Retail is the largest private sector in the world, representing $6.6 billion worldwide. To rise above the vast competition, retailers must have well-trained staff, provide an exceptional customer experience, and continually monitor evolving customer preferences and behaviors. Knowledge management in retail can help provide that competitive edge.
With appropriate knowledge management in retail, leaders can better train staff, more efficiently organize learning and training resources, and provide accurate and up-to-date information to employees and decision-makers. Using a knowledge management platform, retail businesses can centralize and democratize knowledge, making it available across their corporate offices, contact centers, and stores so that everyone has access to the same up-to-date information. In this article, we’ll explore why knowledge management is critical and how to successfully apply knowledge management in the retail industry.
Knowledge Management Processes in the Retail Industry
To understand the role of knowledge management in retail, it’s critical to first understand how knowledge is acquired, converted, and applied in the industry.
This process involves collecting information that’s necessary to operate a successful retail business. This generally involves two main types of knowledge:
- Explicit knowledge: This type of knowledge is easy to articulate, write down, and share. In retail, this could include product specs or instructions, processes for returns, or troubleshooting instructions. The acquisition of this type of knowledge usually happens during initial onboarding or ongoing training.
- Tacit knowledge: This type of knowledge is acquired through personal experience and context. For example, your company may have documented guidelines for customer interactions, but employees will, over time, learn how to use certain body language and phrases to engage guests.
In this process, knowledge collected from many sources is converted into organizational knowledge and made accessible to the employees and decision-makers that need to use it. This is where a knowledge management platform comes into play.
This process centers on taking the information that’s available and applying it in retail operations, such as answering customer questions, planning products, or optimizing the shopping experience.
How Does Knowledge Management Help the Retail Industry?
Knowledge management can give retail businesses a competitive edge by helping companies provide better training and better meet their customers’ needs. Benefits include:
- Streamlined staff training: In the U.S. the turnover rate for all industries is around 19%, while the turnover rate in the retail industry is above 60%. With so many employees coming and going so frequently, it’s essential to have well-organized training resources available to create a smoother onboarding experience. Making those resources available on demand can also help your workforce stay up to date on new processes. Ultimately, a central knowledge management system can help cut down on training time, so employees can quickly get up to speed and begin fulfilling their roles on the sales floor.
- Central source of customer insights: Retail businesses must constantly evolve to meet consumer needs and preferences. By collecting customer insights into a central knowledge management platform and making that customer insights solution available to decision-makers across departments, you can equip everyone within your company to make informed decisions about future products and offerings.
- Up-to-date product knowledge: A knowledge management platform can give sales and customer service teams a trusted source of up-to-date product knowledge. With that information at their fingertips, these teams can quickly and completely address customer issues—ultimately contributing to a better overall customer experience.
- Continually expanding source of knowledge: A knowledge management platform isn’t intended to be static. The beauty of knowledge management in retail is that you can continually add to that knowledge base over time with both institutional and individual knowledge. This enables your organization to constantly grow and evolve as you collect new information, rather than relying on outdated knowledge.
Knowledge Management Challenges in the Retail Environment
While the benefits of knowledge management in retail are clear, there are challenges to putting an effective system in place. Key challenges include:
- Effective use of technology: Technology has completely reshaped the retail industry, from e-commerce platforms to augmented reality try-ons. However, technology is only beneficial if employees and customers use it. An effective knowledge management platform must be intuitive and easy to use.
- Converting information into knowledge: Information can exist in many different formats and in many disparate locations, from training videos to product sheets. To effectively turn information into knowledge, you must collect it in a central location and make it easily accessible to everyone in your business. Only then can they take that information and apply it.
- Tracking knowledge management success: Implementing a knowledge management platform is only the first step. You must then measure its success by looking at metrics such as employee buy-in, engagement, and performance.
- Consistency of knowledge management initiatives: Especially if your retail business has multiple locations, it can become difficult to maintain consistency in knowledge management initiatives. Employees at all levels and locations should understand how to use the platform to both acquire information and contribute to the company’s collective knowledge.
A comprehensive knowledge management platform, combined with change management efforts, can equip your retail business to rise above the competition. Through a knowledge management platform like Bloomfire, you can both centralize the collective knowledge of your employees and equip those employees to provide a better customer experience.