In order to achieve successful long term growth, leaders of retail companies need to define a vision of “where the company will be” or its “destination” at some future date. Whether the vision is based on revenue, number of locations or profit level a retail company can only achieve future success if that future success is defined.
The start of the new year is a great time for company leaders to review the company’s current position and to evaluate existing growth plans and strategies and to update plans based on past success and current market conditions.
Well defined procedures, processes and reports are essential to grow a small (or large) retail business. The adage that we can only evaluate that which we measure is true for, and critical to, the success of small businesses.
In over 30 years of retail development experience, on both the developer and retailer side of the table, I have witnessed too many retail expansion plans that are reactionary rather than strategic. All too often retailers develop a location because “it is available” rather than because “it is where we want to be”. Both small and large companies are susceptible to this failure. Small retailers because they may not know where they need/want to be located and large retailers because they need to “make the numbers”.
Knowing the five “W’s” and an “H” of journalism can be applied to new store growth:
Who is our customer – knowing who buys, or is likely to buy, your product or service is the starting point for a successful growth strategy.
What are the geographic criteria that lead to successful locations – what are the site characteristics that good locations have in common. Maybe, as important, is knowing characteristics of poor sites, so you can eliminate them as potential locations.
Where you want to be and where your customers are located – knowing where your customers come from immediately before visiting your location, and where they go immediately afterwards helps you identify key traffic generators important to sales success.
When are you ready to develop a market or location – enter a market or location too soon, or in the wrong format, and you may not be able to sustain the business until the market catches up to you. Enter a market or location too late and you may be out-positioned or have too much competition. Is company development appropriate or should a location be developed by a franchisee?
Why the location will be successful – does it meet our demographic criteria. Are there sufficient number of potential customers to create sales sufficient to earn an acceptable return on your investment. I think of the previous four “W’s” as numbers and the “Why” as the narrative.
How do we secure the correct site – lease or purchase, do it yourself or hire professionals, use in-house personnel or outside consultants.
I wish you successful and strategic growth in 2017!