Retail has a critical and indispensable position in the entire chain of businesses working towards taking the product from raw material to the consumer. Although in the post COVID new normal some critics may challenge its future with the rapid acceptance of e-commerce, the customer experience delivered by retail will remain largely unparalleled until drastic advances in virtual reality or holograms.
Retail is one of the simplest forms of businesses and the most commonly opted business for millions of micro business and entrepreneurs across the globe. Based on our expert analysis of numerous businesses, despite the regional variation of business context from Mumbai to Abu Dhabi to London or New York, the fundamentals of business remain the same.
Hence in order to build a successful retail business, one needs to get the following things right:
1. Location
Retail is a game of footfall and any location which elevates your ability to get more customers to walk in to your store will greatly elevate your revenue potential. Locations such as shopping malls, market streets and tourist spots are some of the footfall magnets which attract footfall from beyond the nearby locations.
2. Visibility
The second important factor is your visibility and appeal. It attracts attention and lures the prospect inside your store. Hence corner locations whether at crossroads, malls or even trade fairs are most sought after and cost a premium. In addition to exterior also excellent product-display is required to trigger buyer appeal.
3. Product Basket
Choice of your product needs to compliment your location or vice-versa. For instance, stores located at tourist spots do NOT sell consumer durables and get away selling cheap items as they do not need to bother about client retention and have to fulfill low ticket value sale. Moreover, the blend of profit margins across product basket needs to be analyzed and calibrated to meet profitability goals.
4. Optimization
Retail is a game of high overheads, including salaries of too many customer executives and premium rental costs for desired locations. Hence all these resources need to be utilized for the highest output value and the maximum potential extent. Utilizing the maximum store area for display and keeping product storage at cheaper commercial spaces on higher floors while ensuring the highest possible customer to executive ratio.
5. Experience
Post COVID the use of e-commerce has increased dramatically and as e-commerce companies deliver right at the doorstep, this important factor of experience just became much more important. Hence, now you have to give your customer a very strong reason to get out (overcome laziness or inertia) and arrive at your doorstep instead!
Although retail has by far remained the simplest form of business, with rising competition and evolving customer experience, higher level for business maturity and expertise is required to build a successful retail business today.