Experience in managing retail chains: An A-Z guide to effective retail operations strategies.

Managing a chain of stores is not simply about replicating a business model, but rather about synchronizing and controlling the operational system as it expands. The more branches there are, the greater the risk of discrepancies between processes such as procurement, inventory, sales, or finance if there is no well-structured retail chain management system.

According to Planet Retail RNG, losses in retail operations can erode profit margins by up to 21% if businesses lack a robust management system. This is also why many chains experience "false profits but real losses." In this article, 1C Vietnam will share experiences in managing retail chains across various operational areas, helping businesses build effective and sustainable operational strategies as they expand.

1. Practical retail chain management experience based on 5 core business groups.

To avoid the situation of "false profits but real losses," businesses need to control each operational aspect of the chain instead of dealing with individual problems. Below are practical chain store management experiences compiled from the operation of a chain, helping you clearly identify problems and control them from the root.

1.1 Procurement Management: Controlling Cost of Goods Sold and Suppliers

In chain store management, the procurement process is not simply about importing goods, but about optimizing the Cost of Goods Sold (COGS). If this process is lax, businesses are losing their competitive advantage even before products hit the shelves.

The real problem: Import prices are out of control and dependent on suppliers.

• Fluctuating import prices: Businesses lack a system for tracking price history, leading to passive acceptance of new prices from suppliers without a basis for negotiation or finding alternative sources.
• Confusion and duplication of SKU codes: The same item may have different codes assigned to different branches, or one SKU code may represent multiple different packaging options. This leads to incorrect orders, such as ordering too much of one code while missing another.
• Supplier delays: The lack of performance tracking metrics for suppliers frequently leads to supply chain disruptions at the point of sale, causing business interruptions and loss of customers to competitors.
• Overspending: Due to a lack of control over planned procurement limits, the purchasing department can easily fall into the trap of over-ordering or making impulsive purchases, directly putting pressure on the company's cash flow.

Practical experience: Standardizing the goods procurement process.

• Create a consistent SKU coding system: Businesses need to Establish a unique system of product naming and coding rules for the entire system. Standardizing SKUs helps the purchasing department accurately track actual inventory levels at all branches, completely eliminating incorrect or duplicate orders.
• Real-time order planning and status tracking: Digitize the entire process from order placement to warehouse arrival. Tracking the approval status of supplier orders and delivery orders in real time helps businesses proactively manage inventory and ensure shelves are always fully stocked.
• Conduct regular supplier evaluations: Establish a set of metrics based on real-world data regarding price stability, defect rates, and delivery times. This allows businesses to easily screen partners and prioritize reputable suppliers.
• Purchasing management by quotas: Control inventory based on business forecasts and approved budgets. Set up an automated system to alert or block orders exceeding quotas, helping to protect cash flow.

Example scenario: Optimizing cost of goods sold through digitizing incoming goods data.

Previously, there was a 5% price difference between branches due to a lack of centralized reconciliation data. After standardizing SKU codes and price history, the company successfully negotiated an additional 3% total discount, saving billions of dong in inventory each year.

Insights from 1C Vietnam's digital transformation expert:

The profitability of a retail business is essentially determined at the moment of ordering. Without tight control over procurement data, SKU catalogs, and supplier capabilities, any subsequent efforts to manage the chain of stores will only serve to compensate for systemic discrepancies in the input stage.

1.2 Warehouse Management: Coordinating and optimizing inventory across the entire supply chain

In supply chain management, a warehouse is not just a place to store goods, but also a place that determines the speed of capital turnover.

The real problem: Virtual inventory and the risk of loss.

• Excess goods in one place, shortages in another: Due to a lack of interconnected data, branch A runs out of stock while branch B has excess inventory.
• Slow processing of near-expired and expired goods: Failure to promptly monitor expiration dates leads to situations where expired goods are only discovered later, resulting in direct cost losses.
• Slow transfers between sales points: The manual transfer proposal and approval process causes goods to take a long time to circulate, failing to meet market demand in a timely manner.
• Manual inventory is prone to errors: Using disjointed ledgers or Excel spreadsheets for periodic inventory checks often leads to discrepancies with actual figures, making it difficult to forecast incoming goods.

Practical experience: Digitizing warehouse management processes.

