Emphasized Text

Retail is changing. Here's what merchants need to know...

Text Wrap

Retail has always been trend-driven and fast-paced, but the past few years have been tumultuous, to say the least. Now, after a global pandemic, surging e-commerce rates, followed by a swing back to in-store shopping, retailers are facing historically <a href="https://www.afterpay.com/en-AU/business/access/boosting-profitability/preparing-for-inflation" rel="noopener noreferrer" target="_blank">high inflation rates</a>.As we enter a new year, many retailers may well be wondering: what’s next? The answer, say experts, is plenty.Here are the 2023 retail trends that merchants and retailers need to know…<h2>Delivery demands will rise</h2>As online shopping becomes more entrenched, expectations around delivery are also maturing. In 2023, consumers will only expect faster, more convenient shipping and delivery .“Next-day delivery is fast becoming the minimum standard with same-day delivery gaining huge popularity,” Paul Zahra, CEO of Australian Retailers Association says, adding, “The move to a seamless, contactless and speedy customer experience is now what’s expected.”

Article Quote

“Next-day delivery is fast becoming the minimum standard."

For retailers, this means offering more shipping options in 2023, from standard shipping to express and same-day delivery options, as well as <a href="https://www.afterpay.com/en-AU/business/access/shipping-strategies/click-and-collect-guide" rel="noopener noreferrer" target="_blank">click-and-collect</a> if possible. (<a href="https://auspost.com.au/content/dam/auspost_corp/media/documents/ecommerce-industry-report-2022.pdf" rel="noopener noreferrer" target="_blank">Australia Post’s e-commerce Industry Report for 2022</a> found that demand for click-and-collect had grown by 13.6 per cent across the year.)To avoid being stung by higher delivery fees, retailers should consider staggered pricing options and implementing strategies to reduce returns, says Shippit CMO Brett Chester.<h2>Bricks and mortar return, with an emphasis on experience </h2>While physical stores took a major hit during the height of COVID-19, the scales are beginning to equalise as consumers return in store to shop. The net effect – a hybrid of online and in-store purchasing – has been dubbed ‘bricks and clicks’ by Australia Post’s CEO Paul Graham.But while in-store shopping may have returned, it’s evolving too. Ana Piteira, the founder of Reliquia Jewellery and Blanca, opened a store in Sydney’s Bondi Junction two years ago and says she view her brick-and-mortar presence as “an extension of our online presence,” she continues: “It’s not only about the sales that you’re generating; it’s about having a showroom for your product where people can go and see, touch and feel the range.”Her sentiments are echoed by AllBirds co-founder Tim Brown, who <a href="https://www.businessoffashion.com/articles/direct-to-consumer/the-state-of-fashion-2023-report-dtc-online-stores-multi-channel/" rel="noopener noreferrer" target="_blank">has described</a> the brand’s 54 stores as a “powerful word-of-mouth awareness” tool that drives loyalty&nbsp;and “a customer acquisition vehicle” for the best customers that we have within our ecosystem.”Experts predict that for brick-and-mortar stores, the emphasis will be on experiences rather than simply sales.For some retailers that means hosting events in-store (lululemon, for example, holds yoga classes in-store); for others it's about enhancing the day-to-day customer experience with interactive features such as touch-screen mirrors or product demonstrations).<h2><a href="https://www.afterpay.com/en-AU/business/access/customer-retention/customer-retention-strategies" rel="noopener noreferrer" target="_blank">Customer retention</a> strategies will shift </h2><a href="https://www.afterpay.com/en-AU/business/access/boosting-profitability/preparing-for-inflation" rel="noopener noreferrer" target="_blank">As inflation rises</a> – along with <a href="https://www.businesswire.com/news/home/20220719005425/en/Brands-Losing-a-Record-29-for-Each-New-Customer-Acquired" rel="noopener noreferrer" target="_blank">customer acquisition costs</a> – attracting and retaining consumers will become more important than ever in 2023.While the outlook may seem ominous, Zahra says there is still plenty that retailers can do to stay one step ahead.“Shoppers will be savvier – looking to make the most of sales and promotions throughout the year, and [they will look to] use BNPL (Buy Now Pay Later) options to spread out their financial commitments.”In addition to Afterpay, Zahra recommends going back to the basics of retail – tailored incentivisation and relationship building.“The use of <a href="https://www.afterpay.com/en-AU/business/access/marketing/customer-loyalty-program" rel="noopener noreferrer" target="_blank">loyalty programs</a>, for example, is a great way to reward and incentivise customers for their continued business. And having flexible returns options are another great way to incentivise shoppers,” Zahra says, explaining, “shoppers will feel a lot more comfortable buying goods if they know they can change their mind should something unexpected happen.”<h2>Self-service will bridge the labour gap </h2>Self-service isn’t a new concept in retail – but, traditionally, it’s been the preserve of discount retailers and supermarkets.That’s slowly changing thanks to the rise of online shopping, which has seen customers become accustomed to having complete control over their shopping journey. As a result, growing numbers of brick-and-mortar retailers are offering self-serve features that mimic the convenience, speed and autonomy of online shopping.For some retailers, like Uniqlo, that looks like self-checkout; for others, it’s about allowing customers to easily find and access products (rather than having to ask staff or requiring assistants to bring the product out from storage). Bunnings, for example, offers an omnichannel shopping feature where customers can navigate to the exact aisle and location of products, so shoppers can head straight there rather than ask for directions.Contactless click and collect is another form of self-service, by giving customers more control over checkout and when they pick up their products.Zahra says that self-service technology will also help alleviate ongoing labour shortages. (The number of retail vacancies was 41 per cent higher in 2022 compared to 2020.)“Self-service technology can often provide quicker and better service. Think about an ATM or internet banking versus queuing and waiting for a teller in a bank,” he says, adding, “It’s a great solution to fill gaps left by labour shortages, particularly post pandemic.”

"Self-service technology can often provide quicker and better service."

However, Zahra notes that it’s important to still offer customers the face-to-face experience, and points to the way that Bunnings offers a mix of self-service and staffed checkouts, and also has support staff positioned throughout its stores.&nbsp;“We know that some customers value interaction with retail staff, so we see self-service technology complimenting face-to-face service, not necessarily replacing it."

Button

All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.

What retailers need to know in the new year.

How retail will change in 2023, from faster delivery to a rise in self-service technology and experiential retail.

4 top retail trends for Australia 2023

4 top retail trends for 2023

retail trends 2023

A happy shopping experience starts with a strong returns policy. Here’s how to cut the costs of returns and keep customers happy.

When it comes to selling your products, especially during peak shopping periods, many brands find themselves grappling with returns.It’s estimated that between 13 and 30 per cent of stock sold during the 2023 holiday season was returned. That’s the equivalent of<a href="https://nrf.com/research/customer-returns-retail-industry-2021" rel="noopener noreferrer" target="_blank"> hundreds of billions</a> of dollars’ worth of stock.And return rates are rising, thanks to a pandemic-induced surge in online shopping. Why? Because in-store shoppers return around 10 per cent of products, while online shoppers send back up to 40 per cent.

