How Retailers Can Improve Their Top-Line Growth and Increase Profitability
Improving margins is harder than ever for retailers, and a lot of the problems around it come down to not fully understanding top-line growth and how to increase profitability.
This article will dive right into how retailers can improve their revenue while increasing profits. It will look at how different industries perform, how to get access to SKU-level data and how to gain a better understanding of costs.
Consider your industry
Having an awareness of past and current retail industry trends is critical when trying to increase revenue and profitability. This knowledge allows you to better understand which areas of Google Shopping would benefit the most from your attention. For example, around Summer, more people are searching for clothes like “denim shorts” and “wrap dresses”, so apparel retailers can set up the right campaigns to make these more visible to potential customers on Google Shopping.
The overwhelmingly significant shopping trend of 2020 was an increase in online sales — UK retail will make up one third of online sales by 2024. Some industries in particular experienced a boom in online orders during the COVID-19 pandemic. Let’s take a look at some of these trends:
- Online orders of household hardware increased by 212%, furniture by 17% and consumer electronics by 9%
- Internet shopping now accounts for 13% of all UK grocery sales (up from 7.4% in March 2020)
- And there were 41.1 million online apparel users in 2020. It’s been predicted that online shopping will reach a forecasted revenue growth of 4.6% in online fashion alone by 2022.
Utilising industry data
Looking at these kinds of statistics based on your own industry is key in forecasting upcoming trends that will occur. For example, with an increase in online fashion, apparel businesses may need to consider how to best utilise their ad campaign spend in order to compete with other retailers. Once you predict those trends, a platform like Upp can help you shape your Google Shopping campaigns to best serve your business objectives. Using this example, Upp would help you optimise your listings and ensure your campaigns are aligned with your revenue and profitability objectives..
Understanding where your industry sits in the ever-changing retail landscape will give your business an insightful head start towards growth and increased profits. Using past data on shopping will enable you to anticipate trends and consumer patterns. Ultimately, this will help you improve profit margins and allow you to confidently manage your Google Shopping campaigns.
Understand your costs
While top line growth is, of course, important, costs can impact your overall profitability. Understanding your costs at product level makes all the difference when it comes to increasing profitability as a whole.
Both fixed and variable costs can be difficult to gather but it’s critical that you know what your costs are and how they fluctuate based on different circumstances, such as seasonality. In the current, unprecedented environment where stability is hard to come by, this is ever more crucial.
For example, identifying where your ad spend isn’t bringing in the right return enables you to channel your budget into more profitable campaigns. Having a complete picture of your costs will propel you to make transformative adjustments, each of which can increase profitability.
Gathering these costs, though, isn’t always easy, especially manually. In fact, channels like Google Shopping don’t even provide you access to this data when analysing your campaign performance. This is where a platform like Upp can come in — a solution that shows you SKU-level data. That way, you’ll learn which products are actually in negative margin. Upp can help provide you with the insights to fix the problem, increase the profitability of each product and improve the revenue of your business as a whole.
Gain a full picture of your retail ecosystem
Increasing your overall profitability requires you to understand the whole retail ecosystem of your business, not just top line growth. This is all about looking at your revenue, costs and margins as a whole company rather than only focusing on your department’s key metrics. This ensures that your business is able to meet your overarching objectives by each team chasing the same goal: profitability.
That’s a big feat but an intelligent and automated platform like Upp can help.
How Upp delivers a complete picture of your business:
Upp automatically pulls in all of your costs — both fixed and variable, including revenue, the cost of goods, return rates and stock levels. This can determine if your profit is compromised by inefficient outgoings.
- SKU Level Performance
Upp monitors SKU level performance, meaning it will automatically structure campaigns and bids to ensure every SKU is achieving optimal performance. This also helps maximise digital spend in order to improve overall profitability.
- Control and Visibility
Upp allows retailers to maintain complete control and visibility of their data. The easy-to-use platform makes setting up and monitoring targets quick and simple, and ensures businesses gain 100% visibility of their overall performance.
Reap the benefits of upgraded top-line growth and profitability
Using a platform like Upp frees a business to make decisions they can be confident in, from stocking to ad spending. Having automated access to previous shopping data and all business costs provides companies with a complete and informative picture of their business.
Profit is harder than ever for retailers to achieve in such a temperamental climate — the online shopping market is currently growing at a rate of 6.7%, meaning it’s even harder to compete. It’s never been more important for businesses to have the assistance of a solution that makes top-line growth and increased profitability a reachable goal.
Thankfully, Upp is here to upgrade online retail presence, improve top-line growth and increase profitability even in such a competitive retail landscape.
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