Breaking through the competition to set up a successful retail business can be a challenge. It takes a bit of researching to learn how to accelerate your retail business growth and ingrain your reputation with customers.
In this article, we cover just that and how you can combat minimal or slow growth to build up a stable profit. Whether you’re just starting out or a few years in the black – if you’re in retail and want to know how to grow your business, then this is for you.
Identify the reason for slowing growth
Start off by asking yourself a few questions to get a better idea of why you might not be growing as quickly as you’d like:
• Are you offering the products your consumers want? Demand is a crucial part of a successful business. Make sure you’re selling the right products to the right people.
• Is there more competition? Consider if a similar business has popped up in the neighbourhood or expanded into your location. Maybe your customers are turning to online shopping at other stores because you don’t have an ecommerce site.
• Are your existing customers happy with your products? Would they recommend you to their friends? Loyal customers and word-of-mouth referrals play a key role in stable sales.
• Does your location or facilities need an upgrade? Double-check that your store is in a convenient location and your facilities are clean, modern and inviting.
• Do you simply need to ramp up your marketing? If you have a good customer base but just not enough of them – it might be time to increase your marketing efforts. Or if you know your products are in demand but can’t quite seem to find the right people, targeted marketing can help you focus on your potential customer base.
• Are finances/business expenses managed efficiently? A profitable business can be massively impacted by poorly managed finances and procedures – imagine what it would do to a retail business that’s still battling to find its footing. Make sure you have enough funds to finance your business, and that your systems are helping you manage everything effectively.
Decide on how you want to grow
If you’ve established a profitable store or have determined that growing your business is the right next move, there are a few ways you can do that.
• Renewing or expanding your current product line based on your most popular items and/or customer feedback. This will entice current customers, help you patch any gaps in your offering so your clientele can get everything they need at your store, and attract new consumers.
• Opening a second store will be a sure-fire way to reach new people. Don’t assume it can be completely identical to your original one though – be sure to research the new location and tailor to that demographic.
• Opening an online store will minimise – if not eliminate – the geographical barrier to convenience. By taking out the need to physically be in your store to buy your products, an online store can widen your customer base.
What to do when renewing / expanding your store
If you looked at that list and thought to yourself: there’s room to improve, that you could cater better to your existing clients and attracting new customers, then consider these three factors that might influence your ability to do so:
Growing your business
Growing your business so it’s up to par with (new) competitors – it’s a lot easier to keep up than catch up. If your competition is expanding their product line, it might be profitable for you to do so as well. Be sure to do your research first though. If you’re not completely sold on a new product, consider testing it out on your market with a limited time offer or seasonal sale before taking a blind leap of faith.
Expanding service offerings
Expanding your service offering could expand your clientele. New products could draw in a crowd you hadn’t quite tapped into yet. It can also make your current customers more loyal as new products will keep them coming back and checking in regularly.
In today’s competitive market, customer experience is a massive differentiator. If you’ve received some feedback from your employees or customers around a gap in your current product or service offerings, you might need to renovate the space or upgrade your equipment (e.g. POS system or the mobile version of your website). Investing in that improvement will enhance your value and service.
It’s easy to have blind spots when it comes to a project you’re putting your heart and soul into – like a retail business. Regularly ask for feedback from employees and customers to better understand what parts of your current business need to be upgraded or renewed.
• Feedback you might get from your customers could be around your products, décor or interior design, price or sales, and range of products offered (or not offered!).
• Listen for complaints from your staff around inefficiencies or sticking points in your processes such as the POS system used, malfunctioning computers, or other software that needs updating.
• Look at what your competitors are doing. Have they hit the jackpot with a special sale or promotion? Did they switch marketing software and now their emails are looking like they’ve hired a professional communications team? Are they partnering with local organisations to sponsor events or teams? How are they establishing themselves within the community?
Negotiate with Your Suppliers
Once you’ve found suppliers that deliver quality products you trust, stick with them and establish a regular purchase order. When you’ve built that relationship and proven to be a regular customer, try negotiating for better bulk deals. Your consistently large orders can put you in a good position to get a discount.
Consider not having your expansion store adjacent
Whether because of stubborn next-door neighbours, rent costs or leasing periods – sometimes it won’t work out to expand your store into the directly adjacent space. This doesn’t mean you’re out of luck though! Growing your business with additional range can still be done by expanding your search radius. Look for retail spaces within walking proximity as an extension to your store. Even by hopping over your neighbour to the next shop, you might find that space available. Something close by might just end up being close enough. All you need is a place where it’s easy for your customers to visit both stores in one visit.
Plan your renovation period for off-season
If you decide to renovate your retail space, be strategic with your construction schedule. Plan for your store closure to happen during a slow time of year. This will ensure you’re losing the least amount of revenue as possible. Consider adding a pop-up store in a nearby location during that period and sell your most popular products.
If a full shutdown isn’t feasible or not necessary – consider doing the renovations in two chunks so you’re only doing half of the space in one go. It’ll make the construction take twice as long, but half of your shop will remain open throughout the whole construction period. Again, if you do this then it’s best to only stalk your most popular items in the available space.
Choosing a New Location
Expanding your retail business into a second location is an exciting milestone. Even though you have a leg up on lessons learned since opening up your first store, it’s important to remember key factors when opening up any store – no matter if it’s your second or thirty-second.
