Critical Success Factors in Retail

gradyreese/E+/GettyImages

Despite the damage internet shopping has done to bricks-and-mortar retail, most sales transactions still take place offline. Customers like the convenience and ease of online shopping. But they also enjoy trying on or handling goods before they buy them, and the satisfaction of taking them home immediately. If you give them the right incentives to visit your store, you can win out over the internet.

Branding is Key

Whatever your line of goods – antiques, trendy boots, imported Thai candy – you have an advantage if customers associate your products with your store, rather than Amazon or WalMart. Sephora, the high-end makeup stores, thrive in part because of exclusivity. The expensive products women buy at Sephora aren't available on Amazon, which makes Sephora a destination worth driving to.

The Store Experience

For a lot of customers, the experience of shopping is part of the fun. Rather than sit on the couch, they go to your store, wander about with friends or family, then go somewhere nearby for dinner. It's vital to make their experience as enjoyable as possible. Part of the appeal for makeup-store customers is that they can snap and share selfies as they try on various looks. Brownie's Dog Boutique took its name from a real dog, so the store includes a mini-museum telling Brownie's story.

Solid Inventory Control

Inventory is a balancing act. You want enough stock on hand to satisfy customers, but items that sit on the shelf unsold don't help you bottom line. It's why big box stores such as Target and Nordstrom are launching significantly smaller stores, reducing the quantities needed to fill the shelves. It's not just the cost of buying, shipping and storing items but the time, effort and money required to maintain complex supply centers, distribution centers and deal with multiple suppliers.

Even if you're not slimming down from a big box, you may be able to improve your inventory management. Some retailers have been able to drop several thousand of their less popular offerings, concentrating on more successful products, without disappointing customers. It's also important to track and manage inventory so that you know when it's time to reorder popular products.

The Personal Touch

Building a personal connection with customers is another critical factor. If customers feel you and your staff are making a real effort to help them, they'll appreciate it. Having friendly, knowledgeable staff is part of that, but only part.

Use social media or a store blog to keep customers informed and encourage them to communicate with you. If you gather information on their purchases, for example, through a loyalty program, make use of it. So long as customers understand what you're doing, having a store that knows what they want in advance and provides it is a plus. Understand customers' needs and meet them. One Nike store, for instance, uses an interactive system so that customers can see how the shoes perform when they're actually participating in sports.

References

Resources

About the Author

Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com