Small retailers who are succeeding, typically sell a very high quality product, they market to a niche customer, and they provide an extraordinary level of service that the “big box” stores can’t match. They make their store the place to be and understand the numbers behind the business. The advantages and the knowledge you can gain by knowing your market, knowing your customer and building a strong financial strategy may help you rise above your competition in ways you never thought possible.
It’s difficult for a small retailer to compete with an online or mass merchant using price, selection and convenience.
Fight where you can win! Identify where you CAN compete. Pick your battles wisely and set up a plan to determine your store’s strengths & weaknesses.
Know your market: You can dominate your market when you define your physical market. Generally your customers will come from a 5 mile radius around your store. Use data to define your market area. Map the locations your customers come from. Define your market as the area with the greatest concentration and contains at least 75 percent of your customers. Once you define your area, spend your marketing dollars in that target area only.
Know your customer: You must know how customers found out about your store. Record their name, address, email and phone. Consider tracking purchases by customer. Find out how they want to be contacted. You can do this at check out by training your staff to ask the right questions.
Know your business: Stay financially sound. Control your expenses and solve problems quickly. The financial information you keep on your store tells the story of how your business is doing. Control your inventory. Inventory control is the single biggest reason that retailers fail. Sustain your gross margin and track your inventory turn over rate. You can actually increase your inventory turn over rate by decreasing your order and ordering
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