To Maximize Black Friday Profit, Retailers Must Automate Their Back Office
Retailers’ Black Friday sales metrics are typically a reliable measurement for long-term earnings success. So, retailers, particularly struggling retailers analysts say, should consider this metric.
This year, despite a booming economy, major retailers are heading into the holiday season behind.
Just days away from Black Friday 2019, the SPDR S&P Retail ETF fell by almost 2%. Khol’s reported that their earnings plummeted 20% last week.
The drop certainly impacted SPDR S&P Retail ETF. Other retailers, including Home Depot, experienced massive sales declines.
Among additional threats to retailers this Black Friday is this year’s shorter holiday shopping period. With Thanksgiving so late, there’s less than a month between Black Friday and Christmas. Plus, more shoppers took advantage of sales earlier this year.
The ongoing tariff war may also raise retail’s concern. While negotiations continue to tilt favorably, retailers should remain cognizant.
And around the U.S., more and more malls must deal with debt. Their shrinking profit margin caused, in part, by shifting consumer preferences, also poses a threat this Black Friday.
With the holiday season looming, many retailers focus on marketing and “front-end” sales to maximize revenue. But, to truly maximize profit, retailers must also streamline the “back of the house”.
A committed focus on back office automation empowers retailers to capitalize on consumer experience, added efficiency, and decreased costs.
One immediate opportunity for efficiency gains and reduced cost is automated cash management.
According to the Federal Reserve, 26% of payments are still made in cash. However, retailers often have antiquated, expensive methods for processing cash and transferring it to their bank.
By applying automation to cash management, retailers improve customer-facing opportunities. This is particularly important on Black Friday, traditionally the biggest shopping day of the year.
In addition to allowing for a critical focus on the customer instead of time spent in the back office, automation also reduces cost and increases cash flow. This improves profitability.
Given Black Friday’s busyness, automating back office processes give retailers a competitive advantage. For example, back office automation creates more effective cash management.
With so much focus on front-end service during Black Friday and the approaching holiday season, retailers must not ignore “back-of-house” opportunities. By implementing improvements to back office operations, the retailer will ultimately enhance front-facing customer service.
With back office automation, retail staff has more opportunity to recommend products, help customers navigate a store, and complete a purchase transaction in record time.
For retailers, the automation of cash management and streamlining other behind-the-scenes operations, facilitates better Black Friday sales. This positions retailers for a successful year ahead.