Unordered Highlight List

Regardless of industry, returns represent a significant cost to many retailers. Not only are there delivery costs to factor in, but staff might also spend time checking products for faults, before repackaging them, re-warehousing them and reselling.Recently, global retailer <a href="https://www.asos.com/au/" rel="noopener noreferrer" target="_blank">ASOS</a> even pointed to soaring return rates as a contributing factor to its <a href="https://www.theguardian.com/business/2022/jun/16/asos-warns-on-profits-amid-significant-increase-in-customer-returns" rel="noopener noreferrer" target="_blank">downgraded profit estimate</a>. And there are other costs to consider too, with returns also impacting the environment.Here's how to reduce return rates and save money…<h2>Present products clearly</h2>The rise of e-commerce has given rise to a new trend: bracketing. This occurs when customers purchase a product in several sizes with the intention of trying everything on at home and choosing the best fit.In fact, a <a href="https://www.prnewswire.com/news-releases/narvar-study-finds-58-of-consumers-intentionally-buy-more-goods-than-they-intend-to-keep-301416568.html" rel="noopener noreferrer" target="_blank">Navar study</a> recently found that 58 per cent of shoppers intentionally buy more products than they intend to keep and that “fit and size” continue to be the primary reason for online returns, accounting for 42 per cent of returns.The solution? Providing as much detail as possible about every product – fit, size, dimensions, features, material and appearance – to give customers as much confidence as possible in committing to a single size. That also means providing multiple, clear photos of the product or garment from a number of angles. A clear and detailed size chart is another must for fashion and footwear retailers, making the consumer experience as streamlined as possible.Global clothing retailer <a href="https://www.everlane.com/" rel="noopener noreferrer" target="_blank">Everlane</a> takes this one step further by also photographing the same garment on models of varying sizes and body shapes so that consumers can better understand how they will look in the piece.&nbsp;&nbsp;Some brands such as <a href="https://www.ganni.com/en-au/home" rel="noopener noreferrer" target="_blank">Ganni</a> offer free alterations to buyers in a bid to reduce returns. The Danish fashion brand has partnered with clothing repair app Sojo for the service. “Online shopping has a huge environmental cost attached to it due to the amount of returns that are made – with the majority of returns being due to poor fit,” <a href="https://fashionunited.uk/news/fashion/ganni-partners-with-clothing-alteration-app-sojo/2021111859425" rel="noopener noreferrer" target="_blank">explains</a> Sojo CEO and founder Josephine Philips. “By partnering with Sojo to offer local tailoring, Ganni is reducing environmental impact and also creating clothes that fit customers perfectly, which [means they] will then be loved for longer.”

"Online shopping has a huge environmental cost due to the amount of returns that are made."

<h2>Try a tech solution</h2>Technology can also help buyers achieve the perfect purchase and reduce returns. Start-ups like <a href="https://www.perfitly.com/" rel="noopener noreferrer" target="_blank">Perfitly</a> and <a href="https://themodernmirror.com/home/" rel="noopener noreferrer" target="_blank">The Modern Mirror</a> are developing augmented reality (AR) technology to help customers ‘see’ how clothing will fit before they purchase. Similar technology already exists in the beauty industry (L’Oréal, for example, offers AR services allowing customers to ‘try on’ makeup and hair colours) and for accessories.Optical retailer Bailey Nelson offers a ‘<a href="https://baileynelson.com.au/collections/virtual-try-on" rel="noopener noreferrer" target="_blank">virtual try-on</a>’ feature allowing people to try sunglasses and glasses. Not only can these types of services reduce returns, but, according to Bailey Nelson, the virtual try-on feature has also increased conversions by <a href="https://www.cmo.com.au/article/691080/virtual-try-on-sees-bailey-nelson-online-conversions-lift-400-per-cent/" rel="noopener noreferrer" target="_blank">400 per cent</a>.<h2>Forget free returns</h2>Although free returns policies have become ubiquitous – and it’s well known that many customers will buy but then abandon purchases thanks to free returns – some retailers are beginning to introduce paid policies.<a href="https://edition.cnn.com/2022/09/29/business/hm-return-fees/index.html" rel="noopener noreferrer" target="_blank">Global retailer H&amp;M</a> recently announced it was considering testing a paid returns policy, where online shoppers must cover the shipping costs of their returns. In May, <a href="https://www.zara.com/au/" rel="noopener noreferrer" target="_blank">ZARA</a> announced it would charge British customers a £1.95 return fee to return products by mail (a policy already in place in other countries). Other retailers, such as <a href="https://lisasaysgah.com/" rel="noopener noreferrer" target="_blank">Lisa Says Gah</a>, <a href="https://lisasaysgah.com/pages/faq" rel="noopener noreferrer" target="_blank">deduct shipping costs</a> from the overall amount refunded.Another way to reduce the shipping cost of returns is to partner with a reverse-shipping provider or logistics hub to give customers the option to drop returns at designated ‘<a href="https://happyreturns.com/#homepage-return-and-exchange-portal" rel="noopener noreferrer" target="_blank">return bars</a>’ or <a href="https://hubbed.com/network/" rel="noopener noreferrer" target="_blank">drop-off points</a>. That way, returns can be collected in bulk by retailers, removing the final-mile delivery costs and avoiding having to pay for every individual return.<h2>Add friction to ‘free returns’</h2>Charging for reverse shipping is one way to discourage shoppers from returning products. But there are other ways to add ‘friction’ to the returns process and dissuade returns.For example, offering free returns for products that are dropped off in-store removes the cost of final-mile delivery, while offering an extra-long returns period – say 30 days – removes the sense of urgency for consumers who may well forget to return their product or decide to wear it during that period.<h2>Opt for Afterpay</h2><a href="https://afterpay-corporate.yourcreative.com.au/wp-content/uploads/2021/04/Afterpay-Economic-Impact-report-2020-Accenture.pdf" rel="noopener noreferrer" target="_blank">A report by Afterpay Australia</a> found that those who pay with Afterpay are less likely to return their purchases.In Australia, return rates for in-store purchases are around 9 per cent and 20 per cent for online. With Afterpay, return rates are much lower: around 6 per cent for in-store purchases and just 2 per cent for online.This may be because many Afterpay customers use the buy now, pay later platform as a budgeting tool, which drives more considered purchases and a lower rate of return. Afterpay <a href="https://afterpay-corporate.yourcreative.com.au/wp-content/uploads/2021/04/Afterpay-Economic-Impact-report-2020-Accenture.pdf" rel="noopener noreferrer" target="_blank">reports</a> that in 2020, Australian retailers are estimated to have saved $30&nbsp;million in lower depreciation costs and shipping and handling as a result of lower returns.<h2>Outsource returns</h2>If you deal with large volumes of product returns, one way to mitigate the operational costs of handling them is to outsource the entire process to a third party. By engaging a dedicated ‘reverse shipping’ company, you can receive returned products in batches rather than as a steady stream of daily parcels, and even choose to have merchandise verified by a third party rather than overwhelming your warehouse staff.Specialist returns staff – from companies such as <a href="https://happyreturns.com/" rel="noopener noreferrer" target="_blank">Happy Returns</a> and <a href="https://smartreturns.in/" rel="noopener noreferrer" target="_blank">Smart Returns</a>, which operate dedicated returns facilities – may also be faster and more efficient at sorting returns. Many also have relationships with liquidators and recyclers who can help recapture value from damaged products.<h2>Reframe returns as an investment – not a cost</h2>Some experts believe that the secret to reducing the costs of returns is not to view returns as a headache, but to instead reframe them as an investment in long-term customer value.That’s because a good (or bad) return experience can make (or break) a customer’s relationship with that brand. According to <a href="https://optoro-corp.s3.amazonaws.com/WBRConsumerReturns2018OptoroReport.pdf" rel="noopener noreferrer" target="_blank">Optoro</a>, 89 per cent of consumers are less likely to shop at a retailer or brand if they had a bad experience with their returns. On the flipside, 97 per cent of customers say they would be more likely to purchase from a company that they had a positive return experience with.From that perspective, the solution to rising returns may well be to make returns as easy and fast as possible for customers to maximise brand loyalty and extend customers’ lifetime value.That means clearly outlining your returns policy online (including on your header or footer, product pages, cart checkout and FAQ page), and offering customers flexibility, speed and great communication when it comes to delivery and refunds.Reverse shipping provider <a href="https://returnly.com/" rel="noopener noreferrer" target="_blank">Returnly</a> takes this one step further. When customers return a product they are given an instant ‘<a href="https://returnly.com/blog/why-a-successful-holiday-season-starts-with-returns/" rel="noopener noreferrer" target="_blank">Returnly credit</a>’, which allows them to shop for a new item online rather than being forced to wait days or weeks for refunds to be processed. Not only does this enhance the customer experience – and engender their loyalty – but it also increases the shopper’s propensity to buy again.

