The Retail Business Overview
The Retail Business: How Thoughtful Retail Companies Find Success
The retail business is absolutely everywhere. In fact, it’s the staple of Main streets and High streets, which it has been for decades. It’s also what defines the name, shopping, providing customers with experiences that can go beyond just buying the necessities of life.
What makes up the retail business?
In essence, retail is about buying goods. Retail companies can be clothing and apparel, grocery, any kind of supplies, liquor and drinks. It can also be a drug store, a furniture store, and any other store that sells goods. As opposed to restaurants, bars, food services, specialty services, and other industries, opening a retail store is mostly about selling goods to individual consumers.
Consumers represent nearly 70% of spending, and much of that spend is in retail. Due to this very large market, meeting consumer expectations should be at the top of your attention to get buyers to keep coming back to your retail business. Your success to meet customer expectations is directly proportional to your success, so if you are starting a retail business or you already have a retail business, spend some time thinking about how to best meet your customer expectations. There are six areas to think about:
1. Anticipate your consumer’s desires.
Many retailers do spend a lot of time on this, and others do not. For example, if you sell shoes, are you offering brands and types of shoes your customers desire? Often retailers select products they want which may or may not be the products their customers want. How well do you know your customers in your market? Do you take a survey, or talk with your prospective customers. You should go collect feedback from your buyers, not only while they’re in your store, but especially when they are not in your store! That way you can ask them what would give them a reason to come visit your retail store. Remember, half the battle is getting foot traffic; once they’re in the odds are high that they will walk out with a purchase.
2. Try new things while averting unwanted disruptions to loyal base.
Repeat customers are one of the key drivers for successful retail businesses, and your loyal repeat customers should get the highest attention from you to meet their desires. However, growth comes from innovation, and sometimes you should try new products or new promotions in order to experiment to generate growth. So you need to do this in a way that still makes your core repeat business happy, without change or disruption to how they want to shop.
For example, there was recently a hardware store that had been in business for over 30 years. Everything in the store was always in the same place, and as such, their repeat customers knew exactly where to find the supplies they needed within the store. However a new manager had the idea of rearranging everything in the store to improve traffic and flow, but what they experienced was reduced traffic and flow because the repeat customers resisted going as they knew it would take them a much longer time to find what they needed! So do try new things, but do so keeping in mind to first take care of your loyal base.
3. Give your customers another reason to buy from your retail store.
Omnichannel is the idea that gives your customers the option of buying either in-store, online, or via mobile. The simplest way to start an omnichannel initiative is with an eCommerce website. You don’t have to put all your products up on the website, but getting it going allows you to start selling over the web making it more convenience for your customers to buy products from your store. Now your customers can buy directly online, or visit you in the store. You could also expand the features on your website to be connected with your inventory tracking, allowing your customers to buy online and pick-up in the store, rather than waiting for the products to be shipped. Little things like this can make a big difference to generating repeat business.
4. Surprise and Delight
Keep your creative and innovated juices going by occasionally offering small surprises and delights for your customers. Using this to create success is especially important to generate repeat business. There are so many different ways to make your customers feel like they are getting special attention. For example, you could offer a small premium. A premium is something that you give them that they didn’t expect with their purchase. It doesn’t have to be the same thing for every customer, as it could vary depending on what the customer is buying. Something like free wrapping even though the sign says it costs money; or it could be something a little different in the store such as a new display or something fun for children.
The other way to create surprise and delight is through an up sell. Now a lot of consumers are aware of when a salesperson is up-selling them, but there are two types of up sells: reactive and proactive. We’re mostly familiar with the reaction up sell where we are offered something to buy with what we have already decided to purchase, and sometimes this type of up sell is annoying. However, a proactive up sell is when you tell the customer before they have made a purchase decision, but offering them something that goes with what they are considering to purchase at a reduced price – more value for less cost. In other words, the consumer pays for the item they really want at the regular price, but then you offer them a companion item at a reduced price; a proactive up sell.
5. Spend time planning
Periodically, and regularly, you should take a time-out and think about how your business is going. Ask questions like, what is working and what isn’t working. Also think about what opportunities could you create and what threats you haven’t dealt with yet. You should think about things like your product mix, inventory levels, pricing, promotions, up sells, premiums, store organization, etc. One of the biggest omissions that retailers do not spend enough time thinking about is the checkout experience. Is it easy and quick for your customers to check out? Do you support all the payment types customers want to use? How long do customers wait to pay once they’ve decided on their purchases?
6. Overall Execution: The Big Picture
Many retail businesses fail because their processes do not go smoothly. If you have inventory shortages, then you should change your inventory tracking and ordering processes. If you find that you are answering customers with “no, I don’t have it” more than you should, then perhaps you should look at your product line purchasing processes. Process is usually king when it comes to successful retail businesses, so list all your processes and think about what is working well and what processes may need to change.