1. Determine maximum and minimum inventory levels: Set inventory limits for each SKU at each branch. The system will automatically issue alerts when inventory reaches the minimum level to allow for timely restocking, or when it exceeds the maximum level to temporarily halt restocking, preventing capital tie-up.
2. Batch and expiry date control: Detailed inventory management by batch number and expiry date (FEFO - First-in, first-out). The system automatically lists items nearing their expiry date, allowing the sales department to promptly promote or reallocate them.
3. Automate internal transfer processes: Build a transfer approval mechanism directly within the software based on real-time inventory data between sales points. This helps shorten the goods turnover time from several days to just a few hours.
4. Automated multi-point inventory and reconciliation: Replaces manual record-keeping with barcode scanners integrated with software. Inventory data is updated and reconciled directly with system balances, enabling immediate and transparent discrepancy resolution.

Example scenario: "Rescuing" inventory through interconnected data.

When the system indicated that a batch of milk at branch A had only two months left until its expiration date but sales were slow, the manager immediately redirected it to branch B – where demand was high. All the stock was sold within two weeks, helping to reduce the overall product spoilage rate across the chain to below 0.5%.

Insights from 1C Vietnam's digital transformation expert:

Effective warehouse management hinges on turnover speed. An efficient warehousing system is one where a business can get goods to where they are most likely to be consumed quickly, instead of letting capital sit idle on shelves and facing the risk of product spoilage.

1.3 Sales Management: Standardizing the Sales Process

At the point of sale (POS), even the smallest mistakes directly impact brand reputation, cash flow, and the efficiency of chain store management.

The real problem: Barriers at the checkout counter.

• POS systems freeze during peak hours: POS machines process transactions slowly or lose connection when there is a sudden surge in orders, causing congestion and forcing staff to manually calculate prices, leading to errors in payment processing.
• Overlapping promotions are prone to errors: Discount and gift programs are set up in a way that overlaps. Too many simultaneous offers on a single order can confuse cashiers, leading to under-application or incorrect discount rates .
• Cash discrepancies at the end of the sales shift: A lax cash reconciliation process creates loopholes for fraud or discrepancies in the actual balance between the cash and the system invoice without a clear reason.
• Slow shift-based revenue updates: Chain owners cannot track real-time business figures to promptly adjust sales plans or respond to daily fluctuations.

Practical experience: Standardizing sales processes at the point of sale.

• Offline POS and Backup Network: Use sales support software even when the internet connection is lost. Data will automatically synchronize when the network is restored, ensuring uninterrupted customer service and invoice printing.
• Automated promotional program implementation: Pre-set priority rules for complex promotion scenarios. Set up an automated system to calculate the total discount when multiple methods are applied simultaneously (vouchers, direct discounts, loyalty points), helping cashiers work faster and more accurately.
• Track performance and revenue per shift and sales point: Connect POS machine data to the central system in real-time. Business owners can monitor sales and employee performance anytime, anywhere via the administration dashboard.
• Tighten the automated shift closing process: Employees must declare their actual cash balance before the system generates reconciliation reports. All invoice modifications/cancellations are logged and require management approval to ensure transparency in cash flow.

Example scenario: A chain of stores used to take over 3 minutes to process a bill with 3 overlapping promotions (category discounts, birthday vouchers, and membership points deductions). After automating promotions, checkout time was reduced to under 1 minute, allowing the store to serve 30% more customers during peak hours without any price complaints.

Insight from 1C Vietnam experts:

The point of sale is the most crucial link in converting goods into revenue. A smooth POS process not only retains customers but also ensures that all previous operational efforts are fully converted into profit.

1.4 Financial Management: Centralized Cash Flow Control

Good financial management helps businesses control the "health" of their cash flow for safe reinvestment.

The real problem: The "bottlenecks" in cash flow management.

• Concerns about errors in tax filing: Manually compiling invoices and sales data from multiple branches can easily lead to inaccuracies, resulting in legal risks and financial losses for businesses.
• Difficulty in tracking accounts payable: Supplier or customer debts are scattered, not promptly reported, causing bottlenecks in working capital flow and affecting reputation with partners.
• Incorrect revenue reconciliation: Matching data between cash, bank transfers, e-wallets, and revenue on the system is too time-consuming, prone to errors, and slows down the closing process.
• Delayed consolidated reports: Chain owners often have to wait until the end of the month to get a complete financial picture, leading to business decisions that lag behind the market.

Practical experience: Digitalization for financial transparency

• Automatic electronic invoice issuance (e-Invoice): Directly connect the POS system with the electronic invoice provider. As soon as the transaction is complete, the invoice is issued and the data is accurately synchronized with the Tax authorities, completely eliminating manual data entry and data errors.
• Accounts Reconciliation & Payment Deadlines: Establish a centralized management system that automatically alerts you to upcoming due dates. This helps the finance department proactively plan cash flow and optimize working capital.
• Cost of goods sold and revenue accounting in real time: Apply an automated accounting mechanism as soon as a purchase/sale transaction occurs. This ensures that accounting data always matches the actual operations at each point of sale in real time.
• Intuitive management reporting system: Build an automated dashboard that summarizes revenue, costs, and profits across the entire chain, helping business owners make decisions based on fresh, daily data.

