8 Key Elements For Understanding Retailing
Updated: Oct 2, 2022
if you’ve determined that you want to set up a retail business, you’re going to need some specific success strategies. In this article on the #startwithKenga series, I introduce you to what I call the 8-Point Retail Filter. This filter is a list of the eight basic elements which are essential for running a retail business.
Most problems in running a store can be traced back to one of these eight elements. Unless each area is running efficiently, your business will have problems. On the other hand, if you address these eight points consistently and thoroughly, your business will succeed.
Retailers use these eight elements list to analyse the workings of their businesses; that’s why it’s important for you to be able to identify the eight points and use them to evaluate your business. The 8-Point Retail Filter helps you understand the retail business, focus on the details of retail, and set goals to bring your business to the next level. Be sure to sift every retail decision through this filter.
In the list that follows, I briefly define each point in the filter and then pose questions for you to ask yourself whenever you make a decision that pertains to your business;
As you probably guessed, this is the stuff that your store sells. What kind of product will your store carry? Are there any special lines of this product that you’d like to carry in the future?
This is what your store looks like, inside and out. Don’t fall into the trap of just letting this aspect of your store “happen.” What feeling will your store’s atmosphere convey? How will you display your product?
This is how your store is run. Over the years, innovative procedures have produced revolutionary concepts (such as drive-thrus, supermarkets, superstores, and e-tail sites) that have changed the face of retail. How will you do the everyday things you do? How will technology and the Internet affect the way you get things done? What goals will you work toward in this area?
This is how much you sell your product for. Will your store be a discount store, a premium price business (a la Tiffany’s), or something in between? How often will you have sales?
This is how your store advertises and markets itself to the public. How are you going to tell the world you exist? Will you have non- sale promotions, as well as price promotions?
This is how much money you make from selling your product. Don’t leave this item to your accountant — it could put you out of business. When do you plan on turning a profit, and will you be drawing a salary? What system will you use to remain informed of your profitability?
This is the staff you hire to do everything from sweeping the floors to ringing up the cash register to filing your taxes. Your success depends on the team you put together. Who will you hire, and what will their roles be? Who will train your staff?
This is how your store distinguishes itself from others like it. Brand often plays a major role in why a customer chooses one store over another. What will customers associate your store with? How will you promote your brand?
This article is the sixth article of our Start with Kenga series, under the How retailing works sub-category. The content of this series is deduced from the Retail Business Kit hand book. You can follow the entire series #StartWithKenga or the sub-category #HowRetailingWorks.
Overview of Start with Kenga Series
From the challenge of finding the right products to sell, to the thrill of buying it, and the excitement of unpacking it and showing to potential customers what you have in store, retailing can be one of the most exciting and exhilarating experiences you ever have. Nevertheless, 15% of all new retail businesses on average fail within the first two years. Why? Because people don’t spend enough time learning about selling products in order to understand whether it’s right for them. This doesn’t have to happen to you. Retail business is a wonderful business — if you’re the right person for it. In this series, I'll give you an idea of what the retailing is all about so that you can decide whether it's right for you.