Did you know that 45% of new businesses fail during the first five years? Growing a retail business is both a challenging and exciting process. After going through all the challenges and successfully coming out with a profitable business, it is only normal to seek ways to expand your business. In reality, many retail business owners today find themselves in this kind of situation.
There is no “one absolute way” to expand a small business. There are so many ways retail expansion can be done, we are going to explore the different strategies that you can implement today.
1: Add a New Store Location
When most entrepreneurs think about expanding their retail business, the first and sometimes only thing that comes to their mind is opening a new store. This has been the oldest form of expanding businesses and is an effective way of making sure that your products and services are easily accessible. This is one of the most used offline strategies in retail expansion.
As much as this strategy has been proven to be effective, it is best that you place a considerable amount of time analyzing and making sure that you can meet up with its financial requirements as well as the logistics (bills, taxes, wages/salaries, etc) involved.
Creating a new location for your retail business does not just mean creating the same existing store you already have. You have to consider the fact that the new location comes with a new client base which you will have to appeal to. This means that what might be working or getting more attention from customers in your existing retail store might not do the same at the new location. As a result of this, you will need to develop a new sales/marketing strategy for that new location while still maintaining standard technical and managerial processes e.t.c across your retail locations.
A practical example you can find in chain retail stores is that they use the same multi-retail store POS. This makes it easy for them to train their employees using a unified system and facilitates managerial flexibility and uniformity across all locations.
As mentioned above, if you want to go for this option as a means of growing your retail business, you should have thought of the expenses involved and the logistics associated with getting a new retail store location before doing any other thing.
2: Explore New Sales Channels
In the modern world of today, expanding a retail business is not only limited to opening physical business locations but also taking advantage of the technology available. A good alternative sales channel is opening an online retail store.
This has a lot of benefits and compared to adding a new physical location, it is relatively cheaper, easier to implement and you can reach out to a larger customer base. Most importantly, your store will be easily accessible as people will only have to visit your store’s website to make purchases.
Once you have created your online store, all you need to do is to focus on advertising and you’ll see how your sales will increase at a fast rate.
If creating an online store may be challenging for you, you could make use of social media. Platforms such as Facebook and Instagram are well known for providing the necessary tools needed for running a business on social media. Many businesses today have their stores on these platforms. When thinking of ways to expand your business you should definitely consider trying this out.
3: Expand to other Markets
Most retail businesses are mainly focused on a particular market segment. This could be based on gender, interest, lifestyle, etc. When expanding such businesses, a great strategy is to expand to other market segments closely related to your current business.
For example, a retail store that provides shoes for ladies could opt to target the male market by selling shoes for men. This is a great way of taking advantage of the market you already have to reach out to more potential clients.
Of course, before expanding your retail business into any market, you will need to carry out the necessary analysis to make sure that you have the right product that the new market demands.
4: Expand Your Product Line
Widening the range of products you sell is another effective strategy of growing your retail business. When implemented correctly, this could give small businesses a competitive edge in the market.
Expanding your product line involves taking advantage of the market opportunities that are present in the market segment which your customers belong to. This could involve providing additional services or products that your customers will need. Sometimes, these could be services or products that complement the main product you sell or a standalone product that is related to your brand and market segment.
5: Work with other Businesses
Another effective retail expansion strategy that can be implemented is partnering with other established businesses. This allows you to leverage the opportunity of dealing with a customer base that is already prepared to use your products.
It goes without saying that if you want to partner with another retail business, it will have to be one that is closely tied to your market segment if not the same. You also need to make sure you go into an agreement that contributes to your vision for your business as well as provides value to your customers.
A few benefits of this strategy include saving cost, an increase in revenue, and most of all marketing will not be challenging because the partnering business already has the required infrastructure.
6: Take Advantage of Digital Marketplaces
Making use of digital marketplaces is another way of growing your retail business. There are many marketplaces on which you can place your products on display and generate orders. Online marketplaces come with large client bases as these platforms are built based on the availability of products widely requested and searched for by customers. Getting your products listed on such platforms will be the first step to expanding your business.
Examples of such platforms are Amazon, Ali-express, eBay, Jumia, etc. Although once you start making sales, you will have to pay some commission to the platform, you can expect an increase in sales(depending on the level of demand).
7: Improve customer Experience
Customers are the most important part of any business, otherwise, you will not have a business in the first place. Hence, it is no surprise that improving the customers’ experience in relation to your business is a great way to expand your retail business and increase the number of loyal customers in your customer base.
One great way of improving customer experience is by having a customer loyalty system. As a retail business owner, you want to ensure that your customers are happy and remain loyal to your brand, hence, having a loyalty program is the easiest way of getting that done. Your customers will be rewarded points for purchasing your products and these points once accumulated can be exchanged for other products in your shop. So if you don’t have a loyalty system right now, this is a good opportunity to try it out.
Another way of improving the experience of your customers is by actively engaging with them. Especially when you have an online store or make use of social media, you should devise different ways of having interesting conversations with your followers. This makes them appreciate your brand and retains their loyalty to your retail store. If you are thinking of how to grow an online retail business, this is a great strategy to consider.
Other ways may include: having regular giveaways, engaging with the local community in which your business is located and optimizing your customer support. Ultimately, you will want to ensure that your customers get to experience more of the human side of your business in order to develop a stronger connection to your brand which in turn will bring about business growth.