Coming out of Covid, and now a possible recession — starting a retail business has never been this difficult.
With high overhead costs, an ever-changing consumer landscape, and an increasingly competitive market entrepreneurs need to think long and hard about the steps they’ll need to take to make their retail business successful. And that’s no small feat!
Per the U.S. Bureau of Labor Statistics “approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years.”
What specific steps must budding entrepreneurs take to ensure that their retail business will survive and thrive through the difficult first few years?
Table of Contents
- Research First, Then Create a Market Plan
- Price Right
- Create an Unbeatable Customer Experience
- Vet the Vendors Beforehand
- Test, Test, Test
- Focus on Creating a Digital Presence
- Invest in the Right Technology
- Expand Payment Options
- Strategize Shipping
- Analyse Data
- Measure the ROI of Your Effort
- Reinvent Yourself
1. Research First, Then Create a Market Plan
Brand market research is crucial for any new business. It helps to gain a comprehensive understanding of the existing market, the competition, and what products or services customers want and need.
With brand market research, you can develop a targeted, efficient and cost-effective marketing plan. For example, if you run an apparel business, you need to know the latest fashion trends and what customers are looking for in terms of quality, price, and design.
Another key aspect of brand market research is understanding your target audience. This will help you create a marketing strategy with a single distinctive message that resonates with them.
Before starting your business, make sure to research the industry and competition. Understand the ins and outs of the industry and what you need to do to carve out a niche for yourself. From there, create a marketing plan that focuses on differentiating your business from the competition and making sure your message reaches the right people.
2. Price Right
Now that you have a clear idea of your target market, you need to develop a pricing model that properly balances cost, profit, and value for customers.
Also, make sure to factor in the cost of shipping, taxes, and any additional fees.
Popular pricing models in the retail industry are price skimming, penetration pricing, and price bundling.
3. Create an Unbeatable Customer Experience
Creating a stellar customer experience will be instrumental in the success of your retail business.
Your focus should be on providing an experience that is smooth, easy, and engaging.
Make sure that your website is easy to navigate, and opt to have free shipping on orders over a certain amount to incentivize customers.
It is also important to provide excellent customer service, establish a return policy, and innovate to reduce customer wait time and make the entire process of shopping more efficient.
4. Vet the Vendors Beforehand
Choosing a reliable vendor to source products and materials is key to running a successful retail business.
The vendor should provide quality products and services and should be willing to offer competitive rates.
Also, make sure the company has a good track record, industry reputation, and experience.
5. Test, Test, Test
Initially, there’s a lack of clarity on how customers will respond to your product. That’s where testing comes in.
The best way to gain insights is to test your product or service in the market and see the response firsthand. You can analyze the feedback from customers and make necessary changes to your offering. Some ideas include opening a pop-up store, adding web push notifications to your website, running targeted campaigns, or selling through an online store.
6. Focus on Creating a Digital Presence
Half your battle is won if you have a strong digital presence.
Make sure to have a website, and social media accounts, as this is a surefire way to reach out to customers, stay in their consciousness, and foster brand loyalty.
It is also important to join relevant groups, establish relationships, and create content that resonates with your target market.
Some ideas include developing entertaining videos, engaging stories, or visuals that evoke emotions.
Or even run exciting promotions and contests to drive awareness.
7. Invest in the Right Technology
Investing in the right technology and software can save businesses time and money.
Some software solutions that are especially beneficial to retail businesses include point of sale (POS) systems, inventory management systems, and customer relationship management systems.
Having these systems in place will help automate tasks, free up resources, and maximize efficiency.
8. Expand Payment Options
More the payment options, the better the sales.
In today’s day and age, customers want to be able to use multiple payment methods to buy goods and services.
To meet customer demands, it is important to offer multiple payment options such as credit cards, debit cards, PayPal, Apple Pay, and even cryptocurrencies. BNPL or Buy Now Pay Later too, is widely used by retailers.
9. Strategize Shipping
Shipping is like the last mile of retail.
Hence, it is important to choose a reliable and efficient shipping option to ensure that customers receive orders in a timely manner.
Also, running promotions, offering discounts on shipping, or even partnering with a delivery service can help significantly reduce the cost of shipping boosting customer loyalty.
10. Analyse Data
Data analysis is a key component of any successful retail business.
By tracking customer data and utilizing analytical tools, such as heat maps and customer journey analysis, it is possible to gain valuable insights into customer behavior.
This information can then be used to better understand customer needs and trends and help develop efficient strategies for running and growing the business.
11. Measure the ROI of Your Effort
No one likes investing their hard-earned money for nothing.
It is vital to measure the return on investment (ROI) of each strategy to understand which marketing channels, campaigns, and tactics are most profitable
Investing some time and effort into tracking the performance of various campaigns and budgets will give you a clear indication of what works and what could be improved upon.
12. Reinvent Yourself
To stay ahead of the competition, it is important to frequently reinvent your business.
This could be in the form of launching new products or services, experimenting with new marketing channels or updating website designs
A willingness to innovate, reinvent, and stay ahead of the curve will help businesses establish greater customer loyalty and stay competitive in the highly crowded retail space.
Conclusion
The secret sauce to excelling in retail is to always think about the customer first. To do this, create customer-centric experiences, be responsive to customer feedback, use technology to your advantage, and look for ways to differentiate yourself from the competition.
Offer competitive prices, forge strong relationships with vendors and customers, and invest in the right technologies and data analytics to stay ahead of the curve.
Keeping up with the latest trends in the industry and being able to adapt to the ever-changing market can also help a retail business excel and succeed in the long run.
Sure, it can be challenging at first, but with the right strategy and effort, you can create a retail business that is dynamic, innovative, and unbeatable.
If you enjoyed this article, next check out 15 Tips to Build Confidence in Business or How to Scale Your Business with Jeff Hoffman.