"Being able to facilitate easy returns plays a huge role in success."

Brett Chester, chief marketing officer at <a href="https://www.shippit.com/" rel="noopener noreferrer" target="_blank">Shippit</a>, describes the returns process as “the other side of the shipping coin,” and something businesses should be thinking about as a core aspect of their business.“Being able to facilitate easy returns plays a huge role in success,” Chester says, explaining that in using third party providers like Shippit, retailers still have full control over return policies while enjoying the many benefits of outsourcing like a reduction in administrative tasks and cheaper shipping rates.Retailers could even look to build returns into the DNA of their brand. For Melbourne-based online furniture retailer <a href="https://eva.com.au/" rel="noopener noreferrer" target="_blank">Eva</a>, a lucrative returns policy that includes free delivery, free pick-up returns and a 365-day return window offers it a unique point of difference in a crowded market – and one that translates into meaningful brand growth.“It starts with thinking about the customer first and then building that into product margins,” says Lia Ang, Eva’s head of marketing, adding that its flexible policy “is the feature that resonates strongest with customers”.She explains, “We know that delivery and pick-up costs are huge turn-offs when it comes to purchasing online, so the balance to strike is to make sure your margins are enough to absorb those costs for the customer while not being so exorbitantly high [that] customers won’t pay for your product.”While a year-long-returns policy is generous, Ang says the unique position also works as a way of creating consumer confidence, saying, “what we were hoping to illustrate is the trust in the quality of our products, and that we design and build products to be with you for a long time”.

A happy holiday season starts with a strong returns policy. Here’s how to cut the costs of returns and keep customers happy.

How to cut the costs of returns - from presenting products clearly to charging for returns - and keep customers happy during the holiday season.

Reduce product returns: 5 tips to save money and reduce returns

Five ways to reduce returns – and save money

It’s one of the biggest dates in the retail calendar. Here’s how retailers can make the most of the Boxing Day sale.

Before Black Friday, before Cyber Monday, before Single’s Day, there was Boxing Day.And while Boxing Day may no longer be the biggest sales event in Australia (that distinction goes to Black Friday), it is still beloved by bargain hunters, who spend nearly $3 billion every year, online and in-store.And in 2022, after several summers of bushfires and pandemic restrictions, hopes are high for spending during the festive season and beyond (up until <a href="https://www.afterpay.com/en-AU/business/access/boosting-profitability/preparing-for-inflation" rel="noopener noreferrer" target="_blank">inflation</a> and soaring interest rates impact consumer confidence in 2023).Here’s how to get the most out of this year’s Boxing Day sales:<h2>Be prepared, early</h2>Bargain-hunters take Boxing Day very seriously. That means long queues outside stores and surges in online traffic. For retailers, it’s important to get prepared well ahead of time.In 2021,<a href="https://www.finder.com.au/boxing-day-sales-times" rel="noopener noreferrer" target="_blank"> Finder.com.au</a> found the vast majority of online shopping occurred between 6am and 2pm on December 26. There was also a two-hour surge in online traffic between midnight and 2am, as shoppers logged on to be first to bag bargains.In the weeks before Boxing Day, retailers should prepare in-store signage, online banners and pop-ups, as well as social media posts alerting customers to discounts and deals, and schedule emails and posts to go live when the sale starts.<h2>Cut through with comms</h2>Shoppers are likely to be inundated with Boxing Day sales promotions, so it’s important to ensure that yours stands out with strong, clear offers and discounts.At such a noisy time of year, it’s also worth considering creative ways to capture customers’ attention. For example, you could encourage shoppers to spend their Christmas gift cards with you or offer VIP customers extra loyalty points or benefits.Decide the most appropriate channels for your customers – whether that’s email, SMS or social media (or all three) – and consider personalising offers to different customer segments or sending targeted emails to online shoppers with abandoned carts or wishlisted products to alert them that the item is on sale.Don't forget to visit the Afterpay holiday toolkit and download your free Boxing Day assets for web, social and email and more.

Article Image

<h2>Forecast demand</h2>Want to know what shoppers will be searching for in the Boxing Day sales? Start by looking back on historic sales data to identify what sold well in previous years, and also check which products are popular among customer wishlists, as many customers pre-plan what they’ll buy in sales and add the products to their wishlist.Remember that customers shop differently on Boxing Day compared to Black Friday and Cyber Monday (BFCM). Unlike BFCM, where many shoppers stock up on festive gifts for others, Boxing Day shoppers are more likely to be buying for themselves.<a href="https://www.theguardian.com/australia-news/2021/dec/26/australians-tipped-for-record-21bn-summer-shopping-splurge-as-boxing-day-sales-begin#:~:text=Meanwhile%2C%20a%20Commonwealth%20Bank%20survey,next%20on%20the%20shopping%20list." rel="noopener noreferrer" target="_blank"> In previous years</a>, clothing, home electronics and white goods have been particularly popular categories in Australia.<h2>Brief staff</h2>Sales staff – whether they are in-store sales assistants or online customer support staff – need to be briefed on what to expect, how to manage inventory issues and how to handle gift cards.&nbsp;Gift cards have become one of the most popular gift options in recent years, and eager customers often cash theirs in on Boxing Day. It’s important to ensure that all staff understand exactly how they can be redeemed.<h2>Set your delivery policy early</h2>It is crucial to decide on delivery terms and options well ahead of Boxing Day. Ensure that delivery times and fees are clearly communicated on your website, and consider offering a range of delivery options – from standard shipping to express delivery and click-and-collect – to remove any barriers to purchase.Similarly, ensure your refund policy is clearly visible on your website.&nbsp;<h2>Think past sale day</h2>It’s one thing to drive sales and revenue on Boxing Day. However, to ensure that your Boxing Day strategy continues to deliver dividends well into 2023 and beyond, take time to consider how you will convert one-time sales shoppers into long-term customers.For brick-and-mortar retailers, the answer may be collecting customer data via e-receipts (and incentivising staff to do this). For e-commerce retailers, it’s important to collect information or add customers to your subscriber list so that you can connect with them after Boxing Day.

It’s one of the biggest dates in the retail calendar. Here’s how retailers can make the most of the Boxing Day sale.

It’s one of the biggest dates in the retail calendar. Discover tips on how retailers can make the most of the Boxing Day sale, by forecasting demand, preparing early and thinking beyond sale day

Boxing Day sale for retailers: top tips to prepare your store 

How to prepare your store for Boxing Day bargain hunters

boxing day sales retail tips

The secrets to stocking the right products to meet customer demand.

