The US retail industry is fairly consolidated and heterogeneous. Although it is one of the biggest retail markets in the world, it is also the most competitive. The top ten retail companies in the US retail market is known to hold one-third of the total market share. Furthermore, the enormous transformation in the sector has brought about new challenges in retail industry. Amidst the constantly evolving market factors, retailers are finding themselves in an uphill battle to profitably increase growth and market share. While retailers may expect increased spending by consumers in the near future, preparing for uncertainty by anticipating and responding to potential retail industry challenges has to be a large part of their overall strategy.
Challenges in retail market in the US
Attaining operational efficiency
Managing complexities and coping with the changes are some major challenges in retail right now. Yet, in order to bring efficiency to their tasks and processes, companies in the US retail industry must identify ways to deal with complexities and cope with the dynamic market conditions. Today, businesses that are running their operations based on spreadsheets find that it does not allow them to be scalable and grow with the business. Therefore, efficiency in managing their operations is vital for retailers to thrive and overcome the key challenges in retail.
Most retail companies in the US continue to use outdated technologies. Although many of them understand that using outdated technologies will only add on to the already existing challenges in retail market for them, they often fail to find the required investments needed for an upgrade. Evolving technologies, including automation and business intelligence, have immense potential to transform the day-to-day operations of a retail store. Automation can ensure substantial operational cost reductions when applied to routine and repetitive tasks. It can also provide greater visibility and decision-making support to the retail business owners and operators.
Direct to consumer channels
While retailers are planning their stores for the future, manufacturers are increasing the challenges in retail through direct-to-consumer channels. This helps manufacturers to not lose any extra margin to the retailers. Furthermore, these channels enable them to collect data about customers, which allows them to engage with customers in a personalized manner, driving brand attraction and customer loyalty.
Control over accounts payable process
Retailers engage with several different suppliers. Manually managing the constant flood of invoices makes having control over the accounts payable process difficult for retailers. Such challenges in retail companies lead to a direct impact on the financial forecasting of the business and ultimately affect their bottom line. Partnering with industry players helps retailers to empower fewer resources to manage the accounts payable process while simultaneously increasing process accuracy, accelerating invoice processing, and optimizing payment timing to allow them to take advantage of vendor offered discounts.