Thanks to online shopping, a lot of folks are screaming about the impending death of retail. But, they’re forgetting one important thing. No matter how easy, simple, and effortless online shopping is, it will never be able to compete with the experience retail shops can give shoppers. And that is the key in finding success in retail.
The way we are able to shop may have modernized, but the basics are still the basics. Customers still crave experience over all else.
Starting and running a successful retail store can be challenging, but it can also be lucrative, fun, and fulfilling. To prosper, especially in this age of one-click buying, there are certain tried-and-true rules that should be followed. These 8 rules can help you find success in retail.
The Rules of Retail Success
You must have an intimate knowledge of your inventory—how much is currently on hand, how much you’ve sold in the last week, month, six months, etc. If you think a product is amazing, yet it continues to perform poorly, stop carrying it. No matter how excited you are about a new vendor, make it a habit to always test them first to see how your customers will respond. Don’t try to be all things to everyone and carry every product. A thorough understanding of the ebbs and flow of your stock—and the habits and impulses of your customers—is key in avoiding overbuying.
Know what is best for your business.
While there are tried-and-true rules that apply to every business, there are also nuances with every business. There are differences in how each business owner works, learns, gets motivated, and enjoys their work. It’s imperative that you keep these differences in mind when making decisions for your business. If purchasing terms don’t work for your specific model or cash flow, pass. If your competitors are doing something that works for them, don’t automatically assume it will work for you. Make sure you always have detailed insight into your current and ongoing costs so that you can ensure your retail prices are adequate.
Find business, don’t wait for it to find you.
Sitting around waiting for something to happen, or something better to turn up, isn’t a business strategy, it’s a hindrance. Working hard, and expending valuable energy, all for the sake of just working hard is also a liability. You need to have vision, actively study the conditions of your market, and pay attention to the wants and needs of your customers. Look for opportunities and act when you find one. Do what you can to grab the attention of potential customers and make it irresistibly inviting for them to visit.
Get the word out.
Learn all you can about who your customers are and use every opportunity to get the word out to them about what you’re doing and why your business is the place they should shop. Always be consistent and persistent in your message. Encourage and entice customers to share their experiences at your store. Think in terms of community rather than individual customers. When shoppers feel they are a part of your brand, they are much more eager to share their experience with anyone who will listen.
Focus on your vision, farm out the rest.
As I’ve mentioned before, burning the candle at both ends and working constantly is all too often treated as a badge of honor among entrepreneurs. It’s not, and the sooner you acknowledge that busy-ness isn’t business, the better. Don’t micromanage. Understand every aspect of your business, not so you can control and nitpick, but so you can better understand how your overall vision is coming together. Hire great people, train them well, let them know what’s expected, then trust they will do the job you hired them to do. Never try and do work you’re unfamiliar with if someone else can do it in half the time. You need to act as the captain of your ship, delegating wherever and whenever possible, so you can keep your focus and attention on the overall direction and (sea)worthiness of your store.
Credit can serve an extremely valuable purpose for businesses, especially for retail businesses that tend to operate on credit terms with suppliers. It allows you to expand and purchase inventory while demonstrating how well your business manages its finances. Like personal credit, however, it can be dangerous if not actively managed properly. Use business credit for business expenses, not your personal credit. Pay attention to your business credit score and learn how to interpret it. Be patient—it can take up to 18 months for the average business to establish, and improve, its credit score.
When it comes to customers, you may want to consider offering financing options (ie, credit) to them depending on the retail prices of items you’re selling. If you decide offering credit would be a good fit for your business, the simplest, cleanest option is to use third-party solutions like Viable, PayPal, and LendPro. This hands the responsibility of running credit checks and collecting payments to them. It also transfers some of the legal risks as well. Do your homework and research several companies to ensure they will work with your business and provide the best solution for your customers.
Resist the urge to overextend.
In the U.S., we love the saying, “Go big or go home.” As far as I’m concerned, that overworked, ridiculous slogan holds way too much sway in everything we do, including how we run our businesses. If you subscribe to this “go big” mantra, and you only have $1,000 to start a business, you may mistakenly decide to try starting a business that really requires $10,000 to actually launch successfully. I mean, do or die, right bro? Wrong. To find success in retail, you need to stay in your lane while always looking for ways and opportunities to grow and improve so you’re ready to change lanes when an opportunity presents itself. Don’t try to do too much too soon. Don’t add locations too quickly. See rule #1.
And yeah, yeah, I’m aware there are always exceptions to the rule. But those businesses that turned $100 into $100 million are anomalies. For the vast majority of businesses, especially those that rely on the whims of fickle customers, slow and steady wins the race.
Always look for new ways to do things.
As much as the phrase “Go big or go home” grates on my nerves, I hate it when folks tell me they’re doing something simply because “that’s the way it’s always been done” even more. You need to be habitual in your efforts to learn and evolve. Constantly be on the lookout for new ways to do things. Don’t be afraid to try new methods, approaches, and strategies—keeping an eye on how it fits with your business. Stay in touch with successful changes in business methods and models (always with a close eye on rule #2).
A lot of local retail businesses were struggling even before the stifling mandates and orders that have been piled on thanks to the COVID pandemic. If you own (or run) a small retail business, you have got to focus on giving customers what they want and work as hard as you can to provide them with a unique experience when they enter their store. Doing so, and following the rules above, will help you to achieve more success in retail.
PS – I encourage the rest of you to search out, shop at, and support local retail stores in your area. You’ll get to know your neighbors better, keep more money in your community, indirectly help provide more money to local charities, reduce environmental impacts, and keep your community unique.