In every business, there are fun and creative parts – whether that’s dreaming up new products or devising out-of-the-box revenue strategies. There are also less glamorous parts. Chances are, inventory forecasting – also known as demand planning– falls into the ‘less glamorous’ category for many retailers.Yet this back-end business practice is something that every business owner must master if they want to be profitable. “Good inventory management will increase sales, maximise sales potential and reduce costs,” says Marguerite Bell, managing director of <a href="https://www.retaillife.com.au/" rel="noopener noreferrer" target="_blank">Retail Life</a>. “If [something isn’t] in stock, you can’t sell it – or enough of it – and if your supply exceeds demand, you are wasting money.”A solid inventory forecasting strategy is about having the right amount of stock at the right time— you must optimize for account seasonality, trends, past performance and customer patterns. Planning is key. “It also reduces the volume of slow-moving items that take up time, space, and money [as well as reducing] losses from markdowns and out-of-stock [items],” says Bell.No matter how big or small your business, there are simple principles that will make inventory forecasting work for you.

"Good inventory management will increase sales, maximise sales potential and reduce costs."

<h2>Track inventory</h2>The first – basic – step in creating a good inventory forecast is to record all inventory movements, says Bell, and look at historical data in order to predict the future. This is known as quantitative forecasting.Six months of historical data is a good start, but a year or more will offer a deeper understanding. “Sales data is king – it is essential that all stock movements in and out are recorded – accurate data is critical to effectively managing [your] inventory.” Once you have precise data, you can monitor sales trends, both from recent weeks and over time, which will help identify patterns.<h2>Invest in software that makes demand planning easy</h2>Unless you’re a statistics wizard, you will most likely need software or digital tools to help you get your head around the data.For small businesses with limited inventory, basic spreadsheets may work, however, larger businesses should consider more sophisticated software systems. <a href="https://www.netsuite.com.au/portal/au/home.shtml" rel="noopener noreferrer" target="_blank">Oracle Netsuite</a>, <a href="https://www.acumatica.com/" rel="noopener noreferrer" target="_blank">Acumatica</a> and <a href="https://au.syspro.com/" rel="noopener noreferrer" target="_blank">Syspro</a> offer embedded inventory forecasting tools, machine learning and enterprise resource planning (ERP) that integrates supply chain, accounting and more. Inventory management software is generally known as ‘perpetual inventory’ software as it delivers real-time information about inventory levels.“There are many inventory planning options on the market that are relatively inexpensive and will provide retailers with all the necessary metrics and reporting tools,” says Bell, adding, “you need a suite of reports to assist in analysing data, be it stock-on-hand, best-sellers or category performance”.It’s worth noting that many point-of-sale systems, including <a href="https://squareup.com/au/en" rel="noopener noreferrer" target="_blank">Square</a>, come equipped with <a href="https://squareup.com/us/en/point-of-sale/features/inventory-management" rel="noopener noreferrer" target="_blank">inventory management systems</a>.

<h2>Audit regularly for an accurate inventory forecast</h2>While inventory management software aims to automate your replenishment processes as much as possible, it is still important to conduct regular inventory audits.Inventory forecasting mismatches occur when actual stock levels are different to those reported by your software. This can happen because of ‘shrinkage’, for example, caused by theft, product damage, human error, disorganised stockrooms or returns fraud.The solution is regular inventory reconciliation, which can be performed by physical stock-checks – comparing reported levels of stock with actual levels, usually at the end of the financial year or the end of the season – or spot checks.<h2>Review suppliers regularly</h2>Auditing stock levels is one thing, but it can also pay to audit suppliers themselves. This will help you monitor which suppliers are consistently late or whether suppliers are regularly supplying incorrect quantities of products. Supply chain problems can spell trouble for your lead times, productivity and forecast.If you discover suppliers who are regularly causing problems with your supply chain, first attempt to address the issues and if this isn’t possible, consider seeking new suppliers.<h2>Work hand in glove with other departments</h2>“Merchants tend to see ‘buying’ and ‘inventory management’ as two separate functions,” says Bell. But if you’re not on top of your inventory management – and it’s not feeding into your buying decisions – you’re missing an opportunity. “One is creative, and one is technical but only when they work together seamlessly are sales optimised.”Similarly, it’s important to work closely with different teams within your business when making a demand forecast. The marketing team, for example, may be aware of key advertising campaigns or promotions that could spike demand, while the social media team may be able to pinpoint micro or macro social media trends that will impact sales.<h2>Pay attention to trends&nbsp;</h2>You can’t predict every trend, but it pays to keep your finger on the pulse when it comes to buying behaviours and how consumers are shopping.From what’s trending on TikTok, to generational shifts (such as Gen Z entering the workforce) and new regulations or legislation that could impact your product or category, make it your business to understand the context and industry in which your business is working. These are all important factors when it comes to inventory forecasting.

<h2>Clear out your warehouse</h2>Warehouse management is an important part of forecasting future stock levels; if you’ve worked out that you need a large amount of stock, there’s nothing worse than having no room for it; Bell highlights the need to “clear non-performing stock and aged stock”.<a href="https://www.afterpay.com/en-AU/business/access/operations/excess-stock-covid" rel="noopener noreferrer" target="_blank">Need to shift excess stock</a>? Consider gift-with-purchase strategies that bundle old or ‘dead’ stock with other products to deliver added value for customers.Discounts (or discounts to VIP customers only) and reselling to third parties are other options. If you have an oversupply of seasonal products, such as winter knits or summer swimwear, consider promoting these products to customers in the opposite hemisphere. After all, holidaymakers in the UK will be on the lookout for bathers at exactly the same time that we are packing them away for the winter.Clearing excess stock is cost-effective (reducing warehousing costs), and keeping inventory levels low can assist with forecast accuracy.<h2>Consider seasonal trends that affect demand planning</h2>“Remember, failing to plan is planning to fail,” says Bell. “Plan ahead – identify key events, and marketing activities that will impact sales and stock volumes.”Look at your marketing calendar for the year and identify seasonal sales periods (like Christmas and EOFY), as well as times of the year that your products traditionally surge in demand (like socks for Father’s Day or pencil cases for back-to-school) and tweak your inventory forecasting accordingly. Good planning is demand-driven.If you have historical seasonal data, comb through it. “Using [your] gut feeling rather than data to make business decisions,” is one of the biggest mistakes merchants make, says Bell.Another way to cross-check demand for seasonal products is to look at Google Trends, which shows when people start searching for products.<h2>Consider delays</h2>You can’t control the weather or worldwide shipping issues, but you can have a best- and worst-case scenario plan. “Retailers must focus on what they control – such as known lead times – then ensure that these lead times are built into the order cycle along with contingencies for unknown issues,” says Bell. “COVID-19 taught many retailers that they needed to rely not only on overseas manufacturers and wholesalers but moving forward to include local options to mitigate risk to inventory levels.”&nbsp;

"COVID-19 taught many retailers to rely not only on overseas manufacturers and wholesalers but to also include local options to mitigate risk."

<h2>Master inventory forecasting metrics</h2>Even if your business uses automated inventory software, it’s useful to understand— as well as calculate and monitor—a few key demand planning metrics. These include:Safety stock: The amount of product you need to prevent stock-outs (or out-of-stock situations).Safety stock = (Maximum number of units sold in a day x maximum lead time for stock replenishment) – (Average daily usage x average lead time in days).In other words, let’s say that the maximum number of T-shirts you’ve sold in a day is 20 but on average you sell five. When you reorder it takes five days to reorder but has taken up to 10 days in the past.The T-shirt’s safety stock level is (20 x 10) - (5 x 5) = 175.Reorder point: The point at which you should replenish.Reorder point (ROP) = (Number of units used per day x lead time in days) + safety stock level.If you sell 20 T-shirts a day, the lead time is five days and your safety stock level is three, then your ROP would be (20 x 5) + 3 = 103. So, when you have fewer than 103 T-shirts, it’s time to reorder.Days to sell inventory (DSI): The average number of days it takes to sell inventory. If your DSI is creeping up this suggests that you’re not managing inventory properly.

