The basic premise of the retail business is simple—you buy an item at wholesale and sell it for more than you paid for it. Unfortunately, being successful in retail isn’t as easy as that!
To be successful in retail, you need to understand the six Rights of Retail.
- You must have the right item…
- in the right place,
- at the right time,
- in the right quantity,
- at the right price,
- with the right service.
I don’t take credit for inventing this. These six items have challenged retailers for years, defining the business and demonstrating just how much more there is to retail than just selling an item for more than what you paid for it.
Getting the Rights lined up perfectly for your store can take years. But that time can be reduced with proper planning and by accumulating sales data so you can react quickly to your customers’ demands.
What will be your basic operating strategy?
We often see retailers trying to follow a strategy of being good at everything. This approach does not work well today. Too many smart, aggressive retailers are offering customers shopping alternatives that are distinctly superior in one important aspect of the business—assortment, price, or service—while remaining highly competitive in the other two.
Adopting a specific marketing and operational strategy gives these stores a competitive advantage. It adds value to the products they sell and makes them stand out as superior to the competition.
This ability to focus resources in a single strategic direction is the reason why some stores succeed and others fail. The successful stores know where they are going and how to get there. The others usually lack a viable plan for achieving their goals and wind up being mediocre at everything. They fail to distinguish themselves in their customers’ eyes, and they fail to meet their customers’ needs.
Developing your unique secret weapon
You should develop your secret weapon based on the needs of your customers. This is the one thing that separates you from your competition and drives customers to choose you. Your ultimate success or failure could very well depend on discovering your secret weapon and answering the following questions:
- Why should a customer shop in your store?
- How competitive is your pricing?
- What assortment of merchandise do you offer?
- What level of service can you provide profitably?
- What is your secret weapon? What is the one reason your customer will buy from you rather than your competitor?
Your responses indicate what is important to you and what isn’t—what your business is going to emphasize, and what it isn’t.
Consider your responses in the context of the following eight-point retail filter:
- Product. Will the merchandise you carry be the most important aspect of your business?
- Presentation. Will the way your merchandise is presented and the overall look of your store be a distinguishing factor?
- Procedure. Will the way you serve your customers be the element that sets your store apart from your competitors?
- Pricing. Will the price of your merchandise determine your focus?
- Promotion. Will your advertisements be something your customers talk about?
- People. Will the type of people that you hire and the training that you make available to them become your focus?
- Profitability. Will profitability determine your business decisions? (You have to say yes to this one!) Financial considerations can prevent you from doing things that could change your focus. But they shouldn’t stop you from getting the store that meets your needs.
- Brand. All of these considerations make up your brand, and help you and your customers identify your business and understand its position.
Figuring out the answers to these questions will help you focus your retail efforts and greatly increase your chances of retail success.