Five ways to cut retail costs now

Running a retail business can be a costly endeavour, no matter how large or small your company is.

In an era where businesses are struggling to operate amid varying lockdown restrictions, it’s more important than ever to reduce your expenses.

If you’re eager to streamline your business and safeguard your profits, take a look at these five ways you can cut retail costs now.

1. Prioritise customer retention

Acquiring new customers is typically more expensive than retaining your existing client base. By focusing your marketing on increasing customer loyalty and boosting customer lifecycle value, you can optimise your existing customer base and improve your marketing ROI.

2. Reduce essential expenses

There are some business expenses you can’t cut out completely, however much you might like to.

Despite this, you can make savings by reducing the cost of your essential expenditure. Your utility bills are a critical expense, but you could be paying over the odds for energy.

By finding the best electricity rates and the lowest business water prices online for example, you could make a significant saving. If you’re operating multiple retail stores, securing lower rates across the board could make a considerable difference to your overall operating costs.

3. Negotiate cheaper rents

Most businesses lease commercial premises, rather than buying them outright. If your rental agreements are due to come to an end soon, now could be the perfect time to renegotiate a better price.

However, don’t be discouraged if you’re still partway through your lease. Due to the current circumstances and the economical impact of Covid-19, many landlords will be willing to offer reduced rents, even if it’s on a temporary basis.

4. Increase online sales

E-commerce can be far cheaper for business owners than face-to-face sales. When you don’t have to fund multiple retail units and you can operate with fewer staff, more of your turnover equates to profits.

By increasing the online arm of your business or introducing online sales, you can gain a larger share of the market while making a minimal investment. In fact, many businesses are closing some or all of their retail stores in favour of operating online. 

5. Increase automation

When your in-house processes are automated, they can be completed more quickly and with a greater level of accuracy. In addition to this, you can rely on a smaller workforce without having a negative impact on your output.

Although you may need invest in equipment in order to increase automation, your subsequent operating costs could be greatly reduced. 

What is the future for retail?

The ongoing impact of Brexit and the rise of online shopping meant that the retail industry was already experiencing tricky times. Now that Covid-19 has made operating even more difficult, shops and businesses are facing a whole new set of challenges.

However, there is still significant demand for offline and online retailers. Providing businesses can maintain their cash flow over coming months and embrace innovative recovery strategies, the retail industry can continue to boom.