How many times has a shop assistant said to you “Sorry, we’re out of stock”?
My guess is: quite a few! It’s a phrase that can take the wind out of a weekend shopping adventure, but it happens all too often. Absent stock is frustrating for the customer and not a great look for the retailer.
When faced with this situation, I’m only too happy to shop elsewhere – even if it’s more expensive.
While running out of a product is sometimes unavoidable, more often than not it’s the result of a poorly-designed back of house.
It could be that there’s not enough storage space to maintain sufficient inventory levels, or perhaps cramped conditions and poor organisation have led to oversights that allow inventory levels to drop below a critical point.
Regardless, it stems from a single problem: too little thought and not enough planning when it comes to back of house design.
It’s understandable – retailers in the process of designing a new shop fit-out have their creative energies focused on the look and feel of the front of house. After all, front of house is the brand, the style, the message.
However, when it comes to actually operating the store, day-to-day, it’s these back of house design considerations that play a subtle, but critical role in ensuring the success of your business.
That’s why we want to introduce you to the top 3 reasons your back of house design can make or break your retail success.
1. It reduces overheads, avoids lost sales & builds brand loyalty
Customers greatly dislike it when their desired item is out of stock. According to a 2015 survey of 1,000 shoppers, 86% reported experiencing a stock-out within the past year, with one third experiencing it frequently. When it happens, 63% reported that they gave their purchases to a competitor or did not buy at all.
A disgruntled customer is something you want to avoid – especially for new retailers fighting to build brand loyalty, as it requires 10x the marketing spend to recruit first-time shoppers over maintaining established customers.
And it’s not just stock-outs that are a problem. Whenever a shop assistant leaves the showroom floor to check for stock, some customers simply leave while your sales assistant is rummaging out the back, leading to missed sales opportunities.
Therefore, it’s important to ensure that you have adequate space available in the back of house to keep everything organised, visible and quickly accessible. This has the additional benefit of making it easier to keep abreast of when stock levels are running low, and it prevents damage to items by making sure they’re stored safely, accurately and up off the ground.
An optimised back of house can also reduce the costs of off-site storage and transport costs, by allowing more stock to be stored on premises, reducing replenishment frequency.
And, naturally, maximising your back of house efficiency will minimise the amount of space you’ll need to allocate to it, leaving as much room as possible for your front of house displays.
2. It improves staff productivity & morale
Ideally, your sales associates would spend as little time away from the retail floor (and any waiting customers) as possible. When your back of house is tidy, well-organised and with stock highly visible and accessible, their dwell time is minimised, letting them get back to the business of selling.
However, that’s not the only thing. The configuration of your back of house can have a profound effect on your staff’s happiness. A cramped, messy environment is both extremely frustrating and presents OH&S hazards, especially if staff are required to lift or reach awkwardly.
Like a stone in your sock, these frustrations erode staff morale over time, costing you in productivity and increased staff turnover.
After all, happy staff means happy customers and a better looking bottom line.
3. It’s the nerve centre of your retail operation
Well-planned, your back of house has the potential to be the nerve centre of your retail operation – a real asset that ensures your business runs smoothly. Poorly planned, and every inefficiency will be magnified, leading to enormous amounts of time wasted searching frantically among the chaos for a product that might not even be there.
Also, your back of house shouldn’t just be a store room. Ideally, it will also provide a reasonably-sized receiving area where new stock can be unpacked, priced and sorted quickly. You will also need a small (and hopefully quiet) office space for placing orders, making phone calls and private discussions with staff and vendors.
Lastly, your back room needn’t be a backwater, so make sure it doesn’t look like one. Attention to detail, like installing attractive lighting and the inclusion of interior design features will promote a happier working environment and encourage a higher level of dedication from your staff.
How do I ensure my retail back of house is up to scratch?
Now, that’s all well and good, you may say; but, space is limited – and expensive; so, what’s the best way to achieve this back-of-house nirvana?
The task: To create enough storage space for all your inventory and operational needs, while minimising its footprint in order to leave as much space as possible for your front of house showroom.
Since the largest component of a retail back of house is reserved for storing inventory, it’s here that prioritising space efficiency will make the biggest difference. Depending on the shelving solution you choose, you could increase your stock capacity by up to 30% over less efficient solutions.
Do your storage needs change at different times of the year? If so, you’ll want to make sure your chosen solution has the flexibility to be reconfigured easily as different product types come into season.
There’s a lot to consider, which is why it’s a wise move to consult the experts.
Bowen Storage – the back of house storage experts
Bowen Storage is Australia’s leading retail storage specialist, with over 30 years’ experience in the field. They provide bespoke retail storage solutions utilising state-of-the-art retail shelving.
However, this task comes down to more than just choosing the right shelving product – there are many factors to consider, many of which touch on your business’s specific needs. It’s a science in itself – which is why Bowen Storage frequently lends its back-of-house design expertise in collaboration with the front-of-house shop-fitter in delivering retail solutions that offer the best of both worlds.
Bowen Storage offers a complete, end-to-end design and fit-out service for your retail back of house, taking on the task at an early stage to ensure a truly optimal shop configuration that will maximise the sales performance of your retail store.
Make your back of house a primary consideration
When the back of house is neglected, it’s likely to become a miserable sore spot that raises your overheads, diminishes profits, and sucks the enthusiasm out of both you and your staff.
Well designed, on the other hand, it can be the perfect ‘mission control’ to your finely-tuned retail machine, making it easy for you to stay on top of stock levels, for your sales staff to locate items quickly and safely, and, ultimately, for your team’s morale to soar like you know it could.
Getting your back of house right is the key to retail success. And, with Bowen Storage, that is exactly what you’ll get.
National Retail Solutions Manager