Despite the rise of online and digital shopping, the physical store still represents around 90 percent of all retail sales in the US. While retailers clearly need to adapt and change with the new realities of consumer behavior, most still recognize that physical stores are a critical part of their strategy.
Done right, these physical locations can actually enable the growth of ecommerce and become a hub for the retailer’s omnichannel shopping experience. As a result, opening new stores with the latest retail IT is a strategic initiative that needs to be done effectively.
Although opening new stores involves the entire organization, IT is increasingly looked upon for leadership and support in getting the store open on time and on budget. With the introduction of mobile POS systems, digital displays, kiosks, wireless connectivity, and other retail technologies, each individual location starts to look like a mini IT department in its own right.
With so much complexity spread across hundreds of stores, keeping everything on schedule can be difficult. But it’s absolutely essential that stores open on time without any exceptions. Here are four consequences retailers face if they delay their store opening.
Loss of Revenue and Fixed Costs
The average supermarket in the US brings in about $47,000 per day. But if a store doesn’t open on time, it’s not making any money, and this potential revenue is immediately lost. More than that, these stores still incur fixed overhead costs, such as rent, utilities, and inventory, and there are significant costs directly related to missing deadlines as well.
Spread these losses across multiple store locations and it doesn’t take long to completely wipe out any expected return on investment from the project and installation of new technology.
There’s an old saying that you never have a second chance to make a good first impression. While it may sound cliché, it rings especially true in retail. When opening a new store, you make a promise to customers that they’ll have a great experience.
If you fail to meet this promise due to a delay or technology failure, you could end up turning customers away. Not does this represent the short term loss of a sale, but with so many channels to choose from, it’s likely that some customers simply won’t come back again at all.
Wasted Marketing Campaigns
The point of no return for a store open date is when it’s been announced to the public. Typically, there’s a local marketing push to promote the new location and to encourage customers to visit for the grand opening.
If the date slips, all of this marketing effort goes to waste. There then needs to be a renewed campaign for the new date, and an ongoing effort to bring back any lost customers who were put off by the delay. Again, spread out over multiple store locations, this quickly becomes an expensive problem for retailers.
Damaged Brand and Reputation
When customers have so many options and channels to choose from, a retailer’s brand is a critical part of their loyalty and retention strategy. But the negative publicity that comes with a missed store opening can severely damage this carefully crafted brand, especially if the problem is widespread.
More than just customers, investors and shareholders both look to a retailer’s performance when opening stores as a sign of overall company performance. Issues during this phase are often considered to be symptoms of a larger issue within the company, and botched store openings have been shown to decrease investor confidence and negatively impact share prices.
Don’t Fall Behind
On a store by store basis, it may not seem too difficult to hit deadlines and make sure everything is up and running on schedule. But scale the project up to hundreds of stores over a short period of time and it suddenly becomes more complicated.
Fortunately, retailers can turn to a retail IT services and support provider with the project management experience, expertise and scale required to keep everything on track. Instead of risking lost revenue, damaged customer relationships, wasted marketing and a diminished reputation, retailers can work with a trusted partner to get stores open on time, every time.
Stop the delays that plague store openings. Download Retail & IT Store Growth to learn the critical IT requirements of retail openings and refreshing existing stores, and how the process can be coordinated and managed successfully and consistently