Effective and meaningful store management is one the most important parts of ensuring your business’s success. It covers a lot of ground, however, including building your team, sourcing and managing inventory, driving sales, creating store policies and procedures, leading by example, and marketing your business.
Here, we will look at all the hats an owner must wear to manage their store, keep everything running smoothly, and position the business for growth and expansion.
Build & Maintain a Great Team
Management of your retail store starts with building and maintaining a great team that can support you on the sales floor and help your business flourish. As a retailer, you will likely see high turnover among your employees. While this is a natural part of the industry, losing a staff member is costly for your business, so your objective is twofold:
- First, you need to recruit a large enough team that will be effective and a good fit for your business and the available roles.
- Second, you need to create a work environment that will help you keep that team and maximize its potential.
Recruit a Crew That Fits Your Brand
When recruiting your team, you should hire people who can represent your business well. Often, this means the ideal employee has interests that align with what your store is selling—they will be able to sell your products better and genuinely connect with customers on their interests.
At my boutique, my staff was full of individuals interested in fashion. I can think of a few examples of where you may have seen this:
- Dick’s Sporting Goods: Its staff is made up of athletes and sports lovers
- REI: Every worker is an expert camper or outdoor lover
As you conduct job interviews and hunt for the perfect employees to work at your store, I suggest having a list of attributes that a perfect candidate possesses. This does not mean that you can only hire people with all these qualities, but having a list of ideals can be a great way to guide your interview process and help you find candidates that will represent your brand well. You might want to include these categories in your list:
- Product knowledge: You want someone who knows about your products or industry so that they act as an expert when selling and answering questions.
- Enthusiasm: You want someone who cares and has a genuine interest in your brand and the products you sell.
- Experience: If you own a higher-end retail location, you will want someone with sales experience, preferably within your industry.
- Customer interactions: You want a salesperson who will be able to talk to shoppers, assist them, and treat them with care. People skills will play a huge role, so I suggest using a floor interview to see how prospective hires work with your customers.
A floor interview is an interview stage that typically comes after a spoken interview. It is when a candidate gets the opportunity to work with customers during a mock shift. This gives you the opportunity to observe how they might be on the job and how they interact with customers.
Consider Scheduling
Another key thing that you will want to account for when hiring your team is availability. Unlike the typical nine-to-five corporate role, retail stores are open later in the evening, on weekends, and on many holidays. Before bringing anyone on, you need to be clear about your availability expectations and ensure that you will have enough staff to cover your store for weekends, holidays, and evenings.
My suggestion here would be to draw out a weekly schedule so you can see how many people you need in your store for any given shift. For example, you might want only one person on staff for the Friday morning shift, but for the evening shift, you expect your store to pick up, so you need three people on the schedule. For holidays, sketch out your staffing needs months in advance and nail down staff members as soon as possible.
You will get a better idea of when you need more and less staff as time goes on, and your needs will change seasonally. When starting, you can use the standard formula of 2.5 employees for every 1,000 square feet. However, this can vary based on the type of store you have. Use store traffic as a cue for scheduling and ongoing hiring initiatives.
Onboard & Train Your Staff
Once you have selected the people you want for your team, you want to set them up for success with strong onboarding and training. To do your training well and reach a point of trust with your staff, you must approach onboarding in an organized manner. I suggest making a training plan with checklists of everything you need to teach for each week of onboarding.
For example, at my store, I covered all computer operations on week one. This was the most technical part of the associate role, so I wanted to give lots of time for learning. From there, I would train on store organization and processes on week two and use week three as a chance to practice everything. At the end of week three, we would do a check-in to review anything and assess whether the new employees are ready to work solo shifts.
Keeping an organized checklist not only ensured I didn’t miss any training topics but also offered a point of reference for associates as they were going through onboarding. Areas you should include in your checklist are:
- Customer service: Return policies, complaint policies, how to speak to customers, etc.
- Store operations: Opening and closing duties, new merchandise procedures, contact references, how everything is organized, etc.
- Sales: Making suggestions, upselling and cross-selling, bestselling products, product knowledge, etc.
- Computer/POS operations: Ringing up customers, conducting returns, printing tags, running reports, pulling daily numbers, etc.
- Loyalty program: Acquisition of new members, what the program includes, signing people up, etc.
- Perks: Parking, overtime rate, employee discounts, commission structure, events or odd hours, etc.
Typically, training will take between two to three weeks for retail jobs, and by that time, you should have reviewed all the topics in your training plan, and associates should feel ready to work solo. Obviously, you should still be available to your staff for questions at any point, but they should have baseline confidence by the end of their initial onboarding.
The most successful retail operations incorporate ongoing training well after employees are onboarded. Regular staff meetings to train on new products and initiatives, on-the-floor coaching and feedback around customer interactions and sales opportunities, and role-playing customer service scenarios are all part of growing a stellar and cohesive retail team.
