Retail businesses are central to the makeup of any town or city. From small, local retailers to multi-national chain stores, the industry is hugely dominant and plays a significant part in all of our daily lives.
But despite its importance, there is still an air of mystery that surrounds the popular sector. To help demystify some common queries, we’ve put together a ‘retail 101’ to provide guidance and answers.
In this blog post, you’ll find everything you need to know about the retail business sector; from key definitions to advice on how to drive success in your business.
It might initially seem obvious but defining what is actually meant by retail can help to analyse the business sector as a whole. According to the Cambridge Dictionary, retail is defined as “the activity of selling goods to the public, usually in shops.”
This selling of goods can take place in a variety of ways, such as in-store at a brick-and-mortar location, online, through direct sales or via postal services and it includes anywhere from department stores to corner convenience shops. The retailer is the shop or business that is selling the goods and the consumer is the person who purchases those goods for use.
The variety and range of retail business types are ever-growing and changing, but some main examples include:
Department stores usually have a wide selection of products on offer, from homeware to children’s toys. These large retailers often stock both products from their own range and goods from other companies under the same roof. In the UK, stores such as John Lewis and Selfridges fall under this category.
E-commerce, otherwise known as electronic commerce, involves the selling of goods by electronic means, including on mobile devices and computers. E-commerce is a hugely popular and profitable retail business type, with the UK bringing in £586.3 billion from this type of sales in 2017, according to Statista.
The classic corner shop (or convenience store as it’s also known) is a staple addition to streets in every town in the UK. These small stores stock all of a consumer’s everyday essentials, from milk to biscuits. The retail merchants in convenience stores are often central members of a local community and their businesses are long-standing and loved.
Supermarkets are large marketplaces that stock a large variety of products focused primarily on food and household objects. These stores are very often chain companies with brick-and-mortar locations all around the country and sometimes even around the world. Examples of supermarkets in the UK include Asda and Tesco.
This retail type focuses on offering consumers a specific product type or category that it specialises in. For example, a store offering a selection of women’s clothes would be considered a speciality retail business given the breadth of products on offer to consumers.
Starting a retail business is a challenging but very rewarding process. Whether you decide to open a specialised brick-and-mortar store or an online E-commerce boutique, you’re going to require a lot of planning.
To start with you’ll need a business plan. This will outline a summary of your company’s purpose, mission and vision, while also showing an analysis of the market, your product line and your financial projections. After this, you can hone in on what your niche is and which products you want to sell. Surveys are a great way to drum up some hype around your business and to gain insight into the kinds of products the people in your local area desire, alternatively consumer panels and focus groups are another great option.
In terms of legality and finances, you’ll need to choose a legal structure for your retail business. This will determine how your taxes are handled, how you’ll get paid and your liability. Additionally, you’ll most likely need to acquire financial backing for your retail store. Many banks offer schemes for new business owners and there are a number of loans available. Research what is available to you in your local area to help you and your business get on your feet, mentors can also be excellent sources of guidance.
You’ll also need to decide how to take payments in your retail business. Mobile point of sale (mPOS) devices make great options and choosing a system like SumUp Start means you’ll have access to the SumUp app and cutting-edge hardware, including the SumUp Air Card Reader.
Once you have everything in place, you can look into choosing the location of your retail store (if it will a brick-and-mortar business). Make sure you research neighbourhoods and shopper behaviour in each area to ensure you choose the perfect place. After this, you should get to work designing your store layout and decorating. This can be a tricky task and often requires external input to put together a retail floor plan. Make sure you plan your store so that the customer experience is as good as possible and encourages sales.
Finally, if you have the resources, start hiring and training staff. You should make sure that customer service is always a priority and the focus of your staff training. Even if to begin with it’s you alone in your store or managing your online boutique, the way you interact with customers is very important and leaves a lasting impression.
You’ve opened the store and started trading from your very own retail business - congratulations. Now you can start thinking about how to optimise your sales and begin growing your business. Small changes can make a big difference; check whether your store layout needs to be updated to make the products appear more attractive and test out new incentives and bundle-buys for complementary products.
Schemes such as loyalty, points cards can drive customer affection for a brand or store and encourage repeat visits, allowing you to grow and make your retail trade more successful. Also, try to incentivise your employees by making them more knowledgeable and passionate about the products they are helping to sell–the more they care about the items in the store, the better they will be at talking to potential customers about them.
You could also consider boosting the image of your retail business by hosting events or joining fairs in the local area.
Running a successful retail business means you’ll be up against a lot of challenges. From rising rental prices on storefronts to omnichannel shopping, retailers need to constantly adapt to keep their heads above water. By using a modern mPOS system, you’ll be able to keep up with the latest in trends and technology to make sure that your payments system is always reliable and up-to-date.
Other challenges include a rise in competition between more niche specialised stores and online. With this in mind, it’s more important than ever to make sure your in-store or online experience is as good as it can be. You can also stay on top of retail changes and important news by following industry blogs such as Retail Customer Experience.
With SumUp, your retail business will have the best chance of success.