Many retailers have struggled to keep their businesses afloat during the recession. As much of the world is still trapped in financial turmoil and unemployment rates hover around 8 percent, consumers continue to be cautious with their spending. And many companies -- both big and small -- are feeling the squeeze.
Over the last few years, many retailers, including nationally and internationally renowned stores, have begun shuttering stores while others have closed for good. If major brands and retailers are being forced to cease operations, what are smaller, independent retailers to do?
Some experts suggest smaller retailers should adopt a "back to business basics approach" to stay afloat or even thrive. There are many ways smaller retailers can heed that advice.
- Improve the customer experience. When shoppers decide to shop, they'll be more inclined to spend their money with businesses that are receptive to their needs. Selling unique merchandise, employing a knowledgeable and well-trained staff and effectively communicating with customers are all ways to improve a customer experience without spending extra money. There's also the idea of personalizing the shopping experience. For example, e-mailing customers when a particular item they may like or were interested in is in stock. Remember, a happy customer is one who is apt to return again and again - and also spread recommendations for your store via word-of-mouth.
- Keep customers in the store longer. Come up with creative ways to have customers remain in the store longer, which could increase the potential for sales. This doesn't have to mean applying hard sell tactics. Make shopping in your store fun and pleasant. Host wine and cheese events, entice families with special treats for children, or do something unique. For example, a patio furniture store may want to host a public barbecue/picnic event and encourage guests to sit and try out the furniture.
- Re-floor the store. The first few inches of space and the windows of a store are critical. These are the items that will catch the eyes of passersby and entice them to come into the store. Even if you cannot order new merchandise for the store, change the placement of items so that it looks fresh and new. Also, be sure the store has a practical layout and inviting design. If it's difficult to maneuver through the store to find items, customers may not want to come back.
- Put impulse items by the checkout. Well-placed and smartly priced impulse items can boost sales considerably. A customer already has opened his or her wallet to pay and feels that it won't matter if he or she splurges a little more. Select unique items and stock them near the register to promote impulse sales.
- Identify good and bad costs. Eliminate the bad costs of your business. These may include extraneous items that get in the way of the shopping experience, advertising campaigns that have not generated sales, things that distract customers from the products, etc. Focus funds on good costs, such as talented, effective employees.
- Negotiate with landlords. Renting retail space can be expensive. As a business owner, you can renegotiate rental terms, including getting a lower rate. After all, landlords also are feeling financial pressure and it's much smarter for them to renegotiate than risk losing that revenue due to a closed business. Also, think about reducing the size of the store. Bigger isn't always better if you're paying a high amount for wasted space.
- Analyze customers spending habits. Figure out what customers are buying from you but also what they are buying from other retailers. This way you can stock the items that people tend to purchase elsewhere and make sense in your store.
In a climate of store closings and reduced spending, there are still ways for independent retailers to succeed.