Example scenario: Shortening the closing time and increasing data transparency.

Thanks to automated electronic invoice generation and reconciliation after each transaction, a retail chain has shortened its financial reporting time from 10 days to just 2 days per month. All errors in tax declarations have been completely eliminated, helping the business optimize operating costs and maintain stable growth.

Insights from 1C Vietnam's digital transformation expert:

Finance is the most accurate measure of operational health. Effective financial management helps business owners see the realistic profit picture, giving them the confidence to drive growth targets.

1.5 Marketing Management: Personalizing the Customer Experience

A modern chain store management strategy cannot function without the support of marketing data to retain customers. Effective marketing helps businesses not only attract new customers but also optimize value from existing customers, driving sustainable revenue growth.

The practical problem:

• Customer data is fragmented: Customer information at each branch is scattered, preventing chain owners from having a comprehensive view of the customer profile across the entire system.
• Difficulty in measuring campaign effectiveness: Lack of tools to track conversion rates from advertising campaigns leads to wasted marketing budget on channels that don't generate sales.
• Customer retention is difficult: The lack of automated and personalized customer care systems makes it easy for customers to abandon the brand after their first purchase.
• Mistargeted promotional offers: Applying mass-market programs instead of targeting specific needs results in high promotional costs but disproportionately low sales.

Practical experience: A data-driven approach

• Centralized Customer Relationship Management (CRM): Organize all customer information (name, phone number, purchase history, preferences) from all points of sale into a single system.
• Real-time campaign measurement: Set up an automated system to record revenue for each campaign source (via vouchers, QR codes, or unique promotional codes). Business owners can instantly monitor performance charts on the dashboard to make timely budget adjustments to the most effective channels.
• Personalized customer service offers: Based on centralized data, categorize customers (membership level, purchase frequency) and send personalized offers or birthday gifts via SMS/App. Providing the right service at the right time increases conversion rates and customer loyalty.
• Omnichannel experience: Ensures customers enjoy consistent benefits (points accumulation, rewards redemption) whether purchasing in-store or online. Data is updated instantly across the entire system, providing maximum convenience for customers.

Example scenario: Increase customer return rates using CRM data.

After using CRM to categorize and send personalized offers to customers who haven't returned in 3 months, the return rate of customers at a retail chain increased by 25%, while marketing costs decreased by 15% compared to the previous method of sending out offers to 100% of customers.

Expert opinion from 1C Vietnam:

Effective marketing uses data to understand the right people, giving them the right product at the right time when they are most likely to buy.

2. Elevate your retail chain management with 1C:Retail Chain software.

To effectively apply management practices tailored to each operational group, businesses need a robust system to connect and synchronize the entire retail chain. This is why retail chains today prioritize the use of specialized store chain management software , rather than separate tools.

1C: Retail Chain 1C Vietnam is a specialized sales management software for retail chains and multi-point-of-sale stores, designed to centrally manage and control all retail chain operations within a single system. The software helps retail chain businesses manage their multi-point-of-sale stores centrally with key features:

• Centralized multi-point-of-sale management: Monitor all chain operations by store, region, or business model.
• Real-time data synchronization: Data is interconnected across the entire system, from Point of Sale (POS) - Warehouse - Accounting - Purchasing. As soon as an order is completed, the warehouse automatically deducts the inventory, the accounting department records the revenue, and the purchasing department immediately understands the inventory needs.
• Automated Electronic Invoice Generation & Tax Accounting: Integrating e-Invoice at POS terminals allows for instant invoice creation and accounting upon transaction occurrence. The software supports automatic invoice generation through reputable providers such as MInvoice, Viettel, Easy Invoice, etc.
• Flexible promotional program management: Apply multiple promotions simultaneously to a single order, exclude them based on conditions, and implement them synchronously across the entire chain.
• Inventory control & discrepancy alerts: Real-time inventory tracking, near-expiry date alerts, and discrepancy detection.
• Multidimensional management reporting: Statistical analysis of sales data by store, region, product, role, etc., with personalized display interface based on management needs and roles.

👉 Explore 1C:Retail Chain is a specialized sales management software for retail chains. Leave your information to receive advice on a chain store management solution that suits your business.