Top 5 priorities of how to grow your retail business
Managing a business has never been easy, and managing a retail business is probably the most difficult one.
Plenty problems can appear while operating your retail business. To many people, it’s a big issue in the first period, when they have to take care of new people, strategies, concepts, and environment. I met many businesspeople, who asked me advice of how to grow their sales earn more profits. I guess those are your problems as well if you are managing a retail business.
The rest of the businesspeople have a huge concern about managing their chain of retail stores and businesses. Most of them share one thing common, which is entirely capable of creating a small business; however, when it comes to a larger number of stores, they are stuck in the middle of uncontrollability. In my point of view, the problem does not lie in their talents; it lies in their skills of administration.
Therefore, whoever you are, a starter or an experienced retailer, there are still some ground rules of how to grow your retail business, which you need to know to optimize your capacity. Here are 5 fantastic essentials that I want to show you.
Top 5 priorities to grow your retail business
1. Have a thorough grasp of internal data
To manage and build something well, you need to understand its nature. Enriching knowledge about the data and figures created by your business is a splendid way to do that.
Internal data include everything that customers do in your store. You will be able to know which stalls are most stopped by or how many customers visit your store every day. Those measurements create an opportunity for you to identify the busy times, the slow times, and conversion rates, which is the most important one. If you can discover these data, it will be much easier to stimulate your customers to purchase goods by changing the design of the stalls or making sure that the products are arranged in a reasonable way.
So how can you measure this figure? Perhaps, you are thinking of standing at your store’s door and count all the people entering.
I’m saying NO because that would be so ridiculous. Instead, you can install cameras or heat sensors to track the number of customers coming in. Cameras can be attached to the corners of the walls for surveillance and be measuring the busy times or slow times. You can mark the place where the customers visit most and start analyzing their demography. Heat sensors, which can map your customers’ movements, are more modern and give a more precise result than cameras. You can install them at the door and on the ceiling.
When I first started working with my department store, I only installed cameras because they had a smaller price. However, when the number of visitors was massively growing, I realized that the figures given by heats sensors were much more trustworthy. So I installed them as well and had still been satisfied until now. You can try the way I did if you want.
2. Make yourself an excellent stock manager
If you want to know which goods are best bought by the customers, stock management or inventory management is necessary. It also gives your quite many ideas to control your products. Just have it in your hand, and you will know how to raise your revenue and profits with the remaining inventory. Which times are the most suitable to advertise, promote, give a discount, or launch a new product will be a piece of cake as well when you already measure your store’s inventory profits?
To calculate it, use these formulas:
Inventory profits = Cost of goods sold / Average inventory
Average inventory = (values of the inventory goods at the starting point + values of the inventory goods at the ending point) / 2
For example, last year, I had 500.000 dollars of inventory goods at the beginning of the year and 200.000 dollars at the end of the year. So I would have 700.000 dollars of average inventory. The total cost of goods sold was 4 million bucks. Following the above formula, I had 5.72 inventory profits.
If you want to know for how many days you can sell the remaining stock, you can divide 365 days by the number of inventory profits. In that way, it will be more comfortable to think of some marketing campaigns for your store.
You can look for more excellent ways to measure your inventory turnover in here: Calculate Inventory Turnover
3. Balance your financial circumstance
The annual financial situation is crucial in growing your retail business because it tells you where your income, expenditure, and profits flow. Your business will have a better financial balance after calculating some special figures. Unfortunately, it is difficult to measure them if you don’t have any professional skills. I can only tell you that there are four basic figures, so you will have brief information about what you need to search. They are:
- Liquidity: Show how your business can pay bills in short terms.
- Solvency: Measuring your business's or company’s debt and telling you how stable your business is.
- Profitability: Showing how much your business can convert revenue into profits.
- Efficiency: Telling you how many sales you business can generate from investments
In my opinion, you should hire an accountant for further development. Otherwise, whether you have someone like that or not, you should learn a course about accounting. What’s good about being a manager is that you need to know a little bit of everything. If you have some fundamental knowledge about accounting, you will feel much more comfortable when reading financial report every year and your accountant won’t have numerous difficulties explaining all the figures for you.
