businesses need to ensure that their online presence and materials are convenient and accessible for smartphone users, and that includes optimizing websites, informational and promotional materials, and customer relation channels.

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The Indian Retail Industry

Organized retailing and e-commerce are two channels that have brought in superior supply chain capabilities and hitherto unseen price efficiencies that have brought down the end cost for the customer.

More than 85% of retailers have not been able to meet their original vision and have had to rethink their goals. A lot has been said about the disruption caused by the revolutionary pace of digital access which has made retailers rethink their strategy and value proposition.

A large number of retailers encountered myriad challenges of execution in an environment where the quality of real estate, talent, and infrastructure were not keeping pace with the expansion plans of the retailers.

The new challenges retailers around the world, including indian retail industry is facing today include engagement, digitization, trust, and disruptions.

The Challenges Retailers Face

Four major reasons many offline retailers have struggled are:

  1. On-ground realities being different than envisioned – Major retailers announced massive plans to expand and grow in an under-penetrated market, but the ground realities they encountered allowed only a few of them to remain true to their envisioned scale of business. 90% of the retailers could not achieve their envisioned scale.

Retail challenges

  • Executional challenges –  The industry is dominated by suppliers that have a stronghold over retail margins. Although the balance of power between suppliers and organized players is changing, organized retail’s low contribution to the suppliers’ overall business continued to pose a challenge on extracting higher intake margins. Added to this, Indian customers being value-conscious puts pressure on price points, resulting in lower size per transaction.

Also Read: Optimizing the Retail Opportunity in Covid-19 pandemic

  • Dilution of value proposition – 35% of retailers failed to achieve scale on account of the lack of a clear value proposition. In an attempt to simplify operations and scale rapidly, retailers positioned a largely homogenous offering that did not reflect a deep understanding of local customer preferences and mindsets. Moreover, challenges to profitability and capital allocation for scale limited the investments in strengthening the value proposition for customers.

internal factor preventing profitability
internal factors

retail industry overview

  • Competition from well-funded online players – Physical retailers were hit hard by the emergence of e-commerce as an alternative channel. E-commerce sites having frequent sales and discounts caused a shift in consumer preference towards online retail. Approximately 48% of consumers preferred online shopping because it provided better prices and discounts.

retail industry comparison

Growth Opportunity

There are close to 10 million stores in India and about half a million distributors. Less than 2% have been digitized so far.

Organized retail in India accounts for 8% of an approximately 600 billion USD dollar market. Compared to the size of other South East Asian markets, this figure indicates the tremendous scope for growth for organized retail in India, both in terms of penetration as well as predicted CAGR till 2020.

growth opportunity

Many macroeconomic fundamentals continue to boost India’s high-potential retail market. These include:

  • India is one of the fastest-growing economies in the world. It has the second-largest population and accounts for 17%3  of the world’s population and 3% of global consumption. 
  • India has the highest consumption growth amongst the top 10 countries ranked by size of household final consumption expenditure (HFCE).
  • Per capita income in India has nearly quadrupled since the start of the century, rising from 452.4 USD in 2000 to 1,593.3 USD in 2015. This has put more disposable cash in the pockets of consumers, who are not hesitant to spend it.
  • The consumption growth in Indian retail industry can be attributed to the democratic rise in affluence, which is not limited to just the metros or a limited income bracket.

Trends Brands Are Adopting

Brands have a large distribution play and they have worked with small stores for years. But they were always dependent on data from distributors and thereby pushed the product to small stores rather than understanding what is sold by region.

  • Reliance Retail plans to use artificial intelligence, machine learning, blockchain, and cloud computing to help kiranas become competitive. With this move, it will gain data of 900 million Indians, which will help it become a full-stack data company. Not only will it have B2C consumption data, but it will also have B2B data from kiranas and Jio.
  • SnapBizz, which makes point of sale (PoS) machines and billing solutions, offers an on-demand video platform for small stores about the offers available on various products, helping them increase margins by pushing up sales.
  • Bizom provides sales force automation and supply chain automation solution, increasing sales force productivity and sales growth
  • Mobisy has created a network of its own distributors or stockists, all of which are multi-brand. This allows a kirana owner to get products of various brands from one stockist. The platform tracks order management, distributor management, a retailer app, BI and analytics, field force management, claims management, van sales automation, and channel management.

