Retail is not for the faint of heart. Running a store successfully means creating a fantastic end-to-end experience for the customer. Getting some of the pieces right just doesn’t cut it.
“They have atrocious customer service and the selection is poor.
But the salespeople know a lot, and it’s really easy to find parking.
You should definitely check them out.”
– no customer ever
Customer Expectations
Shoppers don’t pick the experience apart and assign grades to the individual pieces; instead, your store is overall a #GreatStore or a #RetailFail. And while customers are happy to gush about truly fantastic experiences to their friends, they’re even quicker to complain about bad ones to the world.
- The store’s ease of access, space planning, and merchandising all come together in the customer’s mind as, can I find what I’m looking for?
- The right music, signage, and displays coalesce into, I like this place.
- And of course, retail comes down to the product. Having the right selection with adequate stock in key sizes is critical to getting the ultimate thumbs-up: this place has great stuff.
Now, you don’t have to become Walmart (possibly the best company in the world at back-end logistics and distribution) or Amazon (probably the best at front-end user experience) to win at retail. But you must provide an experience that is perfect. Perhaps not perfect for everyone, but perfect for your kind of shopper.
The Key Elements of a Great Retail Experience
So what are the pieces of a great retail experience? Here are three fundamentals.
Sourcing
It all starts with the product. Whether you’re selling birthday cards or Bentleys, your customers will be looking for something amazing and unexpected. Retail thrives on “new,” so source to fill that need.
Sourcing is an art and a science. You want to buy, as close as possible, just the right quantity of just the right products.
Not enough selection, and customers will be disinterested. Wrong selection, and consumers will leave disappointed when they fail to find what they’re looking for. Too much selection, and unsold products will languish on the racks until they are sold at steep discount or written off.
Do your research on similar stores so you have a good idea as to the amount of product you’re going to stock. And of course, managing your inventory is key; you need to have a grasp on stock levels at all times.
Merchandising
From museum-like pedestals at one extreme to jumbled bins on the other, how you feature your product makes all the difference. Whether it’s cases, racks, or shelves, the product must be the star.
Consider investing in high-end lighting, as some studies have shown that lighting can make a serious impact on sales.
And never treat your windows as an afterthought. I learned about window design from Lana DeCosimo of Display Attic, who has done visual displays for Holt Renfew and Swarovski. Your displays don’t have to be expensive — just well-thought-out and correctly matched to your shopper profile. Whether you have a generous budget or a shoestring, an amazing display conveys a mood and brings people in to see more.
Pricing
While there are many pricing models out there — cost-plus pricing and MSRP are two of the most common ones — you should know the price points you can sell at and work backward.
This is sometimes called “psychological pricing,” and it starts by knowing what customers are comfortable with. Remember that consumers don’t know your costs, but they do know what they are willing to pay.
So, if you know your customers would snap an item up at a specific price point, hunt down the right supplier to make it available at that price.
Conversely, if you come across an amazing, beautiful item, but the retail price will be way above what your customers will pay, forget about it.
A Final Word
Retail is risky. Consumers are fickle, and their tastes and loyalties shift. Can you ever be certain that the landscape won’t change beneath your feet? Probably not. But if you plan correctly and enjoy the ride, you’ll stand a much better chance of achieving retail success.