There are various training that you can follow, such as short courses on financial accounting at The American University, the training Executive Development at Kellogg School of Management, or Options in Accounting at Harvard Summer School. If you don’t have much time, you can learn online with coursera.com like me. After studying on Coursera for a while, I could talk to my accountant almost like a real co-worker. You can try it whenever you have time.
4. Get accurate customer insights
I probably don’t have to say much about how imperative this element is. Every retailer would know that it is an essential part to grow their brand name and influence. When your business is more popular, of course, more clients will come and contribute to grow it. If you want to have loyal customers, who are willing to buy from your store over and over again, you need to take a deep look into customer insights.
I agree that this is the most complicated task because this information is hard to find, but it is worth. What you have to do most and best is to listen. Listen carefully to your customers’ desire and problems, and ask yourself how you can make them come true or how to fix them. Then, you can make an advertising or promotion campaign, affecting those needs, wants, and demands. It will be terrific to facilitate your customers to go to your store more often and purchase more.
Find out all you need to know about customer insights here: https://infocus.emc.com/laddie_suk/customer-data-quality-how-to-measure-it-improve-it-and-make-it-stick
5. Use social media and technology to create competitive advantage
In the technology information era nowadays, if you don’t take advantage of technology, it will be quite unpleasant to compete with your opponents. Besides, your clients will be much more triumph when they are supported by technology. For instance, you can make a list of your goods on the computer (if your store is large), so when the customers ask if there was a specific product in your store, just type its name and the answer will be given to them within a few seconds. Remember, no one likes to wait. If you can save time for your customers, you can also save time for yourself.
Moreover, about 80 percent of the world population is using social networks and over 40 percent of people are accessing the Internet every day. This is why you cannot stand outside the game. Facebook or Twitter is a smart and viral way to advertise your business brand. And if you can create a website for your store, it would be even more terrific because you will double your sales channels. Look at some ways to market your business with technology in here: https://blog.vendhq.com/post/64901828848/retail-expansion-ideas-4-great-ways-grow-retail-business
Besides, technology plays an integral part when you expand your business as well. Expanding means more products, services, and customers, and it is the most profitable method to grow your business. The process will be much more convenient when you apply technology in transferring goods from this place to another. Furthermore, a better forecasting will appear when you have an analyzing system. The market trend, customers’ needs, or your business’s efficiency will all be revealed with a click.
I can assure that all of the retailers in the world spend an amount of their revenue, whenever they have it, to invest in advanced equipments for their stores. So why don’t you? Making yourself more competitive means that your business is growing and growing every day.
Some other useful tips
GET YOUR PRODUCT A LICENSE:
If your retail business can provide a self-manufactured product, there is no hesitation to get a license. It will enhance your brand’s reputation and create a huge advantage for your business in the market. This method is no doubt in growing your retail store. I am designing a new product for baby and it will probably go into production by the end of this year, 2016. There is one thing for sure that I will get it a license.
MAKE A JOINT VENTURE:
This is one of the quickest ways to grow your business. Find an appropriate partner and make an offer. I believe he won’t refuse to a chance to raise his revenue and profits. There were plenty examples of retailers in the past, which succeeded thanks to merging with other business, such as EMC and Fatwire, Siemens AG and Nokia, or Sony and Ericsson. You can follow this method if you think it is useful.
DIVERSIFY YOUR PRODUCTS:
When you already sell one good well, why not invest to other products to raise your revenue? Besides, if you have more than one good in your store, you can adjust the price among them to fit the market and earn the highest profits without affecting your client's satisfaction. For example, I offer my customers free peanut candy sold directly in the stalls, which kids always love and parents usually do not say no to this request. The point is that this type of candy makes kids thirsty and I charge fees for water. You are getting my point, aren’t you?
Have you been enjoying my top list so far?
I write this article basing on my experiences, so I try to make something useful for both beginners and professionals. If you are having all of the criteria above, you are ready to be a retail manager. And whenever you feel that there is something wrong with your business, just look at this list again and you will know what you need to change.
So whatever ideas you are having in your mind about how to grow a retail business, do comment to let me know because I would love to discuss with you. And share my article if you like. There’s chance you might find a partner for joint venture.