Other Stats

retail market overview in india

key areas in retail workforce management

Indian Retail

Source 

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Emerging Trends in the Facility Management Sector- India

  • The India Facility Management Market Trends anticipated to record a CAGR of 18- 24%, over the forecast period (2020 – 2025). The growing emphasis on outsourcing of non-core operations and growth in the real estate sector is expected to drive the Indian market for facility management and services.
  • The growing trend of outsourcing the non-core operations in the country is expected to increase the demand for Facility Management Services. The facility management services are outsourced services and are primarily preferred by companies where a high standard of cleanliness is expected.
  • FM industry is gearing up for a historic shift towards automated services, with considerable investment of manpower and resources toward creating technology-driven services platforms
  • The biggest challenge faced by the industry is to transform the perception of FM services beyond traditional housekeeping services. Building maintenance is inarguably the core of FM services, but today also spans sophisticated requirements spanning Integrated Facilities Management, Industrial Facilities Management, Specialised Engineering Services, and Soft Services.

Snapshot

facility management trends 2020

Growth Opportunity

future direction of facilities management

The Indian Facilities Management industry is in the midst of rapid development. The anticipated growth in the market can be attributed to:

  • Growth in commercial and residential real estate
  • Increase in SEZs, mega food parks, smart cities, and housing projects
  • Greater awareness of cleanliness and hygiene amongst industries
  • Reduction in operating costs of the facilities/buildings
  • More outsourcing by corporates who were hitherto insourcing
  • Inability to provide specialized cleaning by inhouse personnel
  • Increased business activities from Tier-2 and Tier-3 cities
  • Increase in outsourcing of facility management services by Government offices

facilities management industry statistics

Trends

facility management trends in Indian industry

  • Generation Y –  the tech-savvy, connected, urban, and educated millennials – will make up half of the global workforce by 2020. Hence, keeping in mind facility management trends FM professionals are investing more in balancing the preferences of different generations, thereby, contributing to the market growth. 
  • Smart technology and artificial intelligence are also expected to provide the market for facility management solutions with significant growth potential. According to CBRE, there will be 25 billion connected things in use by 2020 up from 4.9 billion in 2015
  • It is predicted that intelligent buildings will be commonplace by 2020. Every asset or device within the building, such as lights, sensors, windows, HVAC units, doors, and CCTV, will have a unique identity and be fully integrated into a network. This trend requires huge planning and, therefore, solutions and support from FM providers.
  • Among the IoT applications, FM providers find a huge expansion scope. While for smart buildings, sensor-controlled HVAC and smart navigation, including emergency evacuation are used, however, for resource management, sensors on resources, like rooms, desks, and parking spaces, providing real-time data on space usage and availability are present.
  • Automobiles and transport also become an area of interest for FM providers as driverless cars bring auto traffic management and navigation, and sensors collect data on infrastructure alerting real-time issues and scheduling preventative maintenance- based on predictive analytics.
  • The total number of professional service robots (covering use in logistics, defense, medical, and field sectors) sold in 2018 rose by 61% to more than 271,000 units, up from roughly 168,000 in 2017. As sensor technologies open up new robot applications, the total number in facilities maintenance could be much larger.

Other Stats

major players in industry

FM services in India

How Pazo Helps Make Facility Management Better

Keeping in view the Facility Management Trends 2020, Pazo helps maintain brand standards and consistency across all the multi-site facilities you operate by making maintenance teams more productive. Pazo empowers the deskless workforce to:

    •  Make operations efficient: When routine operations are carried out in the most efficient way, customer satisfaction comes naturally. It’s not easy to manually keep a tab on every employee and task being carried out in different areas in the facility, more so if you’re a multi-location manager. Technology has advanced quite a bit and now, working smarter has become easier. Using Pazo you can connect to all your team members instantly, get real-time data on the tasks being carried out across all your locations and raise a ticket and assign a turnaround time to ensure issues are resolved by the designated employees within the stipulated time
    • Increase asset life cycle: Save time and resources by digitizing your tracking processes. Have tasks assigned to the field workforce through easy and detailed checklists to rest assured that all critical assets are maintained in optimal condition? Having a preventive approach and inspecting equipment on a regular basis can help maintain them better. Software up-gradation, repairing equipment, re-installation of equipment, eliminating possible machinery defects, etc. comes under timely inspection. Inspections can save costs spent on managing damages and control. Assigning checklists to departments ensures that these important inspections are not missed out and also allows you to take corrective measures as fast as possible
  • Standardize operations & service delivery across locations: A successful facility consistently delivers excellent service to all its occupants. Service quality needs to be consistent, especially when you’re a multi-chain operator
  • Integrate with PMS solutions: Integrating PMS solution with work orders and routine operations, retrieving O&M manuals, floor plans and asset information have improved value to organizations of up to 45%
    • Integrate to IoT devices: Internet of Things is becoming a convenient asset in improving performance, efficiency, time, and cost savings in integrated facilities management services. When utilized the right way, IoT systems can reduce energy bills and provide insightful data to improve operational efficiency and provide a better tenant/employee experience. CBRE’s report has noted that 25 billion connected things will be in use by 2020 up from 4.9 billion in 2015
    • Manage Issues: Report issues and breakdowns with location and images with real-time insights, ensuring that the department resolves the issue in the shortest time to ensure customer satisfaction
  • Improve Communication: Ensure clear and effective communication between departments at the individual facility locations and the head office. Coordinate task assignment and completion, surveys, feedback and compliance across all locations you operate to ensure consistency in customer satisfaction and SOPs

