I obsess constantly about what it would take to make a retail business successful. The magic bullet, or if not bullet, at least a list of key success factors. Ten would be nice number. Or twelve. Maybe even seven.
I have made the list(s), and re-hashed it countless times. I started writing this blog to come up with The List - just to impress you dear reader. But I failed.
There is no list. There is a process though: the Art and the Science of Retailing. It is simple – but deceptively so. Ultimately there are four things – the four cornerstones of the retailing sine qua non. Each of these four activities is a primary driver of retail success. They are all indispensable, so the order below is simply a logical flow and does not reflect relative importance.
This is the starting point of ALL retail success and definitely THE pre-requisite. This is what drives you, the retailer, and gives you the energy to do everything that it requires. Retail is emotionally draining with long, grinding hours. And a poor attitude makes all the inevitable challenges insurmountable.
The right attitude is the start of great customer service, for in essence customer service is about getting along with other people. To be positive and gracious under pressure requires a positive attitude. Great attitude allows good supplier relationships to develop. The right attitude will even set you up well for establishing win’-win relationships with the landlord – and believe me, I was there.
Retailing is essentially a people business. If you don’t like your self, and if you don’t like people, you will fail.
Every retailer is in the hospitality business.
2. Create an offer.
If a retailer does not have an offer that meets an actual market need, the battle can never be won. Find out what the customer wants and deliver exactly that. There is NO substitute for actually meeting a real customer need.
The right stock at the right price = A great value proposition. This is not about being cheap or being the cheapest. It is about making an offer at a price that the customer perceives to be of value. Short-term bull-sh*tting can only take you so far – eventually the real value proposition will be revealed.
In order to create an offer, you need to intimately understand your customer. Just because a shopping centre has 14 million people wandering through does not mean your business will automatically be successful – and how often have I seen that!
Your offer must be IN SOME WAY unique. The reality of the marketing landscape is that people simply won’t notice you if you blend into the background. Be different or be dead.
3. Communicate the offer.
Consistently communicate with the market. It may be advertising, or it may be something else. But consistent, on-brand communication is paramount. Communication is the difference between being in a customers ‘awareness set’ vs. being in the ‘choice set’. At any given point in time most consumers are only willing to consider a handful of options and only choose from 2 or 3 which are deemed equivalent.
Your brand promise is an integral part of your overall consumer proposition. Everything you do – and don’t do, strengthens or weakens your brand. And you need your brand to succeed; simply because a brand is a heuristic for consumers to make quicker, better decisions.
Visual merchandising is your 24/7 sales person. Good VM sells and it sells well if it is done well. Or the opposite! Get good at it; the principles are pretty simple and there is no excuse for failing this test. Windows talk – learn the language.
Personal selling. Really, truly understanding the psychology of the sale is important. Most specialty stores cut back on staffing and end up operating like a supermarket. A bad (or untrained) sales person is an overhead and a good sales person is an asset. Having no sales people (because they are behind the counter or in the stockroom) is stupid, stupid, stupid. Get rid of the bad ones and get (or train) some good ones.
[EXERCISE: Google ‘psychology of retail selling’ and find yourself a company that can train your people how to sell J]
Everything you have done will come to nought if you do not have the performance management systems in place.
Manage overhead to the benchmark or better.
Manage risk – all risks (financial, reputational, technological etc). Manage safety. Good housekeeping is a sign of a business that is under control.
Retail is ever-changing, and the only way to survive is to adapt to the changes. The only way of knowing what works, what isn’t, what’s changing and what’s not yet changing, is to have super systems in place. If you are still operating an old-fashioned till… well I don’t want to be rude, but you surely know what I must think.
QUIZ: How many coffee shops have a loyalty card? How many coffee shops can tell you the redemption rate of the card? Or the cost? Or the financial benefit?