Whoever said that it’s a jungle out there must have been talking about retail sales. It can be a ruthless and cutthroat
business, fighting for consumers’ dollars. It’s also usually expensive to open a retail store, with build-out, inventory, and fixture costs, but the rewards are there if you plan and execute correctly. The retail business is fun for some people and a nightmare for others, so you must decide which type of person you are. When you’re having fun, it’s always easier to make profits.
Many people open retail stores when they leave corporate positions and want to have more control over their future. In the case of corporate layoffs, these can be abrupt decisions with little or no planning, and that’s one reason why the failure rate for new retail ventures is so high. You might be jumping feet first into a market where your competitors have much more experience and have already established a position.
This is not to say that your retail venture won’t work and be a success, but you need to plan a strategy. You created a job for yourself by investing much of your savings, and you want it to pay off. You need to offer the consumer—the public—new and better products and services; otherwise, why should they buy from you? Should they risk their money and time on an unproven store just because it’s now open and has an attractive sign? No, they shouldn’t.
Getting and keeping retail customers is kind of like chasing a fly around the room; soon after they settle in one spot, they’re off again. Retail customers are capricious and fickle; it’s just part of the business. What they loved yesterday is no longer their first choice today. They will try new stores and respond to advertising, but if the store doesn’t measure up, they will go back to their old favorite. You want to be that old favorite regardless of how big or small you are.
I know a jeweler in our city who never advertises anymore. He only gets new customers by referrals, and he keeps 90 percent of his existing customers. He’s not the lowest priced jeweler in town, but people love the personal attention he gives them. I took a ring to him that needed to be sized down, and he did it in 10 minutes at no charge. I didn’t even buy this ring from him, although I had bought several other items from him in the past. He had the time, and it didn’t really cost him anything—and in providing that service for me, he made me a long-term customer. He could grow and get bigger with advertising, but he’s content with his business the way it is.
An owner can’t always be there when situations like this come up, but as an owner you should hire only employees that provide the same excellent service you would. Train your employees to react the way you would under similar circumstances. If you like retail work, serving customers, hiring and training employees, and sometimes putting in long hours, let’s look at some ways to maximize your profits.