Source: 

Want to see how PAZO can make your routine operations better? Talk to our Client Success Officer today

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Global Innovations in the Facility Management Industry

The facility management market has been predicted to grow from $34.65 billion in 2018 to $59.33 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 11.4%. 

The facility management industry has moved on from the narrative of just managing buildings. There have been quite a few technological strides in the facility management space, impacting how routine operations will be carried out. With the advancement of technology, the operating environment and tenant expectations have changed and having a digitally-deprived facility relying on manual and paper-based processes don’t quite cut it anymore. 

Today, businesses are focusing on employee productivity with the workplace expectations and dynamics setting new standards. Efficiently run facilities, where unforeseen outages and operational disarray are kept at bay provide better occupant experience. The future workforce study conducted by Dell & Intel noted that 70% of the millennial workforce wants to work in a smart office within the next five years.

3 Notable Global Innovations We’ve Seen This Year

1. iOT

Internet of Things is becoming a convenient asset in improving performance, efficiency, time, and cost savings in integrated facilities management services. Two major challenges facility management companies face are lack of field staff and inflation in wages. With the help of iOT integrations, field staff will be able to work remotely and more efficiently, improving labor productivity. 

pazo-iot

Keeping facilities connected with iOT services give you field insights and patterns that can be harnessed to increase the business’ value considerably. By leveraging iOT and data analytics, facility management teams can easily:

  • Reduce asset maintenance costs
  • Customize services to individuals and groups
  • Made more accurate forecasts
  • Mitigate risk
  • Level and optimize resources
  • Evaluate performance and make informed investment decisions

When utilized the right way, iOT systems can reduce energy bills and provide insightful data to improve operational efficiency and provide a better tenant/employee experience. CBRE’s report has noted that 25 billion connected things will be in use by 2020 up from 4.9 billion in 2015.

2. BIM

Building Information Modeling is a tool commonly used by the architecture industry to create visual models of the facility. According to the 2019 survey by IMAGINiT Technologies, the percentage of owners integrating BIM data into their facility management systems grew to 24.3%. 

BIM

One of the key factors of effective facility management includes the ability to achieve real-time access to information on assets. With a BIM tool that integrates real-time data, preventive maintenance and current operational conditions become easier. Some other benefits of integrating BIM into your FM system are:

  • Improved space management
  • Streamlined maintenance
  • Efficient energy utilisation
  • Economical renovations

Integrating BI with pre-existing work orders and facility maintenance software, retrieving O&M manuals, floor plans and asset information have improved value to organizations of up to 45%

3. Automation

Automation technologies are revolutionizing the FM industry by aiding in simplifying and streamlining work processes and reducing manual intervention in routine operations.  Global Retailer’s case study showed that more than 30% of revenue spent on repair and maintenance was reduced by adopting automation technology. 

fm automation

With the advancement in technology, facility management teams can now manage maintenance, operations, sustainability, and tenant experience through mobile solutions like Pazo, built for the deskless workforce. Automation provides FM teams with:

  • Enhanced visibility throughout the entire facility workflow
  • Insights through constant analysis of real-time and historical data such as costs, vendor performance, and operational efficiency
  • Automatic escalations and alerting relevant stakeholders during emergencies

As with every decision-making within the organization, FM teams need to take into consideration how innovation will affect the facility and processes on a social, economic, and technical level. With careful thought, FMs will be able to capitalize on the technologies available in order to create a more efficient and productive environment where the team can flourish.