There are too many retail stores with a very short life. They start to feel problems in their first year of operation and many of them simply close their doors. The question that I hear is how retail stores can implement sales improvement.
There are many reasons why many retail businesses have a very short life. But, one reason that is most usual is the lack of customers. Without customers, you will have a bad cash flow and you cannot cover the basic operating costs of your business.
Why Are Retail Stores Lacking Enough Customers?
Before I continue with 10 practical sales improvement steps, I would like shortly to present some reasons for the lack of customer:
1. Poor market research.
Without appropriate market research, you cannot have the knowledge about your customers, their needs, their habits, and their ways of money spending. Because of that, you cannot know how to sell to them, and probably you cannot satisfy their needs.
2. Inappropriate selection of location
If you don’t make the analysis of your location where you want to start your retail store, then probably you will quickly after opening your doors, realize that you don’t have enough traffic. Less traffic means fewer people will notice your retail store, the fewer people that will enter the door, and fewer people that will buy anything from you.
3. Insufficient promotion
If you don’t choose the right promotional tools, the potential customers will not know that exist something like your store on the market. Also, if you don’t attract their attention, they will continue with their previous habits of buying from your competitors.
4. You don’t understand your industry
You cannot sell something that you don’t know. Some people have knowledge about fashion and those people will be an excellent retailer for clothing. Another person who has excellent knowledge about the car industry can be an excellent car spare parts seller. If you don’t have knowledge of your industry you cannot choose the right products and you cannot recommend the right products to the customers. Because of that, you will have insufficient customers, and also your money will be invested in products that cannot be sold.
These are some basic but most influential reasons for the lack of customers not only in retail stores but in all businesses.
Exponential Sales Improvement in 11 Easy Steps
The basic steps that you can implement and will bring you exponential sales improvement and at the same time increasing business potential energy are the following:
1. Analyze yourself
Starting a new business is not only sitting in the store and selling. Do you prepare enough yourself for such efforts from your side? Do you have sufficient knowledge about finances, marketing, planning, selling, supplying, inventory, and other things? Are you prepared to discard your current habits? You must answer these questions before you start your retail store business.
2. Create a winning business plan
Your business plan will convert the business potential energy stored in your business idea into a profitable business. You need to plan all things that you must do, especially what you will do to achieve sales improvement. If you want to succeed you must have a winning business plan that will help you to make better decisions for your retail store.
3. Analyze your industry
You must know the main local, national and global players in the industry. What products are most wanted products? This analysis will give you the basic guidelines for the future of your business.
4. Analyze your current and potential customers
This analysis must be related to your customer’s needs, habits, and behaviors when they are buying. When you know them you can offer something that they really need. So, they will continue to buy from you. You must remember that you exist because of them, they don’t exist because of you. If you want to achieve sales improvement, you will need to know your customers.
5. Constantly analyze your cash flow
Without enough cash flow, your business can start to move into a disaster. You need to spend as much as your cash flow will allow you to spend. That is one of the most important rules in business. Always try to have the positive cash flow or enough money on your account. Your business can make a profit, but also can fail because of insufficient cash.
6. Build and continually improve your image
Your business image is what your customers have in their brains about you and your business. Your image is created through your product, logo, promotional materials, the way how you are doing business with them, prices, location… A good business image will bring you more customers to your retail store.
7. Select the right pricing system
Pricing retail product is a combination of art and science. How much you will price your products in your retail store will rely on the products you sell, your business image, and the services that you offer. But, you must remember that the prices you will use must cover all expenses and bring profit to you. You cannot measure competitiveness only with the retail product’s price. There are many small businesses that close their doors because of the wrong pricing system that they implement.
Before pricing any product, it’s crucial for a business to examine the factors that will help determine the retail pricing strategies.
8. Control your inventory
You must build a system for inventory control that will enable you to have a minimal or optimal level of inventory in your retail store. The high level of inventory means a low level of cash for your company. If you have a higher level of inventory, you will probably start having problems with your cash flow. If you analyze your cash flow, you will quickly see this happening.
9. Use each possible opportunity to promote your retail store
Good promotion is not only your advertising on radio or TV. Everywhere where you go, promote your business giving your business cards, promotional material, brochures, flyers… Talk with people about your business and your offers. All of these activities will bring you more customers to your retail store.
10. Ask for help when you think that you need it
Too many activities are depending only on you. Sometimes it is better to spend some money on someone who will help you with advice rather than sit and watch how your business fails. You must remember that you cannot be an expert in all fields.
11. Improve Communication
You can’t transform your retail operation and improve sales until you have the full support and cooperation of your team. This involves more than hiring the right people. You need to motivate employees and engage teams. To do so, you need solid communication. Your team members need the right information and direction to focus on the right work. Don’t be afraid to create new systems, modes of communication, or use collaborative tools like Basecamp for project management or Zipline designed specifically for retail communications. With proper store communication, everyone can get on board to improve sales and profits.