• Analyse your current store clientele to see who your product or services is resonating with.
• Once you have a good idea of your ideal customer demographic, look for areas with a similar market that will suit your second store location.
• Decide if this second store is going to sell the same, supplementary, or a smaller/wider range of product compared to your original store.
• If you’re going to use this location as additional inventory management for popular products, does it have sufficient storage space?
• Does the existing layout work for your displays or service flow? If not, does it call for a simple rearranging or a renovation?
• What competition is in the area? How much organic foot traffic will you get? Is it easily accessible via public transportation or will your customers need a car?
• Is the building in a low-crime area or will you need to set up extra security precautions?
• Visit surrounding store owners and consult with property agents to get an idea of the market rate, average length of business in the location (do most businesses struggle and is there a high turnover rate?) and rent prices.
Build Your Brand Online
When looking to expand online – it isn’t a direct translation to running a brick-and-mortar store. You might need to adjust your marketing and add to your selling processes. You will certainly need to choose the right platform for you because not all eCommerce sites are equal. Make sure you include these components:
• A clear display of your products and explanation of your service offerings
• Call to action – what do you want people to do? Buy your products? Book a session? Reserve a spot? Clearly communicate what they should do and make it easy for them to do it!
• Contact information
• Your story – have an ‘about us’ section that shares the story on how your business came to be and how you want to make people’s lives better or easier
• FAQ –Take note of the questions people ask you. Save yourself a bit of customer service time by proactively answering them online. This can also increase the quality of customer experience you provide to your clientele by picking up on issues or annoyances.
• Social media accounts linked on your website – social media is a strong way to increase your reach both organically and through paid ads. Make it easy for people looking at your products to find your website and follow your active social media accounts so you can stay top of mind.
• Any discounts / promotions / loyalty schemes – who doesn’t love a good deal? Make it easy for your customer to find them!
• Shipping details such as your geographical delivery range and the additional price to ship the purchase (which could be in your FAQ section)
Google My Business
Except for organic foot traffic that stumbles across your store, most people end up doing some kind of Googling or online shopping before buying. Whether your retail business is online or in a store – make sure your Google My Business account has all the information your customers need to find you. At the bare minimum, your account should include:
• Your website link
• NAP: Business Name, Address, Phone
• Opening Hours
• Description of your business
• Service area
• Photos of your store and products or services
Social Media Accounts
You’ll be hard-pressed to find a successful store that isn’t on social media. The question isn’t if you should be on it – but where. Which platform? That depends on your customer demographic. The answer is that you should be wherever they are. Facebook, Pinterest, Instagram, Snapchat, TikTok.
Once you know where they are – be sure to post regularly to build a following and stay on their feed. If you’re holding any special promotions, those can go on your account too, it doesn’t just have to be your products. Sharing your seasonal inventory and discounts are free advertising. If you haven’t built a big enough following yet or want to widen your reach, consider using some of your marketing budget to promote your posts and set up ads.
As with any business, it’s important for retail businesses to stay in touch with their customers. This can be hard if your customers visit your store infrequently or spontaneously, which is where email marketing comes into play. Regularly touching base with your customers via an email list will let you keep them updated of important information and remind them to come back. This could be in the form of a regular newsletter or one-off emails around sales/promotions, new products, testimonials, store updates, etc.
Word-of-mouth is one of the best ways to gain new customers because people trust other people. Especially if the praise or review is coming from someone they know. Consider setting up a referral program that benefits both your existing customer and a new one. Not only will that encourage your store’s fan to spread the word, you’re also rewarding them for the help. This will make them want to come back and cash in because who doesn’t love a good deal? Talk about a win-win.
Retail Business Loans With OnDeck
There are a lot of expenses that come with owning a business outside of basic inventory stock. A retail business loan can help you execute your vision with the maximum amount of resources to set you up for success. In order to acquire additional funding, consider the following:
Understand your credit profile
When looking at a loan application, banks and lenders will reference the applicant’s credit profile to see if it hit their qualifications. A credit profile looks at your credit score and report, which comes from your credit history. It helps them determine things like how good you are at paying bills on time or how reliable your income is. Credit scores can also give you a sense of your business’ financial position. Get your business credit score now.
If you’re wondering whether you’re eligible for a small business loan or not, here are key requirements to get a loan with OnDeck:
• Minimum $100,000 gross annual turnover
• Minimum 1 year in business
• Minimum 3 monthly deposits
• No bankruptcy (prior or recent)
• Minimum 500 business credit score
Your purpose for a loan?
There are a variety of different kinds of loans and even more reasons why you might want one for your business. A loan might be the right option if you’re looking to:
• Purchase inventory
• Hire additional staff
• Start or increase your marketing initiatives
• Expand your store, to a new location or online
• Cushion cash flow in preparation for a slower season
OnDeck offers flexible business loans that solve a need for extra funding. Whether it’s the cost of materials, covering a cash flow shortfall or getting some new equipment for a project, OnDeck can help you.
With an easy online application process, loans of between $10k and $250k, and terms of 6 to 24 months, we make it simple for businesses to get the extra funding they need.
Apply online in minutes at www.ondeck.com.au or call our helpful team on 1800 676 652 today.
Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at January 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.