Anyone involved in retail will tell you that the retail landscape was changing rapidly before COVID and things have only gotten more unpredictable since.
The rise of e-commerce had made it easier than ever for consumers to shop from home, and many traditional brick-and-mortar stores were already struggling to compete.
However, physical storefronts still offer a number of advantages, and for some businesses, they remain essential, so we are going to have a look at some of the considerations for anyone trying to decide which way to go.
The best place to start is the benefits of having a physical shopfront.
There are a number and these include:
● Increased brand awareness and visibility:
A physical storefront and with it a physical presence can help to increase brand awareness and visibility.
This can be especially beneficial for new businesses that need to generate brand awareness from scratch, or businesses that are trying to expand into new markets.
● Improved customer experience:
A physical storefront will normally provide a better customer experience than online shopping. Customers can see and touch the products before they buy them, and they can also get help from sales staff in real time if they need it.
● Increased sales:
Some studies suggest that customers who visit a physical store are more likely to make a purchase than those who only view products online.
This makes sense for two reasons; customers are more likely to trust and buy from a business that has a physical presence, and they are also more likely to impulse buy when they are in a store.
● Improved customer loyalty:
Physical storefronts can help to improve customer loyalty by providing a place where customers can build relationships with sales staff and other customers.
● Support for the local community:
Physical storefronts can be perceived as supporting the local community by providing jobs. They can also be a valuable part of the local community, as they provide a place where people can come together to shop, socialise, and participate in community events.
This in turn can encourage people to support their local store in leu of shopping online.
There are also some disadvantages to having a physical store including:
● High costs:
The costs of running a physical storefront is normally higher than an e-commerce business and can be high, period! Costs include rent, utilities, staff costs, insurance, cleaning, and many others.
These costs can be especially challenging for small businesses competing in a price sensitive market.
● Limited reach:
A physical storefront is limited to its physical location.
This means that it can be difficult to reach customers who live outside of the local area.
● Long hours:
Physical storefronts often require long hours of operation, which can be draining for owners, and adds additional complexity around recruiting and rostering.
● Security risks:
Physical storefronts are at risk of theft, vandalism, and other crimes.
In some areas this can be a costly and time-consuming problem for businesses to deal with.
Based on our experience, if you are considering opening a physical storefront, or you are already operating a physical store, there are several things you can do to tip the odds of success in your favour a little bit.
These include:
● Choose a good location:
The location of your store is one of the most important factors in its success, particularly for impulse and discretionary products (think coffee for example).
Choose a location that is high-traffic and convenient for your target customers.
● Create a welcoming and inviting atmosphere:
Your store should be clean, well-organized, have the appropriate fitout and decor and just generally inviting.
Make sure that your staff are both friendly and helpful.
If your staff look like they are just there to get a paycheck, customers are likely to feel your business is just there to get their money!
● Offer a wide range of products and services to the extent that it makes sense:
This is a balancing act.
To attract and retain customers, you need to offer a wide enough range of products and services to give them what they are after and ideally several options.
However, if you have too many products and services, or too many options, customers may not actually be able to find what they want or may not be able to make a decision.
● Use technology to your advantage:
Technology can help you to improve the customer experience and reduce your costs.
For example, you can use a point-of-sale system to process payments and track inventory, which in turn allows you to support lean approaches like just in time inventory management.
● Provide excellent customer service:
Excellent customer service is essential for any business, but it is especially important for businesses
with physical storefronts, and this is where you can really standout from your online competitors. Make sure that your staff are well-trained and that they are able to provide customers with the help and support they need.
Also, firmly in the category of things we shouldn’t have to say but know from experience we do, make sure your staff are getting the simple things right, like wearing shoes!
Whether or not to have a physical storefront is a decision that depends on a number of factors, including the type of business you operate, your target customers, and your budget. However, there is no doubt that physical storefronts do offer several advantages, such as increased brand awareness,
improved customer experience, and potentially increased sales.
If you have a question about starting a business or running your existing business, we’d love to hear from you because we’ll select a new question to answer here every two weeks.
You can submit your question to james@qsbconsulting.com using the subject ‘CQToday’.
