The retail industry is highly competitive, with businesses fighting for the attention and loyalty of customers. To thrive in this environment, retailers must continually evolve and adapt to the changing needs of their customers.
To survive, you’ve got to have a great product, a good staff, and a unique selling point. You also need some clear goals to reach. Setting dynamic goals for your retail business will help you stay focused and motivated. We you set business goalsyou take a step closer to reaching your entrepreneurial dreams. But which types of business goals should you be setting as a retail store? This article will explore seven essential goals that every retail business should focus on to stay ahead of the competition.
1. Get Noticed
The very first goal you should set as a retail business is to get noticed. The is an especially important goal if it is your first year in business. The retail business model is one where if nobody knows you exist, nobody will walk through your doors.
Make sure to use attractive and clear signage on your storefront. Also, utilize banners, flags, and other attention-attracting items in the parking lot of your retail location. This will help draw attention to your store from commuters and those walking by.
You should also use paid marketing and advertising methods to get the word out about your store. Depending on your type of retail business, traditional marketing methods could work well. These include things like billboards, radio ads, and flyers. However, just because you have a retail business does not mean you should eliminate online marketing strategies. Don’t neglect social media, YouTube ads, and other online advertising options to help drive foot traffic.
Finally, be a part of the community. Try sponsoring local school events, participating in fundraising efforts, and attending local festivals. All of these will help increase brand awareness with current and potential customers.
2. Offer Exceptional Customer Service
Customer service is the backbone of any successful retail business. Without good customer service, your customers will walk out your doors and never come back. According to one survey, 61% of consumers have switched to doing business with a competitor following a poor customer experience. Now, can you imagine what would happen if you lost 61% of your customers tomorrow?
The experience your customers have in your store will determine whether they become loyal to you or simply move on to the next shop. Exceptional customer service means going above and beyond to meet your customers’ needs and create a memorable shopping experience.
Here are a few ways to ensure your customers are getting the best experience from their visit:
- Train your staff in effective communication– Coach them on how to speak to your customers in various situations. Equip them with the tools they need to answer questions, address concerns, and handle difficult situations.
- Empower employees- Give employees the power to make decisions that benefit the customer. Give them the ability to offer discounts, waive fees, etc.
- Personalize the customer experience– Use their names and remember preferences. This demonstrates that you value them as individuals.
- Seek feedback from customers regularly– Use this feedback to identify areas for improvement and implement changes accordingly.
3. Improve Store Layout
Although this may seem like a non-financial business goal, it isn’t. The layout of your store plays a significant role in the overall shopping experience. When designing the layout of the store, keep in mind it is not about what you like, but what the customer likes. Make a goal to optimize your store layout to give the customer the best shopping experience and maximize sales. An effective store layout should be visually appealing, easy to navigate, and strategically designed to encourage sales.
For example, how are you using your “power wall”? The power wall is the area immediately to the right of where the customer enters. Many studies suggest that customers tend to veer to the right when entering a store. This could be because the majority of the world’s population is right-handed. Whatever the reason, you should be looking at your layout and make it a goal to optimize it for sales.
There are a few ways to do this. First, monitor and analyze customer traffic patterns. Are your customers actually veering right when they walk in? Or do they walk straight forward and to the back?
Perhaps there is something that immediately catches their eye when they walk in. Whatever their tendencies, evaluate them to see if there are opportunities to improve.
Another way to improve is by creating focal points and displays to showcase new or best-selling items. This will draw customers’ attention to these products and encourage impulse purchases. There are many challenges to running a retail store. But don’t let your other responsibilities distract you from making improving your store layout one of your most important retail store goals.
4. Identify Best-Selling Items
Previously, I mentioned that your layout should include prominently placed best-selling items. However, in order to do that, you need to identify what those items are. Many retail store owners assume they know what their customers like. But, consumer tastes often change quickly. As a retail business, you need to identify which items are selling well currently.
There are several advantages to knowing which items sell the best. And not all of them have to do with just sales. Identifying and capitalizing on your best-selling items can help increase customer satisfaction. By understanding which products resonate with your customers, you can make informed decisions about inventory, pricing, and marketing strategies.
Look for patterns and commonalities among your top-selling items. Why are those items selling the best? Are they similar in price, style, or color? Maybe there are items that sell better with certain demographics. Talk with your customers directly or use sales data to learn more about how well the items you sell are resonating with customers.
5. Manage Inventory
One of the biggest challenges of the retail business model is managing inventory. If not done correctly, a retail business owner can have a warehouse full of products while losing thousands of dollars a month. That is why managing inventory wells should be a high ranking goal for a retail business. Efficient inventory management is crucial for retail businesses to minimize costs, reduce waste, and ensure that products are always available to meet customer demand. A well-managed inventory system will help you maintain the right balance between understocking and overstocking, ultimately leading to increased profitability.
To manage inventory well, you’ll need to implement an inventory management system that tracks product quantities, sales trends, and reordering schedules. This can be a digital system or a manual one. It will really depend on your business’s size and complexity.
Another good practice to manage inventory well is to conduct regular inventory audits. These audits help to verify the accuracy of your inventory records, identify discrepancies, and adjust your inventory levels accordingly.
6. Hit Profit Margin Goals
You may have set sales goals for your business and hit those goals. But it is important to also set profitability goals as well. And, those goals should be in line with the sector of business your store is in.
Different businesses have different profit margin averages. While your store may be killing it in sales, you may end up hurting yourself if your margins are too low. Here are a few of the average profit margins for retail stores by sector:
- Education: 41.15%
- General Electronics: 26.53%
- Food Wholesalers: 15.49%
- Women’s clothing: 46.5%
- Shoes: 42.6%
- Supermarkets and Grocery Stores: 28.8%
- Pet Supplies: 43.6%
Find out the profit margins for your sector and make it a goal to reach that amount or more.
7. Sell Online
This last goal is an important one. Just because you own a physical retail store does not mean you should restrict yourself to sales at your brick-and-mortar location. Many retail small businesses just use their websites and social media profiles to help drive foot traffic. However, this approach limits the potential of their businesses. We’ve also seen how the recent pandemic hurt stores with only a physical presence.
The world of ecommerce has evolved so much that just about anything can be sold online. Take a look at your retail business model and make it a goal to create an online presence that will generate sales. Look at your best-selling items and see if those items can be sold to your customers directly, on Amazon, or niche sites like Etsy.
Before launching your ecommerce store, begin to collect email addresses from customers interested in purchasing from you online. Then, send out monthly email newsletters until your online store is ready to launch. Once it is, make the big announcement and watch the sales soar!
Achieving success in the retail industry requires a proactive approach to managing every aspect of your business. By focusing on these seven essential goals you can create a strong foundation for growth and long-term success. Remember that the retail landscape is constantly changing. And, staying agile and adaptable to new challenges will be crucial to maintaining a competitive edge.