The secrets to stocking the right products to meet customer demand

Getting started with inventory forecasting? Discover inventory management tips to optimise your demand planning so you never overstock or understock again.

Inventory forecasting: the small business secrets to demand planning

Inventory forecasting: the small business guide

Inventory Forecasting

Creating memorable customer experiences is a highly effective way to attract new customers and get repeat business. And there are some that can only be lived in a bricks-and-mortar setting, which is something you can take advantage of. So, what is the secret to great experiences and how can you replicate them in your business?

<h3>Know if you’re a task or leisure mode retailer</h3>There are two fundamental modes that shoppers behave in when they shop: task and leisure. This insight is important for retailers because when you know this, you can work out what type of customer mode you’re servicing and optimise your experience towards that mode.Task mode is shopping to complete a task, like buying groceries with a list. If you’re a task mode retailer, your role is to solve a customer’s problem quickly. So, your customers will value a seamless and smooth experience.&nbsp; 	Leisure mode is when you’re looking to take your time and enjoy an experience, like shopping with friends or browsing. If you’re a leisure mode retailer, your role is to enrich the customer experience, allowing them to shop and browse at their own pace, offering advice and support as needed. Layout your store to encourage browsing and group complementary products together for impulse buys.&nbsp;You can also play both roles, which if executed well can be commercially beneficial. For example, placing task mode items at the back of your store gives a customer time to switch into leisure mode and pick up other items on their way to the checkout.Find out <a href="https://www.youtube.com/watch?v=r2feDJVXFCM" rel="noopener noreferrer" target="_blank">what type of retailer you are </a>with retail expert Matt Newell.

<h3>Make your store easy on the senses</h3>It should come as no surprise that it’s not just your product or service that draws customers into your store. Lighting, music, store layout and design—even the scent—can influence shopper behaviour. Creating beautiful, interesting or exciting spaces that people want to be in will not only keep them in there longer but will get them coming back for more.&nbsp;What your store looks like, feels like and smells like should reflect your brand. It’s the ultimate reflection of who you are and what you stand for, so take your time getting it right.&nbsp;&nbsp;Touch: Let your customer interact with your products. Tactile experiences can influence purchases.Taste: If you’re in the food and beverage business, you can’t go past offering free product samples.&nbsp;Smell: Scents can trigger memories and emotions that shoppers can link to brands and products. This can help drive repeat purchases.&nbsp;Sight: Lighting can not only guide people instore, but it can create an alluring atmosphere. Complement it with colours, design and textures to control where and how a customer interacts with your store.Sound: The music you choose should reflect your brand and appeal to your audience. The tempo of the music can have an impact on how fast or slowly people move through your store.

<h3>Use visual merchandise to influence sales </h3>Visual merchandise&nbsp; is how you layout your store and display products and signage to motivate customers to shop with you. It impacts every area of your store and when done well, will guide customers to purchase.The front of store is where customers are most influenced to purchase unplanned items, so placing your most expensive or profitable products here is a great way to increase your bottom line. Use this real estate to run eye-catching promotions to bring customers in, where you can sell them on other products.Once inside the store, think about how your customers will navigate their way around. Create a path that makes it easy for them to explore and interact with your products. Avoid making it feel cluttered or too hectic. Focus on keeping it clean and inviting - give your products room to ‘breath’ and stand out and arrange items so they’re easy to find. Along the way, set up different displays that clearly show prices. This is especially important if you’re offering discounted items or deals.

<h3>Invest in your staff</h3>Training your staff how to engage with and relate to customers will be time and money well spent. You want your team to create genuine connections with your customers, so interactions don’t feel fake and mechanical. Not only will it put your customers at ease, but it will lay the foundations for cross-selling and upselling.Get your staff to make customers feel welcomed when they enter the store. A bit of small talk is a simple way to make them comfortable and to start building some rapport.Asking open-ended questions, where a customer can’t answer yes or no but needs to provide detail, can help staff better understand what the customer needs. Armed with this information, your staff can start offering items that match what the customer is looking for and suggest other items or services to complement their purchase.&nbsp;If you offer a Buy Now, Pay Later (BNPL) option like Afterpay, make sure you train your staff on how to introduce it into the conversion. This is especially important if financing forms part of your sales process, say, for big ticket items. The conversation needs to feel natural and be seen as a benefit for the customer—not a bolt-on that makes customers feel like they’re being forced into signing.

<h3>Let customers try before they buy</h3>The idea of getting something for free can be a real drawcard for customers. For example, if you’re a beauty retailer you could allow customers to try different perfumes or if you run a food &amp; beverage outlet, free food samples always go down a treat.&nbsp;Product sampling lets your customers get a ‘taste’ for something before they commit to buying. And the benefits can be rewarding.<ul><li>It lets you increase the awareness of your products and brand with new and existing customers.</li><li>By offering something free to customers, they can feel compelled to return the gesture in the form of a purchase.</li><li>You can boost your customer’s confidence in the product you’re selling and help them with their purchasing decision.</li><li>Offering samples of higher priced items can help you capture sales at the point of purchase.</li></ul>&nbsp;No matter what approach you take, remember to keep the customer experience consistent across all your touch points. And don’t be afraid to test out new ideas and measure &amp; capture how your customers respond.

Creating memorable customer experiences is a highly effective way to attract new customers and get repeat business. 

5 tips for designing memorable instore customer experiences

5 tips for designing memorable instore customer experiences ANZ

Around
 <a
 href="https://auspost.com.au/content/dam/auspost_corp/media/documents/ecommerce-industry-report-2022.pdf"
 rel="noopener noreferrer"
 target="_blank"
 >80% of Australians</a
 >1 shop online
 and in 2021, they spent a record $62.3b.


 There are enormous revenue opportunities in the online space, but to get a
 slice of the pie and hang on to it, you need to get the experience just right.


 With
 <a
 href="https://www.pwc.com/us/en/advisory-services/publications/consumer-intelligence-series/pwc-consumer-intelligence-series-customer-experience.pdf"
 rel="noopener noreferrer"
 target="_blank"
 >73% of consumers</a
 >2 saying
 customer experience is an important factor in their purchasing decisions, it’s
 vital that you pay attention to every step in the buyer journey so you convert
 sales. Here are five ideas to help you create the ideal customer experience.

<h2>Optimise for mobile</h2>Mobile phones are the <a href="https://auspost.com.au/content/dam/auspost_corp/media/documents/ecommerce-industry-report-2021.pdf" rel="noopener noreferrer" target="_blank">most used device</a>1 for online shopping, with around 91% of Australians using them to make purchases. Not surprising, a good mobile design and a thoughtful user experience can have a significant impact on conversions.

<h2>Add live chat for product queries</h2>When a customer shops in-store, they have the luxury of being able to speak to someone about their purchase. Replicating this experience online with live chat can help increase your conversion rates because customers can get the support they need in real time.Another benefit of live chat is that you can capture insights into frequently asked questions, which you can address on your website so people can self-serve. It can also give you valuable <a href="https://www.afterpay.com/en-AU/business/access/customer-service/seek-customer-feedback" rel="noopener noreferrer" target="_blank">feedback</a> on your products, prices and website.There are plenty of great live chat applications that you can embed into your website. Each offers different features and pricing plans. and some are better suited to smaller operations. Here are a few you might want to take a look at:	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LiveChat	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HubSpot Live Chat	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LiveAgent	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tidio	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Drift	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ClickDesk	●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Olark

<h2>Reduce pop-ups and distractions</h2>Pop-ups can be useful when done right, like capturing leads for the sales team. But when they get in the way of a sale or slow down the process, they can do more harm than good. Most people aren’t fans of a pop-up. Hubspot found <a href="https://blog.hubspot.com/marketing/why-people-block-ads-and-what-it-means-for-marketers-and-advertisers" rel="noopener noreferrer" target="_blank">73% of browsers</a>3 dislike online pop-ups.If your end goal is to drive purchases, then your customer journey should be focussed on achieving this. You want to minimise the friction on the path to the cart and through the checkout process. Remove any unnecessary links or pop-ups that could distract your customer’s attention.

