For small retailers to compete with their larger competitors, they need to follow five key principles,
There are many retail principles that have been adopted and developed over time. The purpose of this article is not to discuss these principles, but merely to highlight a few of the important principles at the start of your journey. This introduction will help navigate you to the right place in order to start your journey to achieving your potential in retail.
Principle 1: The customer is the most important person
The customer holds the key to every successful retailer, and to master an understanding of your customer there are many processes and procedures you could follow.
Therefore, the main retail principle to master is the customer; the customer should be the centre of your business and everything you do must revolve around that customer. Knowing them, and focusing on them in everything you do, will help you grow your business and your team – The Customer is King.
Principle 2: Retail is detail
One of the most famous principles in retailing is, of course, ‘Retail is detail’ – this is where the challenge lies: how do you become more detailed and what detail should you focus on? You need to start to address and improve your understanding of your customer, and the details of running a retail business. Every retailer must focus on the detail and get the detail right the majority of the time. Mistakes are OK, but you must learn from them and do not repeat your mistakes. Customers will allow you some mistakes, but too many will turn them away; understanding the detail is a key skill to master in retail.
Principle 3: Understand the 4 Ps
This is a very old principle but still has validity – most people have heard of the principle from school, college or university. This retail principle will help you understand the overall foundations of a retail business; the 4 Ps: Product, Price, Place, Promotion. These are the main areas you need to perfect for a customer, to provide them with the basic foundations of a successful retail business.
Product – You need products that your customer wants to buy and a product range that will satisfy your customers’ needs, wants and desires. The products must also deliver a profit for you to have a successful business.
Price – Price must be consistent across the whole marketing mix and meet all requirements for your business. You need to price your product range at the correct level for the customers to be able to buy your products, and for them to gain value from your products. This could mean pricing high or low – this very much depends upon your customer offering.
Place – You must provide somewhere for your customers to purchase your product, be that a physical store, a catalogue or an E-commerce website; there needs to be a place for the customer to visit (in person or virtually).
Promotion – Once you have a product – at the right price, in a place where the customer can access it – you need to tell them about this and promote your business and your products; make sure your customers know that you and your products exist and are available for them to enjoy.
Principle 4: Go the extra mile for your customer
Providing great customer service starts with understanding and knowing your customer; however, knowing them is the start of the journey and you will need to deliver more than just customer service. To be successful you must deliver world-class customer service; you must ‘go the extra mile for the customer’. This principle is founded on years of experience with customers and working with many different teams that provide customer service. Having a total focus on the customer is the start, but to provide ‘world-class customer service’, you and your team must continually go the extra mile for the customer, each time delivering just a little more than they expect. Doing this each time you and your team interact with your customers will win them over and make them loyal over a long period of time.
Principle 5: Location, Location, Location
We mentioned Place above and the final retail principle I will introduce at this stage of your journey is: Location, Location, Location. History has dictated that this is one of the most important factors in the success of a physical store, and still to this day it will have a major impact on your success. The best location of your store will be dictated to by your brand and product strategies – i.e. what you intend to sell will affect the location of your store. For example, a supermarket operation needs a car park and a high fashion store needs to be in a high fashion area that attracts the right customers for the store. I would argue that location has less effect now than previously, due to two main factors: the first being the flexibility of the customers; now we often travel more, to more varied locations than historically.
Secondly, and most importantly, the internet has changed our shopping habits and will continue to do so. The internet and E-commerce websites have opened up the world of ‘non-geographic’ retail – a retail world without the need to visit the physical store. The emergence of ‘etail’ from ‘Retail’ has been the biggest change over the last 20 years and will continue to transform retail over the next 20 years and more.
You will notice that ‘etail’ has always been part of the word ‘Retail’ - the journey from retail to etail has been quick, and we need to embrace the world of etail and ensure we understand its effects on our customers, today and in the future. The retail world is growing significantly and with new technologies, such as iPads and m-commerce (using mobile devices to access the internet and buy products), will continue to change the shape and opportunities in the world of retail.