By: JD St-Martin
The retail industry faces a specific set of financial and operational challenges that are testing their longevity in an increasingly competitive marketplace. Staying power has always been an issue for small and medium-sized businesses (SMBs): Of the staggering 101,324 Canadian businesses created between 2015 and 2019, 90,151 disappeared. The success of global corporations, a booming online marketplace and rapidly changing technologies put into perspective the importance of staying competitive and adapting to evolving consumer expectations.
With costs and debt rising, many businesses believe they will be impacted. Employees are becoming more difficult to retain. And over one-third of SMBs believe their profitability will decrease this year.
Some of the biggest pressures Canadian business owners have faced this year include rising inflation, cost of inputs, growing interest rates and debts. SMBs can’t change factors that are out of their control, like inflation and insurance costs, but they can take steps to face these challenges head-on to future-proof their operations and optimize growth potential.
Use data to make high-level decisions
Entrepreneurs need to be more commercially minded than ever. That’s where data comes in: the right insights can help you make high-level financial and operational decisions to improve efficiency and reduce costs.
Some of the biggest expenses for business owners are labour and inventory. Over a third of Canadian SMBs cite labour as a large contributor to rising costs, as well as the impact of stock availability.
Lightspeed’s Advanced Reporting provides insights that help retailers optimize all aspects of the business, but particularly inventory and staffing. Through hourly sales data and individual performance reports, you can view whether you’re scheduling staff at the right times and learn how to improve performance and retention.
Using data, business owners can reduce labour costs during quieter periods and boost productivity by tracking metrics such as average items per sale. We know that employees with goals are 3.6 times more likely to be committed to their organization. That’s proof that labour insights can hugely impact not only staff retention, but revenue.
You should be able to make the most out of your inventory by reducing shrinkage and wastage to ensure what you’re buying is selling. With Insights, you can view which products are selling well and which aren’t, and what you need to restock. That can inform decisions related to promotions or discounts to move stock out.
In fact, when a product is out of stock, 26% will switch their purchase to a different store. Optimizing stock availability is key to both increasing revenue and retaining customers.
Centralize your operations in one place
Many retailers operate using legacy systems and scattered solutions that ultimately hold them back. Tech issues from legacy and non-integrated systems can cost up to $4000 per employee in lost time per year.
The fastest growing businesses are modernizing their operating systems and proactively managing costs. Using multiple providers for your business functions, from POS to accounting to payments, increases costs and drains resources due to all the time you have to spend managing different areas of the business in various platforms.
Consider using a platform that consolidates all your needs. This solution should include features like point of sale, payment processing, inventory management and reporting, all within a single subscription. You’ll see cost savings, not to mention improve efficiency, meaning it’s well worth the time to move away from your legacy system.
An all-in-one solution will also reduce the time your employees spend troubleshooting technical issues. With one partner and one line of support, you’ll get comprehensive assistance for every aspect of your business.
Automate repetitive tasks
Companies lose up to 30% of revenue every year due to inefficiency. In other words, efficiency is key. Instead of allocating so much of your time to core business tasks, you should be able to focus on making higher-level decisions.
Labour can represent up to 70% of business spending, so helping your team become more productive is a fantastic way to reduce costs. The platform you use to run your business should allow you to schedule automatic tasks like invoice payments and reordering when inventory levels decline.
Many businesses still use spreadsheets to manage inventory, which adds hours of additional work, not to mention increases potential for error. Lightspeed’s platform, for instance, automates key inventory management tasks such as adding products to sell in-store or online with just a click.
Other scheduled tasks, like payroll and invoice reminders, can also easily be automated in a consolidated platform. Removing yourself from these daily tasks will increase efficiency, employee productivity, and ultimately help curb costs associated with outdated, complex processes.
Final thoughts
The financial challenges that retailers currently face can seem overwhelming. However, with just a few impactful changes, business owners can foster resilience in an increasingly competitive environment.
Using data to power high-level business decisions, centralizing your business operations, and automating time-consuming tasks can improve efficiency across your business and reduce costs.
My vision is to empower businesses to grow using a platform that services all operational and financial needs. With such a platform, business owners can truly prepare for the future of retail.
JD St-Martin, President, Lightspeed
JD St-Martin joined Lightspeed in May 2019 through the acquisition of Chronogolf, a SaaS company he co-founded in 2013. In October 2019 he was promoted to Senior Director of Global Account Management and in July 2020 he became our Senior Vice President of Global Sales. In 2022, JD became President of Lightspeed.
Prior to founding and growing his own company, Mr. St-Martin accumulated five years of experience in Venture Capital and Private Equity at Teralys Capital in Montreal and GE Equity in London, UK. Mr. St-Martin holds a Master of Science in Accounting and Finance from the London School of Economics and a Bachelor of Commerce in International Business from the University of Ottawa.
