The small steps small business retail growth strategy is about taking regular small steps in your retail store which compound in a way to dramatically enhance the value of each of three key components to the business. The key is that the business makes progress on one or more of three business growth levers every day:
- More traffic.
- More revenue in each sale – greater sales efficiency.
- Better margin.
There is no grand plan needed, no master document full of words and charts. The small steps strategy is about simple achievable steps which and retailer can take in any type of business every day to build a stronger business.
The small steps strategy is made up of the following work for the three levers:
1. More traffic, new customers, existing customers revisiting
a. Consistent traffic generator promotion. Regularly promote a popular consumer product or product category outside your business – to attract new traffic. The product category will depend on your business. Ideally it will be habit based product for which you have a strong value proposition. A good percentage of customers you win from regular promotion are more likely to visit again. These customers are often worth more than what they purchase.
b. Regular participation in catalogue and flyer based offers. They could be catalogues covering a numbers of businesses or just for your business. These do not have to be expensive. Even flyers you make yourself and copy in house can work – having compelling offers is key with catalogues and flyers.
c. Regular local newspaper advertising. Local newspapers will usually do deals if you offer a long term commitment.
d. Support for local sports clubs and community organisations. For a few dollars you can have your business name promoted at games, in newsletters and at events.
e. Branding of at least one vehicle. A couple of hundred dollars can get your name out in the community – everywhere you drive.
f. In-store newsletter. Delivered outside the store. This is best done on a simple stand near the entrance to the store.
g. On your window and walls. Use your front window and side walls to promote your business. The right campaign ought to bring people passing by into your store.
Through a consistent program of chasing new traffic you ensure the health of the business and protect against the cost of the natural loss of customers.
2. More revenue from each sale – greater sales efficiency
Here are some simple strategies for achieving more from each sale.
a. Uncluttered counter. Make conscious decisions about what is placed at the counter. Ensure clear air around each offer so it can be seen. A cluttered counter can hide good deals and block sales.
b. Counter offers. Choose good margin low price products which work for your demographic by tapping into interests, desires (chocolate to eat on the way home) or value – quick decision small gift lines. Remember, a counter must be easily understood and be able to purchased quickly.
c. High traffic bargain offers. Between the entrance and the highest first stop for traffic into the business have at least two dump bins or displays with compelling and easily understood offers. Move these weekly.
d. In-store newsletter. Create a simple newsletter promoting the business and place it out the front of the business, in bags, handed out and even slipped into local newspapers. Get your message in front of customers after they leave.
e. Hotspot promotions. Identify locations where customers stop the most in your store. Place other products at these hotspots which appeal and are easy to purchase. Use the HOT products to sell other product – but the impulse products have to change a couple of times a week.
f. Dance floor change. The dance floor, the space in front of the sales counter, needs to change weekly. More often for busier shops. A fresh dance floor will show more customers ‘new items’.
g. Coupons / advertising on call to action offers on receipts. i.e. bring this coupon back within two days for XXX offer.
h. End of sale offer. Once you complete each sale, give customers an offer to make another purchase within a limited timeframe for a discount. This is best done with a coupon. Consider structuring the offer to drive business in a particular category. Track redemption by keeping coupons redeemed with receipts for the purchases.
i. Parasite displays. These are small space displays which hang next to other products, encroaching on the space. You can see supermarkets use parasite displays well offering products from elsewhere in space committed to popular and often unrelated product.
By focusing on sales efficiency and driving a bigger basket for each sale, you set yourself up to make more from every sale.
3. Better margin – by selling for the best price
What you charge for what you sell needs to be carefully considered. Price is all about customer perception of value. Value is based in a range of criteria including:
- Added value – from purchasing from this business.
- Perceived value – how you package a product compared to how others package the same product can lead to a different price.
a. Manage labour to focus on products with the best return to the business. This is a balance between overall gross profit dollars and margin percentage.
b. Look at items with a customer service component, where your expertise is required to make the sale or make good use of the products or where there is a reasonable after sales service component. These can usually carry a higher margin.
c. Look at the items which are unique to your business in your location or nearby. If you are the only store serving the local community then you do have a pricing opportunity. These items can usually carry a higher margin.
d. Assess why people shop at your shop. If they are shopping because of convenience then you have the capacity to charge more for this. This is why convenience stores charge more for items which you can buy elsewhere for considerably less.
f. Involve others in setting sale price. Ask your team what you can charge for an item. Assess what they think you can “get away with”. By polling team members, you may find that your perception on price is lower than what others expect.
You can build a stronger business by taking small steps each day which focus on new traffic, better margin and improved sales efficiency. No grand plan, no expert strategy – just small steps which leverage opportunities which exist in your retail business.
By paying closer attention to the margin you can achieve, you strengthen the financial foundation of the business and ensure that your return on inventory investment is more helpful to the bigger business plan.
This is the Tower Systems difference … practical advice for small business retailers based on sound business experience and trustworthy business data. We help retailers every day to build stronger, healthier and more valued businesses.