Manage Your Inventory
In addition to building a team, managing a retail store also includes responsibility for inventory. Inventory management includes all the processes that keep the right amount of product on your shelves at all times. This means spotting stockouts before they happen, placing reorders in a timely manner, creating open-to-buy plans, and budgeting accordingly.
I would suggest adopting an integrated POS system to track your inventory levels in real time and stay on top of low inventory levels. Otherwise, you can track your inventory levels manually using a spreadsheet. Below, we offer a free inventory management workbook you can use to track stock levels.
Download Free Inventory Management Workbook
Conduct Regular Inventory Counts
A major part of inventory management is conducting regular inventory counts. Inventory counts help you spot shrinkage problems and provide an accurate look at the inventory you actually have on hand at that time—not just what the computer says you have.
In general, there are two major kinds of inventory counts:
- Cycle Counts: This involves counting a small portion of your inventory each day, week, or month to make the counting process more manageable. This method also allows you to count products with a high sell-through rate or value more frequently.
- Annual Counts: This is when you do a yearly count of all of your inventory, typically for tax purposes.
The first step in an inventory count is figuring out how much of a product you should have. This will be based on how many items you originally ordered minus what you have sold. If you use a POS system, inventory levels are tracked live with each sale, so your expected quantity is calculated for you. Otherwise, you will have to do the math yourself.
From there, all you do is count the number of products you actually have in stock and determine if there are any discrepancies between your projected and actual quantities.
If you need more guidance on establishing a full process, read our guide to retail inventory management.
Source Your Shrinkage
Inventory shrinkage refers to any discrepancies in the number of products you thought you had and the number you actually have, based on your inventory counts. Any time you detect shrinkage, you should determine where it is coming from so you can take steps to prevent it in the future.
Typically, you will investigate three potential shrinkage sources:
- Employee theft: To uncover this, you would look at your transaction history for any faulty sales or your security footage for any evidence of employee shoplifting. Employee theft typically results in immediate job termination, setting a precedent for your staff.
- Customer theft: To uncover this, you should look for any signs of theft in your fitting rooms or around your store (removed security or price tags, empty hangers, out-of-place merchandise), as well as security footage. If you find the person who stole from you, be sure to provide a visual of them for your staff so they know who to keep an eye on. Typically, it is not worth it to press charges for shoplifting offenses.
- Clerical error: This is when there is something wrong in your inventory records, so you don’t have an accurate image of what your inventory levels should be. To uncover this, you should look at all your receiving counts and transaction history to determine where there was a miscount and what that miscount is.
Once you identify where your shrinkage is coming from, you should either take steps to create a more accurate inventory management system or take security measures to reduce retail theft.
Organize Your Stock Room
Another important part of inventory management is organizing your stock rooms so products are easy to find and nothing gets lost in confusion. This will also make it easier for your employees to find things and let you store more merchandise in less space.
Keeping an organized and flexible stockroom is vital to preventing shrinkage. (Source: EZR Storage)
The first thing you will want to do is purchase fixtures for storing merchandise. Once you choose your fixtures, it is time to choose an organizational system. This can look many different ways, and no two stores will have the same system—it really depends on your store operations and what system makes sense to you. My biggest pieces of advice for organizing your stockroom are to:
- Label everything.
- Create a system flexible enough to work as your inventory changes.
- Create a system that is intuitive so that you can teach it to your staff.
For example, at my boutique, we used floor bins with removable labels for any foldable pieces and pants. We had a hanging system for the rest of our stock, based on color, sleeve length, and type of garment. Removable labels and the broad organizational categories made this system easy to update and adaptable to all kinds of merchandise. Additionally, the system was pretty simple and well-marked, so my associates could maintain it perfectly!
For more on how you can make your inventory management more efficient, check out our article on inventory management software.
Maintain a Strong Product Sourcing Network
When it comes to good inventory management, another component you should consider is your network of product suppliers. Having a directory of dependable suppliers will ensure that you can get the products you need when you need them. This means finding online marketplaces and attending trade shows.
For sourcing online, I would suggest using Faire or Tundra. Both offer a wide host of products and easily navigated websites for retailers.
Tundra lets you shop from thousands of wholesale suppliers. (Source: Tundra)
While online sourcing is a convenient and easy way to source products, you should also attend tradeshows. This is where a group of wholesalers, typically related in their product variety, gather so retailers can shop their merchandise and do seasonal shopping. This is a great opportunity to see products in person and form relationships with your suppliers.
If 2021 has taught us anything, it is that the supply chain is unreliable. The best way to ensure you always have suppliers to stock your shelves is to connect with as many as possible. This variety will ensure that you have backup plans and aren’t reliant on any one source.
