8 Ways Retail Stores Can Cut Running Costs



Running a retail store calls for a strict check on operating costs. Without doing so, you might find it difficult to monitor and measure your profits or determine where you may be making unnecessary expenditures. And though many running costs for a business are inevitable – utilities, maintenance, salaries, benefits, advertising, etc. – there are ways to manage and cut back some of these costs.

Today, let’s look at 8 ways that retail businesses can cut running costs. Doing so will help improve your profitability and allow your business to scale.

an infographic on how to cut running costs

1. Outsource Remote Services

You don’t need to hire full-time employees to take care of every task at your retail store. Take these tasks for example: 

  • Social media management 
  • Product research 
  • Website maintenance 
  • Answering calls 
  • Email management 
  • Accounting 
  • Advertising
  • Design work

You can outsource remote workers to handle tasks like these. Businesses can use these services as needed and on a part-time basis. This way, you won’t have to pay full salaries and additional employee benefits.

Additionally, outsourcing remote part-time work will save on retail space costs. It’s costly to host in-person staff at a physical location. And while most retail stores will require on-site staff, there are some positions that can certainly be done remotely. Fewer in-person employees means less rental/mortgage and maintenance costs.

2. Go Paperless 

With the advanced technology that businesses are lucky to have these days, there are plenty of business processes that can now go completely digital—for instance, record keeping. You no longer have to keep hard copies of all your receipts, employee details, payrolls, bank statements, operational expenses, etc.  

Paperwork is slow and takes up precious space. File cabinets, drawers, and messy desk areas are a hassle, too. Going paperless will increase your space efficiency and also help your feng shui.

Plus, the risk of loss is imminent. Any disgruntled person with access to your files may walk away with critical documents. Also, disasters like fire or heavy storms will likely ruin any paper documents kept on-site. And as if that’s not enough, replacing the lost files will eat up more of your budget, too.

Relying on paper documents will also increase your business’s environmental impact. While there are MANY areas that businesses can target to reduce their carbon footprint, cutting back on paper will certainly help.

And if you needed any more convincing, remember that printers really suck. They’re expensive and constantly malfunction. While you’re at it, you can also eliminate fax machines by using online fax services.

To cut back on paper use, the most popular solution for businesses is cloud storage. There are plenty of cloud platforms that’ll allow you to store documents for free, up to a certain capacity. Even having to add paid storage is cost-effective. Most plans suitable for businesses are under $100/month.

3. Automate Processes

You can take the cost-saving measure even further by taking steps to automate your business processes. Below are a few examples of tasks you can automate: 

Online customer support

Instead of employing a customer support agent, consider using an AI-inspired chatbot to handle initial customer queries. This will help you program answers to the most commonly asked questions from your customers. You can save live customer support services for customers that require further personal assistance. This is particularly applicable for eCommerce businesses, but brick-and-mortar retailers can also outsource customer support by hiring third-party call centers.


Some marketing tasks are recurring. For example, sending survey emails, birthday greetings, welcome emails, requests for feedback, and promotions. With the proper business software, you can program these to automatically complete tasks according to the customer’s current position in your marketing funnel.

Inventory management

Gone are the days when you have to manually record and track every product in your store into their respective books. There are now inventory management tools that can significantly reduce human input in tracking goods across the supply chain. You can make use of these tools to save both time and money.

4. Try eCommerce 

Consumers have very much embraced online shopping. Even if you operate a physical store, they’ll usually want to compare your products online before visiting the store. Moreover, a lot of retail businesses with brick-and-mortar shops have either added an eCommerce site or switched completely, closing their physical stores and replacing them with an online store.

If you decide to continue operating both stores, try to compare your online sales with the in-person sales. If your online store outperforms the physical one, you can then choose to focus on the virtual shop. You can downsize your physical store and perhaps use the extra savings to invest more in your online store. And if the demand forecast for your online store gives you enough confidence, you can choose to completely close your brick-and-mortar stores and just keep the storage space for your products.

Operating online commerce is easier than ever. Check out our guide to building an online shop in 2021.

5. Work On Customer And Employee Retention 

Hiring new staff requires a lot of resources, and if you have a high employee turnover rate, it can be costly. First of all, you have to advertise the vacant position. Then you have to interview applicants. And finally, you have to onboard and train them. The entire process costs time and money. 

Ideally, you want to keep the employees you have. Try the following tips: 

  • Set up every employee for success right from the start. In other words, don’t hire half-heartedly with the thought that you can always hire a new one if they don’t work out.
  • Pair new employees with experienced ones for mentorship.
  • Boost employee morale through perks like paid leaves and incentives.
  • Make them feel welcome through effective communication.
  • Hold frequent meetings to ensure all employees are working towards one goal.
  • Invest in training and development.
  • Reward outstanding staff.
  • Promote good work-life balance.
  • Add valuable benefits and perks.

Similarly, it would help if you can make an effort to retain your current customers. Loyal customers bring regular sales and as well as word of mouth marketing, benefiting your business twofold. Here are helpful tips for customer retention: 

  • Ship out ordered goods on time.
  • Reward loyal customers with discounts.
  • Always be responsive.
  • Promptly address all complaints.
  • Connect with them on social media.
  • Make them feel valued.

6. Minimize Paid Subscriptions

Modern businesses require a variety of tools to effectively manage their processes:

  • Email management software 
  • Customer relationship management (CRM) system 
  • Social media management tools 
  • SEO (search engine optimization) tools 
  • Project management software 
  • Cloud storage platform 
  • Video conferencing tools 
  • Graphic design software 

While most of these may be critical for your business operations, you might be able to trim the fat in certain areas. Non-essential monthly payments can add up to more than you can handle. As an alternative, use free versions of the tools that you don’t use a lot. If the features in the non-paid versions are enough for your business necessities, you can save yourself the trouble of paying monthly subscription fees. 

7. Reduce Energy Consumption 

Electricity is quickly becoming more expensive. If you own your business premises, think of installing solar panels. The initial investment may be high, but you’ll save significantly in the long run.

If you must continue using grid electricity, try to stick to electrical appliances with high-energy ratings. These consume lesser power by design, which can give you considerable savings on electricity bills. For bulbs, get rid of the regular ones if you still have them. Replace them with LEDs, which consume up to 75% less energy than incandescent bulbs.

8. Pack And Ship Wisely 

To reduce shipping costs, reconsider your packaging system. Fitting your products in smaller but sturdier packaging materials can help you cut down costs while also reducing waste. You can also reuse packaging materials from your suppliers. However, make sure you’re not compromising too much. You don’t want your products to be more prone to damages while in transit. 

You can also negotiate with your shipping partner to get cheaper prices especially if you ship in bulk.

Bottom Line for Cutting Running Costs in Retail 

It’s possible to cut the running costs of your retail store without compromising the quality of your products and services. Try applying these 8 suggestions to get started and see how it affects your margins and success.

One area that will help streamline operations and reduce a chunk of your operating costs is your retail POS. To learn more, click below. You can set up your own trial account and set up a demo with a product specialist. 

About the Author

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Michael Chalberg

Michael has long focused his writing on the world of retail and small businesses. He''s been a part of the KORONA POS team since 2018 and loves helping entrepreneurs find ways to adapt and succeed. In his spare time, you'll likely find him hiking somewhere in the Southwest.