Numerical Highlight List

<h3>Minimise clicks from landing page to checkout</h3>Imagine being in-store and when you tried to make your way to the checkout, people stepped in front of you to ask questions, get you to take actions, take a few steps back and then have you repeat some of those steps. You’d drop what you’re holding and walk out. Online is no different. From the moment they land on your site to checking out, you want to minimise the steps and expedite the sale. Keep clicks to a minimum; save what’s in their cart so if they need to come back, they don’t have to start over; reduce form fields, and streamline the process where you can. Don’t make them have to go through countless and unnecessary pages and fill in more information than required.<a href="https://www.afterpay.com/en-AU/express-checkout" rel="noopener noreferrer" target="_blank">Afterpay’s Express Checkout</a> is a great example of how to significantly reduce the number of steps it takes for a customer to checkout. Not only does it save time, but it’s been shown to:●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;increase site conversion rates by up to 2X4 compared to other offered payment methods ●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;reduce cart abandonment by up to 23%5●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;increase order frequency by 9.2%5●&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;increase sitewide sales by up to 9.8%5.

<h3>Add a favourites list</h3>Not every customer that comes to your site is ready to buy. But that doesn’t mean they won’t be back. And when they do, you want them to be able to pick up where they left off. Allowing your customers to <a href="https://www.afterpay.com/en-AU/business/access/news/favourites-customer-product-feature" rel="noopener noreferrer" target="_blank">mark their f﻿avourites</a> as they browse lets them create a personalised list that they can come back to when they’re ready to buy.The other advantage of favourite lists is that you can email your customers later with a reminder about what’s on their list. Adding a timed offer or free shipping if they buy now, for example, could help motivate them to checkout sooner.By following these tips, you can help drive more conversions and create experiences that will keep your customers coming back for more.

Source: 
 <ol>
 <li>2022 Inside Australian Online Shopping - eCommerce Industry
 Report, Australia Post.</li>
 <li>Experience is everything: Here’s how to get it
 right, PWC, 2018.</li>
 <li>Why People Block Ads (And What It Means for Marketers and
 Advertisers), Hubspot, 14 January 2020.</li>
 <li>According to a global Afterpay
 study conducted in June 2021.</li>
 <li>According to a global Afterpay study
 conducted in November 2021.</li>
 </ol>

Here are five ideas to help you create the ideal customer experience.

Optimising the customer checkout experience

Need inspiration? We asked successful entrepreneurs about the lessons they wished they had known when starting their business.

Get a bookkeeper sooner&nbsp;“I took on a bookkeeper about 2.5 years after I started my business, and I wish I had done it sooner. For the longest time I tried to do everything myself - partly to save money and partly because I love to continuously learn.&nbsp;But I’ve learned that the DIY approach doesn’t always save money. For example, it took me four or five times as long as a bookkeeper to do the accounts. It’s better to ‘get over yourself’ and outsource to brilliant minds - otherwise you’ll end up paying in time and quality.Another area I believe in investing in? Self and professional development. I see my mentor regularly, and he really gives me clarity and direction.”<a href="https://www.afterpay.com/en-AU/business/access/success-stories/rumbie-mutsiwa-interview" rel="noopener noreferrer" target="_blank">Rumbie Mutsiwa, Rumbie &amp; Co.</a>

Work hard – but take care of yourself“People will probably tell you, ‘You’re too much’. When you’re [working hard] with tunnel vision, they’ll observe everything you’re doing, and be negative about it. They’ll say, “You’ll get burn out”, “I don’t get how you do it all” or “Calm down”.“Ignore them and listen to yourself and how you really feel. If you want to work in your spare time, then work. Don’t let anyone else make you feel bad for working towards your dreams. Having said that, if you have a spare hour and you feel low on energy, take a bath, watch Netflix – whatever you need to do to recalibrate.”<a href="https://www.clearpay.co.uk/en-GB/for-retailers/access/success-stories/sassy-shop-wax-keely-parsons-interview" rel="noopener noreferrer" target="_blank">Keely Parsons, Sassy Shop Wax</a>

Build a website that converts&nbsp;&nbsp;“Most of your website visitors want to buy from you. However, there are likely a number of points in the user journey which is stopping them. UX (User experience), design, copywriting and your checkout all have a major part to play on conversion rate. Invest as much as you possibly can into CRO (conversion rate optimisation) and prioritise this before you attempt to run paid traffic. “<a href="https://www.clearpay.co.uk/en-GB/for-retailers/access/success-stories/balance-coffee-james-bellis-interview" rel="noopener noreferrer" target="_blank">James Bellis, Balance Coffee&nbsp;</a>

Be yourself&nbsp;“My whole life, people have wanted to tone me down, and then I realised being bold was my super power.Let your personality shine through your work. If you embrace who you are and what you love in your business, you will always stand out and be unique."<a href="https://www.afterpay.com/en-US/for-retailers/access/case-studies/dazey-la" rel="noopener noreferrer" target="_blank">Dani Nagel, Dazey LA</a>

Ask questions“The one piece of advice I wish I’d had from the get-go is: don’t be afraid of asking questions, reaching out to people and connecting with people outside of your network.&nbsp;“It's amazing the opportunities that can arise by building your network and asking questions, you never know what the answer will be! Whether it's someone you look up to in your industry, a potential business partner or a collaboration, you never know what will come of it.”<a href="https://www.afterpay.com/en-AU/business/access/success-stories/athletikan-interview" rel="noopener noreferrer" target="_blank">Robbie Ball, Athletikan </a>and Uncle Jack watches

Watch your cashflow "The biggest lesson I’ve learnt along the way is keeping tabs on <a href="https://www.afterpay.com/en-AU/business/access/boosting-profitability/cashflow-management-tools" rel="noopener noreferrer" target="_blank">cashflow</a> - check it regularly (not just every six months!) and be conservative in your forecasts. The fashion industry is notorious for fluctuation, and it’s important to have space to accommodate that.Plus, you need to set aside enough for growth - so that you’re ready to pivot strategy ASAP. You need a strong and structured way of working, to give flexibility to change and test ideas quickly, and thoughtfully.&nbsp;I really credit a strong focus on cashflow with keeping us on track during times that could have otherwise been really damaging for the business.Elisabeth Harvey, <a href="https://nicounderwear.com/" rel="noopener noreferrer" target="_blank">NICO</a>&nbsp;

Reframe failingI've learned over the years that to grow your business you can't be afraid to try new things.&nbsp;Not everything you do will work and that's ok.&nbsp;Repeat after me "it's ok to fail."&nbsp;Because when you fail - you learn.&nbsp;Just pick yourself up, apply the knowledge you've gained and move forward - just never go backwards - go forward in a slightly different direction.<a href="https://www.afterpay.com/en-AU/business/access/success-stories/bondi-born-dale-mccarthy-interview" rel="noopener noreferrer" target="_blank">Dale McCarthy, Bondi Born</a>

