We have all started to believe that retail businesses will die a slow death soon with Amazon playing the killer. It is no surprise that big retailers such as Sears, Kmart, Michael Kors, Gymboree, among others, have shut shop in the recent past. The year that just went by saw the maximum number of 6700 stores close down according to statistics. It was a few more than the number 6163 that closed down in 2008.
Though deep in our minds all of us fear as to whether we can at all run a retail business, there is no doubt whatsoever that anybody can operate a retail business successfully.
The camera superstore in New Jersey opened in 2008, a few months before the financial disaster. At that point in time, the number of camera stores in the US dwindles from 10000 to a few hundred in number. Moreover, this segment was being routed out by the smartphone business. Moreover, store lay only a few miles away from the world’s largest camera store B&H in New York City. The surprise was that, in a few years’ time, it was the largest single largest camera stores in the entire nation. With a little bit of imagination, the business model was reinvented and were working way to the top. Here are a few do’s and don’ts that will help anybody build a successful retail business no matter what the challenges are.
Cost of Rent
It is a good idea not to go in for a long-term lease of the premises unless you are sure that your location and the amount of space are top of the scale for business growth. A rental deal that can cost you is the number one retail-stores killer. Firstly, work out the business ability to make sufficient profit so that it covers the cost of the rent. For this, it is important to consider the sales required per unit area of rental space of your store. Other variables to be factored in include the number of salesmen that need to be employed in that amount of space and the amount of inventory that will be on display.
Traffic Is Important
Do have the temptation to pick a location just because you feel it is good or the rent deal sounds good. As an example, if your high-end store is amidst many other discount stores, then it may not be a great choice after all. Traffic that will pass by your store is a very important factor. Do not end up just watching the traffic. This is another major killer.
Work Ethic Says it All
Working a retail business does not end at 5 pm every day and is not a five-day week job. As a retail businessperson, you should be ready to work on all seven days and work long hours at that. This is especially true in the beginning stages of the business. It is important that you learn every facet of the business and this is the only way that you can do it. This is perhaps the only manner in which you can learn how to change your business model if the need arises. It also teaches you to manage your workforce and store.
Customer Experience is Vital
Just by putting up a sign and doing some basic advertising and promotions does not bring success in retailing. Today’s businesses are highly competitive. Whatever you offer, whether a service or a product, it is already available with another more successful retailer. The only way you can probably make a difference is by creating a memorable experience for the customer that walked in. this includes many things: keeping the store clean, hiring and training staff to be well informed and well mannered, and displaying merchandise in an attractive fashion, and more. In my camera store, we had a coffee bar, hired only professionals in photography to work at the counters and even ran photography classes for the amateurs.
Service to the Customer
No success is assured no matter how great the store location is or even if you offer the best quality products. Bad customer service can get you down like nothing else can. One unhappy customer can spoil the party for you. It is important to train the staff to let them know how you want your customers to be treated. You should lead by example and show them how the customers should be treated in your store. You can learn your bit by reading books on the matter.
Pricing Tales
If all the above tips are rightly followed, you can set the price of the goods in your store to a level that helps you make some money out of the retail business. The pricing should not be too low or too high. Unfair pricing attracts negative publicity for your store. It is a good idea to research prices for your goods both on the Internet as well other local stores. Thereafter, you should have a carefully planned strategy to price your good/services to help you to maximize the profit and simultaneously work towards customer satisfaction and balanced sales. This will help you to get positive reviews from your customers. The pricing aspect needs everyday careful planning and observation.
Retailing can be an emotionally and financially rewarding enterprise if you are smart, sensitive, hard-working and imaginative in today’s world of competitive business models.