Retail Management Challenges

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Retail management challenges include attracting qualified employees and handling the competition.
Retail management challenges include attracting qualified employees and handling the competition. (Image: top manager with cellphone image by Alexey Klementiev from <a href='http://www.fotolia.com'>Fotolia.com</a>)

Managers in retail stores are responsible for building sales and profits. These professionals must constantly strive to offer quality products that customers need at reasonable prices. Additionally, retail managers must constantly be improving customer service satisfaction in their units. While specific sales and customer service goals are common with all retailers, certain retail management challenges can hinder a store's chance of achieving these objectives.

Significance

The retail industry has traditionally been one of high turnover. Many young people take jobs as cashiers or clerks in retail while in school, then quit when they find another career. Retail jobs also pay less than other industries. This combination of low pay and high turnover can make it difficult for managers to constantly maintain high-quality customer service.

Identification

The competition in retail is extremely fierce. Because larger retailers have more capital, these companies can increase their number of units more readily, making it difficult for most smaller retail managers to compete. People tend to purchase groceries or small items near their home. Larger retailers with multiple locations can benefit more from local customers than smaller retailers, which may be more spread out. The small retail manager may really need to differentiate his products and service level to compete.

Function

Because much retail work is monotonous or task-related, it is often hard to motivate retail workers to achieve a desired customer service level. This is particularly true with young workers who have no work ethic, meaning they perform their job just well enough to keep it and earn a paycheck. Not all young workers are lacking in motivation, but they often tend to focus on the latest gossip more than servicing the customers properly.

Considerations

During slow economic times, consumers tend to be more price sensitive. Consequently, they often choose to shop at places with the lowest price. This can be particularly challenging for smaller retailer managers, which do not have the latitude to lower prices like larger retailers. Larger retailers enjoy economies of scale, meaning they enjoy lower unit costs on products because they purchase larger volumes. Consequently, they earn a larger profit margin than smaller retailers.

Prevention/Solution

With ever-increasing populations, crime prevention is also a challenge for retailers. Most retailers educate their employees on how to watch out for potential shoplifters. Managers must also learn how to detect theft among employees. Employees can avoid ringing up a sale, then pocket the extra cash from a transaction. They can also pilfer cash in small, undetected amounts each day. Retail management challenges will always include the possibility of theft.

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