Are you a retailer running a store successfully for many years? That is something to be proud of because only 50% of businesses last over five years *. However, your mission does not end there to ensure long-term success. Once you have found stable business growth, the next step should be to grow your retail business.
With increasing urbanization and increasing buying capacity for consumers, expect more retail consumption to happen across all regions. In fact, as per a source from BCG and RAI, the retail market is forecasted to have a $2 trillion annual opportunity in the next decade with the retail market expected to continue to grow at a rate of 9–10%.#
It is the right time to focus on strategies to grow your retail business. If you're stuck on how to start growing, here is a guide to help you steer your business towards growth and achieve resounding success.
Table of contents
- Common constraints when growing your retail business
- 10 ways to grow your retail business
- How Gofrugal can help grow your retail business
Common constraints when growing your retail business
Before you get into the strategies that will help you grow your business, it's best to become aware of some of the common problems retail businesses face as they push for growth.
Stiff competition
The retail industry has become more competitive as more stores are popping up daily, with retailers finding many ways to lure customers to their store. Even if you have been in business for decades, you should look for opportunities to retain and attract customers and grow your business further.
Lack of technology adoption
With the rise of online shopping and a preference for hybrid shopping experiences by customers, it has become important to look for more ways to service customers instantly with the help of technology. Retailers who do not adapt to evolving technological changes and do not adopt the latest solutions are left behind.
Difficulty to rotate cash flow
Good businesses are those who can use their on-hand inventory better and rotate their cash flow. Not having an inventory turnover ratio of even five is a worrying sign, and it can potentially decelerate the growth of your retail business.
Wrong business decisions
With retail being a customer-centric sector, any marginal error made can harm operations. Key business decisions should be made with caution since they impact the supply chain.
Losing track of the supply chain
Lack of transparent mechanisms across the business and the inability to track the supply chain with proper tools can lead to losing sight of key operations. It can lead to poor insights on business and, thus, incorrect business decisions.
10 ways to grow your retail business
Now that you're aware of what can impact your plans to grow your retail business, consider these 10 strategies that, when implemented properly, can help you successfully expand.
1. Comprehensive data analysis
First, understand how your business is performing so you can set correct, achievable goals to grow your retail business with your current capabilities. Analyzing your business is a continuous process that provides clarity on if you are heading towards business growth.
Do an in-depth analysis of your sales movement of best-selling and least-selling items, purchase history, supplier performance, inventory distribution, and outlet-wise performance for a broader business perspective.
2. Understanding your customers
One size does not fit all. The tastes of each customer are different. The more you understand your customers, the easier it will be to service them better. Conduct surveys, gather feedback, and get suggestions from customers to implement effective strategies that align with their preferences.
Observe customer buying patterns, derive demographic insights, and analyze purchasing behaviors to offer a more customized shopping journey. Understand the psychographics of different types of customers to tailor product offerings that appeal to all of them.
3. Optimize your operations
Effective inventory management plays a crucial role in optimizing operations. Procure items in bulk to reduce input costs, do production at a central place, and ship them when required to reduce logistics costs, inventory carrying costs, and waste.
Segment items based on ABC analysis, do regular stock audits, and monitor stock levels and sales at store level. Transfer items between stores if available first, and then plan your purchases to keep cash flow under control. Streamline processes and automate a few time-consuming tasks to ensure smooth operations and increased efficiency.
4. Improving in-store experience
Customers like to visit stores repeatedly only if the first impression is pleasant and welcoming. Keep the store layout organized and spacious with clear signage and orderly item placement for customers to find items easily. Have bright lighting, enhanced visual merchandising, and an appealing store ambiance to encourage customers to shop with you.
Focus on good customer service, ensure quick checkouts, and provide self-checkout aisles for smooth in-store shopping. These personalized shopping journeys can ensure customer satisfaction, increase repeat customers, make them spend more time in your store, spread positive word-of-mouth marketing, and lead to retail business growth.
5. Expanding retail locations
Opening multiple outlets boosts brand visibility, provides convenience for customers to shop from nearby outlets, increases customers, and spreads business risk uniformly. Ensure no two outlets are near each other so you tap into a different customer market. Test the waters with pop-up stores, which can help save costs and gauge the market before you make a big investment.
Do proper research, understand market demographics, and decide on storage space in advance. Choose the type of location (mall, shopping center, business hubs, and more) for the business. Ensure the outlet is easily accessible and located in a busy area with good street lighting. Consider buying another business or franchising your business as alternatives to expand and grow your business.
6. Leveraging ecommerce for business
Ecommerce is the easiest way for customers to shop with you as it requires less labor, shorter setup time, and less investment. It provides convenience to customers to shop anytime and increases your sales revenue with 24/7 ordering flexibility. An even easier way is to list your products on third-party marketplaces like Amazon and Flipkart and start selling quickly.