Hire for your weaknesses“I recommend hiring for your weaknesses right away. Hire for skill not pedigree. Don't hire someone just because they worked at a big-name company. Hire the person that shows they can get the job done and add value.Once you’ve recruited them, set monthly/quarterly/ yearly KPIs for each team member so they know what they are optimising for.&nbsp;Olamide Olowe, <a href="https://mytopicals.com/" rel="noopener noreferrer" target="_blank" style="background-color: rgb(255, 255, 255); color: rgb(34, 34, 34);">Topicals skincare&nbsp;</a>

Don’t skimp on photography&nbsp;“As an e-commerce business, content is everything to us as it shows our customers our product. In the early days of the business we paid a lot of money to shoot content, including a three-day e-commerce shoot to photograph every colour of each product SKU. Unfortunately, they didn’t nail the lighting and the colours looked fake.My advice is to have a trusted photographer and stylist on board; creatives with runs on the board. I’d also advise having a session beforehand to discuss examples that you like and don’t like, and to draw up a clear shot list, too.&nbsp;Overall, I’d say, just give it your all. It doesn’t matter if you fail as there is always tomorrow. It’s amazing to watch something grow from scratch, building it yourself! Worth every piece of fear!”Georgie Cavanagh, <a href="https://www.carlottaandgee.com/" rel="noopener noreferrer" target="_blank" style="color: rgb(34, 34, 34); background-color: rgb(255, 255, 255);">Carlotta and Gee</a>

Seek advice from mentors“I have found throughout my entire business career that if you discuss any business idea with friends and family, they will give you a dozen reasons why it’s a bad idea and how you will lose your money.“They’ll say: “You’ll waste your time”, “There’s too much competition”, “The economy looks challenging”, “COVID-19”... The real reason is that they are projecting their own fears on to your business concept - not offering a sound appraisal.“Trust your intuition, but also find a truly successful business mentor to help guide your decision making. They will critique your idea and challenge your concepts in a useful way, having been in your shoes previously.”<a href="https://www.clearpay.co.uk/en-GB/for-retailers/access/success-stories/simply-bike-stuff-interview" rel="noopener noreferrer" target="_blank">Rob Arnold, Simply Bike Stuff</a>

If in doubt: outsource“Do not underestimate the value of time - your time is your greatest asset.I would say to really invest your time wisely, if you don’t have that ability, find someone to help you with those types of things. Don’t bother learning how to code a website if you don’t know how to do it; hire experts in their fields in which you’re not equipped.”Ava Matthews,<a href="https://www.afterpay.com/en-AU/business/access/success-stories/ultra-violette-sunscreen" rel="noopener noreferrer" target="_blank"> Ultra Violette&nbsp;</a>

You can’t do it alone“Business is not a sole venture, not one person knows or can do it all. It takes a team, a community. My advice is to build a culture of empathy within your business. Be flexible, be kind, move with purpose, don’t overthink things, and make decisions that feel right for your team and the community you serve.Ted Vadakan, <a href="https://www.poketo.com/" rel="noopener noreferrer" target="_blank" style="background-color: rgb(255, 255, 255); color: rgb(34, 34, 34);">Poketo</a>

Discover the power of partnershipsSomething I wish I had focussed more on when I first started was the power of partnerships and collaborations. I thought we were too new and too small and that no one would want to partner with us. In fact collaborations are a relatively cheap and easy way to grow your customer base and increase brand recognition - something I wish we started doing earlier.&nbsp;&nbsp;When picking the perfect partner your industries don't necessarily need to align but your values, ethos and target market should. Be bold and don't be afraid to send a cold pitch to a brand explaining how you envision the partnership working and keep following up and chasing them until you get a response.&nbsp;Aside from that? My biggest piece of advice would be to just do it! I am a perfectionist and when I first started out, I was so concerned about everything being perfect, beautiful and seamless. In hindsight, I wish I'd been less hesitant and just jumped right in!&nbsp;Lottie Dalziel, <a href="https://banish.com.au/" rel="noopener noreferrer" target="_blank" style="color: rgb(34, 34, 34); background-color: rgb(255, 255, 255);">Banish</a>

Entrepreneurs and small business owners share their tips and advice for success with Afterpay Access

Entrepreneur tips: 11 founders share the advice they wish they wish they'd known

11 entrepreneurs share the advice they wish they'd known 

inspirational business advice

Happy, productive employees make for a more profitable business and more enjoyable workplace. Here’s how to retain and engage your employees.

While it’s true that the customer is always right, there is another group of people who are just as important to your business – your employees.Experts estimate replacing a valuable employee can cost a business<a href="https://www.afr.com/work-and-careers/careers/the-real-cost-of-losing-a-star-performer-20200217-p541go" rel="noopener noreferrer" target="_blank">&nbsp;two to three times the outgoing employee’s salary</a>&nbsp;thanks to costs associated with hiring, onboarding, reduced productivity and engagement.And the issue of employee retention has never been more relevant than right now.As we emerge from the pandemic, employees are increasingly rethinking their priorities – and their jobs. Resignation rates are so high –<a href="https://hbr.org/2021/09/who-is-driving-the-great-resignation" rel="noopener noreferrer" target="_blank" style="font-size: 20px;">&nbsp;4 million US</a>&nbsp;workers quit in July 2021, while<a href="https://www.theguardian.com/money/2021/nov/01/the-great-resignation-almost-one-in-four-workers-planning-job-change" rel="noopener noreferrer" target="_blank" style="font-size: 20px;">&nbsp;a quarter of UK workers</a>&nbsp;are planning to leave their jobs – that a new term has been coined: the Great Resignation.&nbsp;But it’s not just about employee retention; keeping employees happy, engaged and motivated is the key to ensuring they remain productive, and that your business remains successful.Recent<a href="https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx?g_source=EMPLOYEE_ENGAGEMENT&amp;g_medium=topic&amp;g_campaign=tiles&amp;thank-you-report-form=1" rel="noopener noreferrer" target="_blank" style="font-size: 20px;">&nbsp;global research</a>&nbsp;found that just 20 per cent of employees globally are engaged, and estimated low employee engagement costs the global economy a staggering US$8.1 trillion.In service industries including retail, where customer experience is key, happy and engaged employees are particularly critical.So, how can you keep your employees engaged and retained – and reduce staff turnover? Here are our top tips for devising an employment retention strategy.<h2>Create a clear onboarding process</h2>Ever heard the phrase, ‘start as you wish to continue’? It's pivotal to your&nbsp;employee&nbsp;retention strategy.To ensure workers feel connected and, in turn, motivated to perform for your organisation, it’s important to create a comprehensive onboarding process.“Companies need to set up each new starter for success and ensure their newest team members have what they need in terms of knowledge, equipment, and employee networks,” says Leigh Davies, team leader of global recruitment firm<a href="https://drakeintl.com/global-en" rel="noopener noreferrer" target="_blank"> Drake International</a>.

"Ensure newest team members have what they need in terms of knowledge, equipment, and employee networks."

