Strategic financial planning allows retailers to emerge strongly in an e-commerce economy.
The rapid transformation to digital has propelled brick and mortar retail stores to think strategically to stand out strongly in today’s marketplace that is slightly being covered by e-commerce. Shifting to digital provides them opportunities to lure and acquire new customers, engage better with existing customers, lessen operations costs and improve employee motivation. As in-person shopping has limited in the wake of COVID-19, it has accelerated the need to leverage digital technologies along with considerations to effective financial strategies. Already, e-commerce business was on the rise in the pre-pandemic world and in this pandemic, it has seen a tremendous uptake as people are confined at their homes shopping online.
So, how can retail stores make financial strategies to survive the onslaught of e-commerce?
Cash Flow Management
Cash flow management refers to the process of monitoring, evaluating and adapting to the cash flow that comes through selling merchandise. The most significant part of cash flow management for retail business is to dodge extensive cash shortages owing to the amplified gap between cash inflows and outflows. If done incorrectly, there will be more chances retailers will be out of the game. Thus, planning and implementing effective cash flow management enable a retailer to vie in the modern-day competitive market and improve all aspects of retail operations.
Strategic collaborations can create new opportunities for both parties. This can be the right tool for a retail business to grow further and drive innovation. Seeking out strategic alliances will enable value innovation for retailers. For instance, Walmart, the largest physical retailer, partnered with Microsoft to share their different capabilities, intending to create the best possible customer experience. The retail giant also collaborated with Flipkart that will give Walmart a greater possibility of entering the emerging Indian e-commerce market.
Budget and Budgetary Control
Budgeting is the process of controlling various activities of the retailing business. It outlines a retailer’s planned expenditures for a certain period of time. On the other side, budgetary control has now become an essential tool of the management for controlling various costs and surging profit base. This is imperative as modern retailing is full of competition, uncertainty and exposure to different risks is inevitable. Budgets in the retail business are prepared on the basis of expenditure and activity.
Engaging Customers with Messaging
Treating customers in a more polite and with care and respect can be a growth factor in today’s e-commerce world. This is more vital in uncertainty like COVID-19 to deliver messages to customers and establish long-lasting relationships with them. Meeting people’s needs can also create value and satisfaction towards a brand, building community and trust with a company’s messaging. Moreover, promoting best-selling relevant products such as food delivery services, home services, home office products and accessories and children’s educational products will also define success.
Robust Online Presence
In today’s internet age, businesses’ more emphasis is being placed on ensuring the customers’ needs and expectations. To do so, they are making a strong online presence to grasp each opportunity to address customers’ requirements. This is why e-commerce companies are gaining more traction as they fulfill consumers’ each and every need. Hence, to stay relevant, it has now become imperative for retailers to harness the power of the internet and give access to customers to enjoy their services online.