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9 de Marzo de 2023
Top Biggest Challenges of Retail in 2023
Top Biggest Challenges of Retail in 2023


Datawiz expert

What's in store for retailers in 2023?

In the era of global crises the flexibility level of certain business processes determines the success of the entire enterprise. Since the Covid-19 pandemic the product (and beyond) retail sector has undergone global change with the backdrop of the long-standing digitalisation of processes.

In 2023 the retail industry faces new challenges. What are retailers focusing on and what solutions are they looking for? 

Operating costs & management

Operating expenses or OpEx are inherent costs in the day-to-day running of business. The formula for operating expenses is the sum of all costs incurred by a company in the course of its operating activities. 

Examples of such costs:

  • labour costs;
  • advertising budget;
  • utilities;
  • cleaning the workspace;
  • office costs, etc. 

The main objective of the operational and top management of the retail chain is to reduce operational costs without compromising the competitiveness and operations of the company. 


Do not sacrifice quality. If an optimisation item can affect the efficiency of employees or processes - it will damage the company's reputation.


Operational management responsible for the quality of business operations must rely on performance indicators and take measures to optimise or modify processes.


operational costs


How can operating costs be reduced? 

  1. Track operating cost indicators. It is worth analysing individual indicators (e.g. gross profit or loss) by different analyses (by store/category/commodity). Analytical share in this is important because a large number of metrics will help identify disproportionate cost points and find ways to reduce them. 
  2. Involve the heads of departments in the cost optimisation process. Field staff can corroborate and provide additional arguments based on analytics data and elaborate on problems. For example, a category manager can advise to change the supplier who has more favourable prices for goods, a marketer is to change inefficient advertising channels, etc.
  3. Review the job descriptions of individual staff members. A different distribution of staff responsibilities helps both in cost stabilisation and in career growth and development. 

With a smart approach to optimising operating costs the retail chain's profits will increase. 


Inflation and customisation 

Unfortunately, price inflation has a negative impact on purchasing power. Customers' grocery baskets increasingly consist of basic necessities. Due to incorrect purchase planning these goods sometimes fall into the out-of-stock category, as customers are increasingly choosing certain items from more democratic brands. There is an imbalance in demand for products, secondary goods are not popular. All this leads to loss of profit and, as a consequence, to the need for timely adjustments to the assortment. To avoid excessive price increases action must be taken on the basis of analytical data. 


out-of-stock shelf


What can be done to reduce the impact of inflation?

The main method of identifying "weaknesses" in sales is customer analytics. Segmentation of customers into variety of categories will show possible strategies for increasing the average check with RFM analysis, expanding the category of loyal customers with personalised offers, etc.

Data from such analytics can identify opportunities to develop a strategy for more personalised interaction with customers. Points of such a strategy can include: 

  • studying the customer base and their purchases;
  • an increase in the average receipt;
  • personalisation of offers, etc.

Staff turnover and digital

The grocery retail sector has a record for employee turnover. The employee turnover process has a direct impact on the financial performance of the shop chain, as many processes can be 'adapted' to a particular specialist.

 "Attrition" can provide insight into certain problems that exist in a company. It can be calculated using the formula:


Employee turnover rate = Number of redundancies in a given period / Average number of employees in the same period × 100% 


The most common reasons for staff layoffs in retail can be considered as:

  • an unsatisfactory amount of financial remuneration; 
  • working conditions;
  • lack of career progression;
  • the perception of the position as "temporary".

How to reduce the rate of staff turnover?

The main task of top management in product retail is to train employees in changing work standards (e.g. carrying out goods lay-outs using PlanoHero planogramming service), improving conditions, and motivating them (both financially and non-financially).

PlanoHero planogramming


Standard methods of encouraging staff to cooperate for longer periods of time can be considered:

  • an advantageous social package;
  • salary revision on the basis of seniority;
  • discounts on retail products. 

But it is also worth taking into account progressive ways that often promote development, such as:

  • a mentoring system;
  • introduction of additional analytical tools and services. 

As we outlined above process automation in retail contributes to faster and more efficient employee tasks and efficient time management for high-level tasks.
Moreover, the introduction of certain technologies can simplify the HR search and recruitment process which also affects employee loyalty towards the hiring company.

By delegating a number of tasks to AI tools the questions of accuracy and time reduction are easily resolved. 


So, we discern that the challenge for retailers is to keep their business alive by using progressive automated methods and tools, improving interaction between management and employees, and constantly working to improve the customer experience. 



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