I’ve been involved with the retail industry across many sectors for some years now and I know how tough recent years have been for independents. The power of the large multiple retail groups has had a big impact, as have the effects of the recent economic downturn.
But the future for independent retailers seems bright – the UK retail sector is incredibly entrepreneurial, as indicated in our Open for Business report. Customers are turning away from large homogenous retailers and embracing the local and the personal. Budding entrepreneurs are spotting opportunities on high streets being vacated by the bigger national chains and it is heartening to see so many new retailers continuing to open as well as new online retail concepts.
Total retail sales in the UK last year were $333bn and retailing employs more people in the private sector than any other. It is highly competitive and undergoing change as well as challenges. But it’s also dynamic and responsive to consumer trends and demands – while fledging retailers face many hurdles, if you get it right you can build a great business. Retailing accounts for nine per cent of all VAT registered businesses, so that’s 281,930 shops – the majority of which are run as small, independent businesses.
Here are my top tips for small retailers looking to establish themselves:
(1) Identify and communicate your raison d’être
Make sure you know why your business exists. It can’t just be about making money – this won’t get your customers excited and engage them. Think about what will make your business stand out from the crowd and communicate this passionately to your team and your customers.
(2) Carefully select your first store
Location is key here and on-the-ground research is essential. Check out the footfall, demographics and the competition. Shops with the highest footfall will of course have the highest rents – you need to consider if it is worth paying more as an investment to get your business off the ground. It’s also vital you get yourself a good solicitor and property agent, and make sure you consider and plan for how your costs are going to increase with the opening of a store.
(3) Consider a pop-up shop
Another option when thinking about your first store is a pop-up. This can be a great way to test your business concept, build awareness of your brand and meet customers. You can test out different locations in this way too, before committing to a permanent base. It’s also worth assessing the lay of the land at events like Autumn Fair, where both big-name retailers and independent can source stock and place orders, as possible routes to diversifying your product range, as well as providing always useful networking opportunities.
Read more on retail:
- Majority of UK shoppers willing to pay via wearable devices
- A third of new businesses could be pop-ups by 2017
- How retail became Britain’s fastest-growing sector
(4) Successfully embrace the essential online opportunity
Customers expect digital integration and so a website is a must – not just for sales but as an alternative channel through which your customers can engage with you. There’s lots to consider here: for example, you must ensure that your site is fully optimised for mobile devices, as this is how most people will get online in the future; the content of your site will need to be search engine optimised (SEO) so that potential customers can find you online; and you’ll probably need to promote it through search engine marketing (SEM) for the same reason. Another tip – when you’re considering names for your business, make sure you check the domain name availability for your website at the same time.
(5) Establish and retain loyal customers
The bread and butter of independent retailers is customer satisfaction. How often customers return to your shop (or website) is vital for your business growth. My top tips here are to make sure you listen carefully and respond to customer feedback – especially the negative. And try not to take negative feedback personally. Customer service is key so make sure you train your team to excel in this area. Another great tactic is to reach your customers using social media. Engage with them on a regular basis and ask for feedback.
Louise Young is divisional director of retail at i2i Events Group.