Starting a Retail Store Involves Much Advance Preparation

Getting before Customer Eyes Is the Key Success Factor for Retail Stores

Starting a retail store is not as simple as stocking some merchandise in the first available building and sitting there waiting for customers. Location, location, location is the first success key for traditional brick and mortar retail stores. Locating the store in areas with busy customer traffic brings the retail outlet to the notice of prospective customers.

Location is only one of the several success factors, however. And in the case of mail order retailing and online retail businesses, location loses significance. However, even these kinds of retail businesses must get before the eyes of prospective customers.

Retail Business

Retailers are the final link in the distribution chain, selling to ultimate consumers. The chain begins at production centers such as agricultural farms, fishing boats, mines or factories (the factory can itself be a final consumer of raw materials produced by a farm, boat, mine or even another factory). Different channels, such as distributors, wholesalers, commission agents and brokers, keep products moving till they reach the retailer.

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Create a Great Image for Your Business through Press Releases, Articles,...

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Traditionally, retailers were brick and mortar establishments. The corner grocer serving a small community, the department store serving a larger clientele and the modern shopping malls accommodating retailers selling all kinds of products and even services are examples of such establishments.

Mail order retailers arrived on the scene to serve customers in remote areas. A retail store located in such an area might not be able to generate enough business to earn a profit. Mail order houses also catered to customers who preferred to shop from home for one reason or other, even if they lived in urban areas.

With the spread of Internet use a new class of retailers arrived on the scene - the online retailer. The customer now could do things instantly - see catalogs of products, compare different offers, order selected products from selected seller and pay for them electronically. In the case of some products such as software and e-books, even delivery could be immediate.

How Do Retailers Promote Sales?

You can start by observing how your competitors promote their business. How do they:

• Make customers aware of their business and its location?
• Manage to bring customers to their store
• Display merchandise attractively in the store?
• Draw attention to particular items of merchandise?
• Make customers aware of special offers?
• Design special offers that would appeal to customers?

You promote your retail business by attending to certain key factors: Image, Pricing, Customer Service, Advertising and In-Store Promotion.

• Image: You create a good image about your store in the minds of customers through pleasing shop exterior, interior layout and deco, and good lighting. The image is enhanced through correct selection and attractive display of merchandise, and proper behavior of store personnel
• Pricing: Your pricing depends primarily on two things: competitor prices and whether you are projecting yourself as a bargain store or a premium outlet. The prices have to recover any free services (free car parking) you provide and the cost of extending any credit.
• Customer Service: Customer service is one area in which small players can get an advantage over larger businesses. The small retail store can get a better idea of the special requirements of their customers and design services that cater to these requirements. Consider also how you can recover the costs of these services.
• Advertising: Get professional help in developing sales copy and selecting ad media (local newspapers, radio, direct mail, flyers...). Your advertising should be designed to:
• • Supplement the desired image,
  • Emphasize the benefits you provide to customers (low prices/premium products/free services/...) and
  • Match the standard ad budget in the trade (otherwise you might be at a competitive disadvantage).
• In-Store Promotion: Training your counter salespersons to maximize sales per customer, allowing customers to pay by credit card, developing special offers that appeal to customers and display of particular merchandise in attention-catching ways are examples of in-store promotion.

Retail Business Success Factors

• Location: If you are a brick and mortar retail store, it should be located at a place where there is adequate volume of customer traffic.
• Merchandise Selection: The merchandise you stock must be what the customers at your location want and prefer.
• Competition: If there are too few customers at your location for you and your competitors, for the merchandise you are selling, success depends on your ability to take away customers from competitors on a sustained basis.
• Promotion: As discussed in the previous section, retail business promotion involves a number of elements. You have to manage all these on a continuing basis to compete effectively.
• Economy: If your customers' purchasing power is seriously eroded owing to economic developments, your sales volumes might be affected, leading to increasing competition for existing business and higher promotional costs.

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