You can use this trade show website to find relevant tradeshows near you.
Create Data-Driven Sales Goals
The best way to keep your store on track and ensure that you are managing it well is to set sales goals. I would recommend making your goals granular, providing daily, weekly, monthly, and annual goals that you and your staff can aim to achieve every day. Keep these goals visible to all and make sure you emphasize them daily. This can be a great way to motivate your staff and keep everyone on the same page.
If you are just starting and have no sales data to base your goals on, I recommend using your annual retail budget as a guide. Your budget should include all of your outgoing expenses, giving you a picture of just how much you need to sell to yield a profit.
Otherwise, you will want to use past sales reports to set your sales goals. You can set your goals however you like, but you generally want to see growth year over year, so setting your sales goals 5%-10% higher than your previous year’s sales number will help you see if you are hitting that growth.
If your storefront operated during the COVID-19 pandemic, you may want to use 2019 sales numbers to set your goals and measure performance instead of 2020 numbers. This will give you a better idea of actual growth.
Another important factor to consider when setting daily goals is the day of the week. In a recent study, Zenreach found the biggest shopping days for retailers across the country are Fridays and Saturdays, and the smallest are Sundays and Tuesdays. As you are setting goals and looking at past sales data, be sure to keep this in mind and adjust your goals depending on the day of the week.
Write Weekly Sales Reports to Stay on Track
Another part of managing a retail store is keeping weekly sales reports. It is a great practice to take a detailed look at every week and address problems as they arise. Weekly sales reports are also useful if, as a store owner, you decide to take a step back and hire a manager.
As your business grows, you may find that you have enough revenue to hire a manager and need more time to focus on your role as the owner. Weekly sales reports from your acting manager will allow you to maintain oversight over your storefront and keep your store on track.
The types of things you should include in your reports are:
- Sales targets: Take a look at where you stand in terms of your daily, weekly, monthly, and annual sales goals.
- Inventory feedback: Note any low-stock items or pieces that have been remarkably popular or unpopular.
- Staffing feedback: Note any scheduling problems you might have had, if a staff member was exceptional, or any problem areas.
- Supply needs: Note any store supplies that you went through that week or anything that might be running low (cleaning supplies, employee snacks, hangers, tags, etc.).
- Event reports: Analyze the success of past events and look forward to how you will prepare for others in the future.
- HR notes: Leave a place where employees can leave anonymous feedback for store management and/or ownership.
Establish Procedures for a Clean & Organized Store
While maybe not the most glamorous part of your job, one of the biggest aspects of how to manage a retail store is keeping it tidy and organized. This means properly maintaining any merchandise and store design elements, putting products away as they get used, and implementing a cleaning routine so that everything stays sanitary.
Did you know?
A 2019 report from the Service Channel found that 64% of surveyed shoppers had walked out of a store due to poor physical appearance and disorganization.
Keeping your storefront clean and tidy will make it more inviting to customers and easier for shopping.
(Source: Pinterest)
Lead Your Team
Part of managing your retail store is setting the work environment and ethic for your space. How you interact with your customers, the care you take for your store, and how you present yourself each day will massively impact your staff and their performance.
Additionally, leadership in retail store management includes making your staff excited to be a part of the team and ensuring they feel heard and respected. A good leader inspires by setting a strong example and creating a positive environment. This will make things more pleasant for everyone and motivate your associates to perform better for your brand.
Motivate Your Staff With Rewards
You can create a positive work environment and motivate your staff by creating a rewards or commission structure. From my experience, using a blended approach that rewards both team and individual performance works best. For example, individuals could earn a sales commission, while there is also a team bonus for meeting a monthly sales goal.
Less formal rewards like gift cards, small treats for your highest performing associate of the week, or a dinner or get together after a big sale day can also be effective.
Whatever you can do to motivate your employees and demonstrate your appreciation for their efforts will pay off and make working for your store all the more fun.
Proactively Listen to Your Staff
Advocate for your staff and be open to any discussions, questions, and even complaints. As the owner of a small business, you will also likely play the role of an HR person for your staff. Be sure that you create an inviting environment where employees feel like they can talk to you and expect their feedback to be addressed.
Creating this space where employees feel safe is a huge part of retaining your staff. Treat your staff with compassion, respect their needs, and offer an open discourse about store policies and job satisfaction.
Did you know?
Replacing each hourly worker costs an average of $1,500, and employees who aren’t comfortable giving feedback to management have a 16% lower retention rate than employees who are.
Lead by Example
Show your employees what you want from them through your actions. As part of managing your store, you set the overall tone for everything that happens. How you lead makes a significant impact on how your staff performs and understands their job expectations. You should be the best salesperson, the most helpful customer service agent, the most meticulous cleaner and organizer, and the most motivated person on the floor.
