Traditional stores: The end of an era?
The traditional trade, as we knew it in the past decades, has fallen exponentially, among the main reasons we would find the following:
- The economic crisis has deepened in some countries; the public has lost much purchasing power
- The strongemergence of electronic commerce lowered the flow of traditional store sales
- There is little support from the authorities, which adds support aimed at superstores in exchange for heavy investment by business groups involved
- There isa generational effect: There are a lot of traditional businesses that require a lot of sacrifice and today there is a lack of motivation in this direction
On a personal level, I have run two physical stores in sectors such as fashion and sports equipment and I can assure you is frankly difficult to compete on costs with superstores and eCommerce. Hard to find qualified and motivated to satisfy customers entering the store. Nor do I think it’s all lost in this sector but possibly deserves a broader reflection and a change in strategy for those wanting to enter the world of retail.
If I had to start, again in this direction and taking into account the previous history would emphasize the following points:
1- Before it was key the location of your business but right now I would be much more radical: If you cannot locate your store in the best streets patient and wait your chance. Opting for a cheaper rent thinking you can compensate for the lack of traffic of people with a good marketing strategy can be a big mistake. There are always exceptions but seems very complicated to start with that negative handicap
2- Specialize in product, hopefully separates your business model of large retailers such as Inditex and company. Satisfy a specific market niche can be a good option
3- Suppliers Search that can be strategic. That sounds like straw but what I mean is to look for brands that are committed to your business, you can do joint actions and are close to your problems.
4- Focus on service; this should be practically your biggest concern. Is the service which can differentiate you from other competitors. Talk to your customers, make deals thinking of them, riding activities related to your business and help you be more empathetic to your customers.
5- If you start again in a market you have little experience or just do not know, I’d bet more for one franchise model. Can you reduce a little your profit margin but acquire a well – known brand and the “know-how” needed to get more guarantees
At the end of the day, in a physical store you must humanize everything you your business. When your customers remember your business must be located directly to the people there holding it all. Thus, when it gets to create an emotional bond that may be the turning point that you do take the car and go to your shop to buy.