5 Things To Do To Ensure Your Retail Store Opening is a Success
A successful store opening is the result of having total control over several moving but interconnected parts. It includes a serious investment of both your time and money and patience. A detailed plan helps too, because it can quickly become chaotic if you don’t approach it with care.
That might sound melodramatic but you need to consider this: if you don’t approach this properly, you’ll start off on the wrong foot. And in an industry such as retail where competition is high, it can take time to right yourself. Time that you can’t afford.
1. Choose your location
Picking the right location for your store isn’t as simple as finding the place with the most foot traffic, and then setting up shop so that you can watch the money roll in. If only. Choosing the right location is rather a strategic endeavour - some experts even argue that it’s absolutely critical to the success of your store - and to get it right, you need to consider a number of factors.
For one, there is the cost. Let’s say you have your eye on locating your store in a shopping mall. Nothing wrong with that - there is always plenty of foot traffic so there is a good argument for doing that. Especially if you’re a smaller retailer looking to cash in. But as Shari Waters says in her piece for The Balance, you shouldn’t equate a lot of traffic with a lot of customers. Also, given the fact that shopping malls are commercial hubs, it’s much more expensive to locate your store here. Rather pick a location that suits your budget.
Another factor is your target market. Are you located in an area that your target market can access easily? If not, why not? Rather find a location that is as close to your target market as possible.
On top of that, there are a number of other smaller, but not necessarily less insignificant, factors that you should consider, such as floor space, your competition, and even any future plans you may have for growth.
Will you have enough floor space to hold your products without your store looking messy or cluttered? Are you placing your store next to a competitor who has a wider or deeper assortment than you? Do you have enough space if you want to grow your product assortment?
2. Choose your cluster strategy
To ensure that your store opening is a success, it takes more than just picking the right location. It also includes choosing and developing the right clustering strategy for your store.
What is clustering exactly? Also referred to as store grouping, clustering is fairly easy to understand. It’s defined as “the grouping of stores based on similar store and/or demographic characteristics.” And there are two ways in which you can cluster your store. You can choose between a store-based clustering strategy or a category-based clustering strategy.
Before choosing which route to take, it must be pointed out that your store-based clustering strategy is less personal. That’s because you’re taking a big picture view when grouping stores together. How does that look at a practical level?
Let’s say you have four stores, for example, and you split them into Cluster Group 1 and Cluster Group 2, with two stores in each. In clustering these stores into groups, you’re effectively disregarding that each category should be treated differently.
Thus, both stores in group 1 will have the same categories and the same range of products within them. The same can be said for Group 2. All of the stores in this group will have the same range of products. This way of clustering is simple and straightforward, which is why many stores go this route.
Meanwhile, your category-based clustering groups categories across multiple stores instead of entire stores. This strategy takes a deeper look each category. That means that shopping becomes more personal. It’s also a lot more complex. But it’s worth it
Let’s stay with the example of four stores. In clustering by category, you can decide that Store 1 and Store 3 get the same range of products in the Hair Care category. But that’s the only category in which they are the same. The rest of the categories in their stores have a different range of products that cater for different markets.
Likewise for a Toiletries category, you might group Store 2 and Store 4 together because they cater for the same market. Let’s take a third category - Deodorants, and you could group Store 1, Store 2 and Store 4 together. Store 3 would then have it’s own range of products for that category.
You can do this for each and every category in your store to the point that of the four stores you run, no two are the same.
3. Choose your product assortment
Once you’ve decided on how to cluster your store, it makes it that much easier to decide on your product assortment before your big store opening. In fact, as we’ve noted before, deciding on your cluster strategy before choosing your products is absolutely crucial if you want to see retail success.
Why? Simple: regardless of whether you choose to follow a store- or category-based clustering strategy, both make up the core of your assortment planning strategy. That’s because once you have determined your store clusters, you can determine which products should appear in which stores.
So what does an effective assortment plan look like for your store cluster? For one, it’s localised. We’ve already explained here why a localised assortment plan is so important so we won’t go into too much detail. In brief, though, it allows you to meet your customer’s needs and demands and improves their in-store experience.
That said, when creating your assortment plan, you do need to consider the different categories of products in your stores. There are two of them, namely your “base range” and your “custom assortment”. Your base range refers to those products that you will offer in all of your stores regardless of local preferences. These are usually those products that customers would expect to find in all of your stores. They could also be your most popular products.
Meanwhile, your custom assortment is just that: it’s a range of products that are customised to whoever shops in a specific store cluster. For example, if the customers who shop a particular cluster are convenience-driven, you’d be better off ranging products that meet that expectation.
As a result, you’ll improve your overall sales performance. More than that, you’ll have a firm control of your inventory levels.
4. Meet your customer’s expectations with brand consistency
While the products you range are crucial, so too is the way you present your brand to your customers. Here, consistency is key. Your customers prefer familiarity over confusion. Don’t think so? Then it’s worth reading Humayun Khan’s piece from Shopify.
In the article, he writes, “smart design decisions make a significant difference in regards to whether you make a sale or not”. How? By incorporating a consistent design across your stores, you’re setting an expectation for your customers. As a result, whenever they walk into one of your stores, regardless of where it’s located, you must deliver on that expectation.
Remember, if you want your store opening to be a success, you need to think about your customers first. How do they shop and what do they expect when they walk into your store? If you can answer that and meet their expectation, you’re halfway to pleasing your customers.
Of course, it’s not just the overall design of your store that needs to meet expectations. The retail fixtures you use also need to match your brand and the products you sell. For example, if you sell high-end products, you wouldn’t consider using cheap-looking plastic shelving. The same goes for using shelving that is more expensive than the products on them.
Last but certainly not least is your store layout. Similar to your store design, you must ensure that it’s standardised across all of your stores. After all, you don’t want a customer to walk in with an expectation, get confused about where to look for something in your store, and then immediately walk out. You need to make the shopping experience as easy as possible.
If your customer finds it hard to shop your store, you can be guaranteed that they’ll go somewhere else where it won’t be a struggle.
5. Ensure that your initial stock order is correct
Before your big store opening, you need to ensure that your initial stock order is correct. Of course, that should be obvious: you need to have enough stock in your store so that you can fill your shelves. But it can’t be just any old stock; it needs to be the right stock.
How do you ensure this happens? For one, you can use planograms. In fact, you can’t expect to fill your shelf properly without first building one and then implementing it in-store. That’s because your planogram shows you how much capacity each individual SKU needs to ensure that any given shelf in your store is packed properly.
For example, let’s say your shelf holds two different products. Based on retail data, you’ll give one of those products three facings on your planogram. It has three facings deep. That gives you a capacity of nine. Likewise if you give the second product six facings and three facings deep, the second product has a capacity of 18. As a result, you’d thus know that the products’ capacity on your shelf would be nine and 18 respectively.