That means ensuring each new employee has a clear understanding of the role and their responsibility – and perhaps creating an onboarding pack with all the information, contacts and log ins they need.&nbsp;This will help new members thrive in their new role and reduce the risk of employee turnover, Davies explains.&nbsp;The onboarding process also helps set realistic expectations about the role, says Wendy Jenkins, an HR manager-turned-certified resilience coach and founder of Ready Resilience.“[Employees] have had the marketing pitch in the interview, so we want to give them as much certainty as possible about what they’re there for, who they can reach out to, what benefits there are to them joining and what’s expected of them.“Where there’s potential for employees to feel stress or workload overwhelm, set them up with the tools to manage those stressors. It’s important they come away from onboarding feeling motivated, enthusiastic and confident in what they’re going to do; knowing they have everything they need to feel resourceful, autonomous, and ultimately thrive, ” Davies says.<h2>Keep managerial communication lines open</h2>There is an oft-repeated phrase that ‘employees don’t leave companies, they leave managers’, and a key part of the employee-manager relationship is keeping communication lines open.Employees who feel their voice is heard are<a href="https://www.forbes.com/sites/nazbeheshti/2019/01/16/10-timely-statistics-about-the-connection-between-employee-engagement-and-wellness/?sh=ffd485422a03" rel="noopener noreferrer" target="_blank"> 4.6 times more likely</a> to feel empowered to do their best work. In addition, according to the<a href="https://hbr.org/2016/12/what-great-managers-do-daily" rel="noopener noreferrer" target="_blank"> Harvard Business Review</a>, employees who get limited one-on-one time with their manager are more likely to be disengaged.

Employees want to feel supported and listened to.

“What consistently comes up during my sessions is that employees want to feel supported and listened to,” says Jenkins. “They want to know their manager has their back. Again – it’s about minimising their uncertainty – the better you communicate, the more certainty they will feel heard. Sometimes people need to hear something more than you think, especially if they are in a stressful situation.”<h2>Foster connection between co-workers</h2>Creating open communication lines extends to co-workers, too, says Jenkins.“The majority of us are hardwired to want to connect with others. Providing opportunities for employees to engage with their colleagues outside of work processes is really important,“ she explains.&nbsp;&nbsp;Davies adds that employees perform better when they are operating “in a culture of positive reinforcement, support, and collaboration”.So, how can you build effective communication&nbsp;with and between employees, and foster a positive company culture amongst your workforce? The answer will depend on the size, structure and development phase of your organisation. However, here are some tips:

Other ideas include offering regular engagement surveys and asking employees for feedback – both positive and negative. “Anonymous surveys encourage open and honest feedback, which can be used to create a safe space to provide feedback and ultimately to enhance the employees experience in the workplace,” says Davies.<h2>Help employees grow and learn</h2>Humans are inherently driven to grow and evolve – and this is true at work, too. One study recently revealed that over half of employees would<a href="https://assets.online.rmit.edu.au/cdn/ff/DdDm2DW8b5WnLbn2dQy1fgOenjzqCrpzYQv8F-vyngI/1612754024/public/whitepapers/RMIT%20Online_ReadySetUpskill.pdf" rel="noopener noreferrer" target="_blank"> choose extra training over free lunches</a> at work, and one in four would prefer $1000 a year to spend on training rather than a $50-a-week pay rise.In a world where technology is constantly changing, most employees understand the importance of upskilling and remaining relevant, says Davies.“Employees are valuing the opportunity to grow, which in turn positively impacts their career trajectory.”&nbsp;One business that prioritises education is e-commerce fashion giant<a href="https://www.asos.com/" rel="noopener noreferrer" target="_blank"> ASOS</a>, which LinkedIn named<a href="https://asoscareers.asos.com/ASOS/WorkingatASOS/LearningDevExperience.html" rel="noopener noreferrer" target="_blank"> UK’s most desirable company to work for</a> in 2018. It offers<a href="https://asoscareers.asos.com/ASOS/WorkingatASOS/LearningDevExperience.html" rel="noopener noreferrer" target="_blank"> ‘a range of bespoke and tailored learning solutions’</a> including a variety of mixed media and skills courses, along with career coaching, mentors within the business, team development days, career planning and sponsored qualification support.Jenkins explains that: “Training and development opportunities are important because they provide incentive and reward for individual employees. People want to feel there is something in it for them, that they are growing, and there is purpose to their work as well. Doing transactional work isn’t enough for most people – they want more; they want to feel that they are adding value and that there is meaning in the work they do.”<h2>Create a sense of purpose</h2>Offering a competitive salary is an important way to attract top talent, however, creating a sense of purpose and autonomy is crucial when it comes to keeping employees engaged with their job.The Harvard Business Review documents that<a href="https://hbr.org/2018/11/9-out-of-10-people-are-willing-to-earn-less-money-to-do-more-meaningful-work" rel="noopener noreferrer" target="_blank"> 9 out of 10 employees</a> are willing to earn less money to do more meaningful work, while a survey by LinkedIn found<a href="https://www.linkedin.com/pulse/5-factors-influence-employees-more-than-money-gajendra-balasingam-/" rel="noopener noreferrer" target="_blank"> only 13 per cent of employees</a> want to switch jobs because they want more money.A healthy work-life balance is increasingly important for many employees, too, especially post-pandemic, as workers become accustomed to working from home.In fact, a recent<a href="https://www.ey.com/en_gl/news/2021/05/more-than-half-of-employees-globally-would-quit-their-jobs-if-not-provided-post-pandemic-flexibility-ey-survey-finds" rel="noopener noreferrer" target="_blank" style="font-size: 20px;">&nbsp;study</a>&nbsp;found that half of employees would consider leaving their jobs if they weren’t afforded ‘some sort of flexibility’ post-pandemic, and nine out of ten employees want flexibility around when and where they work.“Flexible work is huge,” says Jenkins. “It’s a baseline expectation and the new way of working. Increasingly, it’s more of a ‘hybrid’ model; rather than a work/ life balance it’s a harmony of the two, a merging rather than a separation. It’s something both parties will have to negotiate.”Davies adds that employers may find themselves facing “a hidden war on talent” following the hiatus caused by the pandemic, with workers increasingly weighing up their priorities when it comes to flexibility and purpose.“Salary still needs to be competitive and in line with the market rates, as does any incentive plans being offered, [but] we are seeing a wide range of employee benefits being offered.”The key is to identify what your employees value most – whether that’s flexibility, wellness programs, mental health days or monetised incentives like bonuses, says Davies.

Find out what motivates your employees.

How do you know what your employees value? Davies is clear: you have to ask them. “It is important to survey your staff and find out what will motivate them and what will make the workplace appeal to them in order to increase retention and employee satisfaction."&nbsp;<h2>Optimise your employee experience</h2>Regardless of your industry, a business is only ever as strong as its employees. The best thing you can do for your customer experience is optimise your employee experience, recommends Davies.“With the Great Resignation forecast in 2022, and worker shortages being experienced across many industries, employers need to be doing everything they can to retain employees and achieve high levels of employee retention.&nbsp;“We know [focusing on retention] boosts morale and also saves on recruitment and training costs,” she explains, while prioritising employee retention and employee engagement also affects reputation.&nbsp;&nbsp;&nbsp;“If a business has a high employee retention rate, it sends the message to top talent and employees that it’s a desirable place to work,” Davies explains. “While workplaces have endured plenty of challenges during COVID-19, they had stressors long before the pandemic, and they will face stressors long after. We can’t stop these things from occurring, but businesses can boost employee engagement and retention by helping them feel valued, heard, supported and resilient.”

Text Caption

Happy, productive employees make for a more profitable business and a more enjoyable workplace. Here's how to retain great employees

Learn top strategies about employee retention and how to ensure reduced staff turnover for your business.

Employee retention: strategies on how to retain staff

Employee retention: learn strategies that will retain your staff

How to retain employees: top tips for keeping employees engaged

Before you plan your promotional strategy for 2023, it's important to consider key dates - from major sales, such as Black Friday and Afterpay Day, to public holidays and events, from Valentine's Day to International Women's Day.&nbsp;We've created a free calendar featuring a range of 2023 key momenys. You can download it below:

Want to make the most of major 2023 shopping days like Afterpay Day?

Download Afterpay's free 2023 shopping calendar for retailers and marketers in New Zealand featuring key shopping dates, sale moments and holidays.