Ensure your ecommerce site is easy to use and SEO friendly, with quality product cataloging, reduced load time, and a responsive design for easy navigation and quick checkouts. Link your ecommerce site to your social media channels to increase brand awareness. Embrace omnichannel integration with real-time inventory sync and price consistency for smooth shopping experiences, too.
7. Grow your product and service offerings
Before you diversify your product portfolio, do research, test the products with minimum investment, analyze your sales, collect feedback, and expand sales. Add new products and services that interest customers to grow your retail business. Provide free samples or bundle new products with existing ones as a kit and track customer interest.
You can repurpose existing products by repackaging them, renaming them, and selling them with a different strategy. If customers like a product, procure it and start selling it commercially. Expand more by adding different variations of the same product or upgrading the same product.
8. Implement marketing strategies
Customers are mostly online and have various choices to shop from. You have to market your store, draw attention, and build brand credibility for customers to shop with you. Adopt online marketing such as paid advertising, targeted campaigns, search ads, as well as offline marketing such as flyers, newspaper ads, and billboards to attract customers.
Capture customer contacts and promote your brand via email, WhatsApp, and SMS by sending targeted promotions, new product updates, new store updates, and more. Utilize social media to increase brand awareness, build a community, and make sales cost effectively. Create compelling and SEO-friendly content and promote on all channels to increase sales.
9. Run loyalty program and retain customers
Acquiring a new customer is costly in retail, so you never want to lose one. Loyalty programs are like gratitude gifts that encourage customers to continue shopping with you. Reward loyal customers with loyalty points, incentives, and personalized offers through comprehensive CRM. Notify regular shoppers about special offers and make them feel valued.
Provide surprise gifts, discounts coupons, and vouchers to encourage customers to buy from you. Encourage referrals by providing rewards as it helps your business with cost-effective word of mouth marketing. Implementing these loyalty program strategies helps boost sales, increase customer retention, increase lifetime value, and grow your retail business.
10. Partner with local businesses and influencers
Form partnerships with like-minded popular brands to cross promote your businesses mutually, increase your customer base, and grow your retail business. It is a cost-effective way to market your products to a new audience with the least investment and shared resources.
Partnering with influencers and brand advocates aligning with your brand values provides a wider reach, enhanced brand credibility, increased customer traffic, and more sales. If affordable, you can also sponsor local events to increase brand awareness.
Bonus tip: If you want to sail a ship towards a specific destination, you need a proper map to guide you in the right direction. Similarly, if you want to navigate your business towards growth, you need a well-drafted plan to get you there. If you do not have one or want to learn more about expansion plans, check out our blog on business expansion plans to gather insights and grow your business.
How Gofrugal can help grow your retail business
When you're trying to grow your retail business, it's important to have the right tools at your disposal. An ERP solution like Gofrugal can help you move in the right direction while staying organized and in control.
Easy horizontal and vertical expansion
Expand your business horizontally by setting up multiple stores across different locations and managing operations centrally with complete business control. Enjoy quick and easy deployment of our ERP solution as your business expands. Grow your business vertically with superfast billing counters, mobile apps, and flexible integrations.
Expand your online presence
Integrate your business with ecommerce brands and marketplaces to increase brand visibility, receive more orders, and boost sales. Get your business listed in the ONDC network, a revolutionary initiative that enables your business to be visible to a larger audience in the regular mobile application which they consume daily, at zero marketing cost and with convenient policies.
Adopt a comprehensive ERP system
Handle all business operations, such as sales, purchase, inventory, production, offer management, loyalty, CRM, accounting, GST filing, and more from a single, holistic ERP software. Get a complete view of your business from anywhere with real-time smart reports and make informed business decisions.
Provide an omnichannel experience
Open a virtual store without any physical space and allow customers to place orders through your own online ordering app - OrderEasy. Provide a hybrid shopping experience to customers to buy items, make payments, and pick up items at their convenience. Manage home deliveries with real-time location tracking with home delivery management app - GoDeliver.
Implement smart technologies
Automate your purchases with the AI-based autonomous reordering solution, The Eye, that allows you to run five stores at the cost of four with 15% lower inventory capital. Use Exclusife CRM to manage your customer data, run targeted WhatsApp campaigns, attract customers, increase walk-ins to your stores, and grow your retail business.
Growing a retail business is a gradual and continuous task that requires careful planning and execution of strategies. Although there are several strategies, those highlighted here, when put into action, can help you grow your business. Should you require a more personalized consultation to grow your business with Gofrugal, get in touch with us today.
Source: *Korona POS #Recent report by BCG and RAI on Unlocking the $ 2 Tn retail opportunity in the next decade