SOPs for Retail Industry
Retail can be related to both goods and services. However, strictly speaking, service retailing constitutes a part of the service industry and our focus here shall be on businesses engaged in product retailing. But even in product retailing, the service element is present in the form of additional, value-added services to retail customers like parking facility, home-delivery (if it is free), multiple payment options, facility of online ordering, refund and exchange, etc.
Coming back to product retailing, the most common and contemporary forms of retail sales channels include brick and mortar/physical stores, eCommerce/online stores/online marketplaces, omnichannel and multichannel.
Irrespective of the retail sales channels in use, sound business process management (BPM) and SOPs (Standard Operating Procedures) are critical to ensure robust operations and improved sales for every retail business enterprise.
Challenges Faced Due to Poor Processes and Management Systems
Poor inventory Management. To ensure the availability of the right merchandise at the right times at the right places and having this objective consistently accomplished, a strong inventory management system is required. It will not happen on its own. For example, if there is no mechanism to measure and report reordering level, how will the purchase manager know that an order has to be placed? Although activities like these are mostly automated nowadays even the automation solution has to be designed with specific rules of programming so that it delivers its performance as required for business.
Loopholes in Quality Control. How a retail enterprise defines quality significantly affects what they do about it. Quality control is not restricted to products but also the facilitating services, business processes and operations because these will affect what customers actually receive. For example, there is no way for medical stores to check the quality of the medicines provided by suppliers. The same is true for grocery and departmental stores dealing in packaged goods. Even dark stores dealing in packaged goods cannot do much about what is inside. But in spite of these limitations, quality control is still possible on the grounds of checking expiry dates, visible or apparent damages, poor or faulty packaging, weight measurement, matching packaging details with order details, etc.
Disoriented Order Processing and Fulfilment. Going on the lines of eCommerce marketplaces, free or chargeable home delivery is becoming commonplace for brick and mortar and brick and click retailers. Processing an order involves a series of activities that must be carried out in the right sequence till the point of delivery keeping in mind the established standards and promised value to customers. If these activities are not planned with a detailed and definite operational roadmap, the chances are extremely high that the required sequence would be violated and compromised with patchworks putting at stake the value intended to be delivered to the customers.
Benefits of SOPs to Retail Industry
Robust Control Over Inventory. When the inventory management activities are defined in terms of keeping stock of inventory levels, placing reorders, format of reordering, choosing suppliers based on prevalent requirements, assigning of authority and responsibilities with these activities, specifying timelines, and quality check and reporting, it lends immense clarity and precision to what it needs to be done to ensure strong controls over inventory management. With a good grip over inventory with SOPs, retail businesses gain the agility to adjust their purchases as per demand forecasts and save investing on idle inventory.
Prompt and Effective Customer Service. It needs no mention that reputed brands are way ahead of their small and big competitors and everyone in between when it comes to customer service. As SOP consultants for retail industry, we have observed for long that customer service has less to do with their deep pockets for technology and automation, which helps though, but it is more about having stronger, SOP-driven processes designed to deliver superlative customer service. Just like the need for an operational roadmap for any other business process cannot be undermined, the same goes for customer service also. Retail business, online or offline, is a battle that is fiercely fought on customer service.
Seamless Customer Experience. When a brick and mortar or an online retail business turns omnichannel or multichannel, it necessitates them to secure a seamless or unified customer experience across channels. SOPs are capable of integrating business processes and operations spanning across multiple channels. For instance, in a brick and click departmental store, if a customer who has placed an online order has come to pick up their purchase, s/he should not be made to wait because of any rush caused by walk-in customers. They must be given a designated timeline during the order placement or within a reasonable time. SOPs can specify this timeline by assigning the responsibility of getting the order ready within a time period regulated by order size and availability. If it helps identify the need for process automation or adequate staffing, it must be accepted with thanks to SOPs.