Initiate Marketing & Outreach Campaigns
An essential part of growing your business and revenue is to retain your existing customers and expand your customer base. Both of these objectives depend on good marketing and customer outreach. Retail marketing can help you to foster customer loyalty, reach new audiences, and drive your bottom line.
Here are a few ways to incorporate retail marketing strategies into your day-to-day store management tasks:
Get out and get to know your neighbors. If you can build relationships with your neighboring businesses, there is a great opportunity to share your customer bases and mutually benefit. Do partnered events, host pop-ups in each other’s spaces, share marketing materials, and work together to refer and help each other grow.
At my store, each month, I would schedule someone (or myself) to go to all the neighboring businesses around our store and deliver $10 coupons. My storefront was in a busy outdoor shopping center, so these coupons helped drive foot traffic to our store and build relationships with our neighbors.
Another thing that you can do is introduce a loyalty program. You can customize your loyalty program with different features and structures, but these programs generally have the same basic system. For access to exclusive discounts and information, customers offer their contact information, typically both phone and email. This allows you to reach out to your loyal customers with these exclusive offers, fostering their loyalty and incentivizing them to spend with you.
Did you know?
If loyal to a brand, 59% of consumers are willing to recommend the brand to others, and 36% are willing to pay more for a product, even if they find it cheaper elsewhere.
The best way to get people to sign up for a loyalty program is to engage with them at checkout. Customers here are already engaged and ready to purchase from your store, so they are the best candidates to be loyalty members. Train your staff to tell every customer checking out about your loyalty program and what it offers. To ensure they include all relevant information, create a loyalty program spiel checklist. It should include items like your sign-up offer, ongoing exclusive deals for VIP members, what members can expect from your communications, and how easy it is to sign up.
You should create a system for organizing your members’ information and measuring the success of your loyalty program. The best way to do this is through loyalty program software, which will help streamline customer information, send out automated messages, and use data-driven loyalty-building marketing. You can also opt for manual tracking, using excel or other forms of record-keeping.
Even if you do not have a loyalty program to help you collect customer information, you should still work to gather emails and phone numbers to utilize SMS and email marketing strategies.
Create acquisition procedures similar to those used for loyalty members:
- Train your staff to ask for contact information in a way that lets customers know what benefits they will reap for sharing.
- Keep a sign-up sheet by your register where people can leave their information.
- Create an email portal on your website where people can register their emails.
From there, you will want to either adopt a messaging service such as Twilio or send out messages manually. When starting, sending weekly emails to your subscribers is a safe cadence. You can experiment with more frequent and less frequent sends to see what will work best for your business. Even better, you can segment your lists to email your VIP customers and those most engaged with your content more frequently, while maintaining a more moderate cadence for your occasional shoppers.
In terms of what your messages should include, the goal here is to keep people up to date and maintain your brand’s top-of-mind recognition. Let shoppers know about events, sales, new arrivals, discounts, partnerships, or other exciting things going on at your store. Anything that you think might spark interest and drive traffic is worth sharing—just don’t overshare!
Get customers shopping with you with email and SMS marketing.
(Source: Tatango)
Times are changing, and, more and more, social media is how people discover new brands and shop for products. In fact, Facebook found that “83% of people use Instagram to discover new products and services and 87% said they took specific action, like making a purchase, after seeing product information.”
This brand uses social media to showcase its products and advertise its sales.
(Source: Rustic Thread via Instagram)
You should use social media strategically to expand your customer base, promote new products, and keep your followers up to date on your store. The best way to do this is to create a marketing plan at the beginning of each year. This way, you can pinpoint your most important events and products, allocate a marketing budget accordingly, and have ample time to prepare ads or posts for your big events.
In addition to running ads on Facebook and Instagram and creating posts for specific events, you should also maintain an online presence all the time. That means creating social media pages for your brand on every platform (Twitter, Facebook, TikTok, Instagram, Pinterest), making shoppable social media storefronts, posting daily, utilizing hashtags and stories, and creating influencer partnerships. Maintaining your platforms and keeping them active every day will help you take advantage of social media algorithms and boost engagement with your brand overall.
Consider Expansion
As part of managing your store, your eyes should always be on the horizon for new opportunities. As your business grows under your leadership, you should look to expand. At first, this might look like holding more inventory and investing in marketing to grow your customer base. There is even the possibility that, as time goes on, you outgrow your original storefront and are ready to open a new location.
Bottom Line
Ongoing management of a retail store is a massive undertaking with tons of ground to cover. It includes, as we’ve discussed, everything from daily operations to staffing to product sourcing, and even expansion. Effective management keeps your store marching forward and aligned with business goals. With our guide, you are ready to run your store seamlessly.
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