Congratulations. You’ve beaten the odds and turned your retail dream into a small business success story. Maybe it took a few years, or maybe it happened much faster. Either way, your hard work has paid off and you’re at the helm of a profitable business, or at least one that’s breaking even month-in and month-out.
So, what’s next? If you’re like other ambitious business owners, the answer is probably pretty straightforward. It’s time to start growing your retail operation. You might have some ideas for getting started. It’s also possible that growing your business is a new topic, and you could use a little inspiration.
In either case, the following tactics will help. We’ll give you proven growth initiatives that you can use for creating your own retail expansion strategy. If you already have ideas of your own, you can validate them against our list, and if you need some inspiration, our practical tips will make getting started a breeze.
One of the most straightforward ways to expand your retail business is to target a broader audience. For example, maybe you run a retail shop that specializes in vintage women’s clothing. To begin targeting a broader audience, you could start selling men’s vintage clothing as well. Depending on the demographics of your market, this move could effectively double (or more) the size of your target audience.
There is, of course, some risk in making such a drastic change to your underlying business strategy. To mitigate this risk, we recommend starting small. For example, perhaps you stock a few men’s accessories like sunglasses, wallets, and rings instead of adding a full line of men’s clothing to your inventory. This technique allows you to test your audience’s appetite for this new product line. The goal is to avoid investing too much capital in inventory you may not be able to move.
Another approach you can take is to participate in some kind of a local market or to host a pop-up shop of your own. The goal of these events is typically to introduce yourself to a new audience, which makes them a perfect testbed for your expansion strategy. Shoppers will approach your brand without the biases or preconceived notions of your regular shoppers, allowing you to test a broader audience’s appetite for a more diversified product catalog.
Regardless of which approach you take, if you see initial success, begin further initiatives that’ll help you better reach this new audience. For example, you may want to send a few emails informing your customers that you now offer men’s merchandise and update your shop’s interior design. Similarly, you may want to move from offering a few accessories to a full line of clothing. A loan sourced through an organization like Lendio can be a great way to get the financing you need to fund this type of expansion. With the capital in-hand, the key then is to continue taking measured steps while evaluating your performance along the way.
Another approach to expansion is to begin offering a wider variety of products. While similar to the first strategy, there are some differences. It’s not quite as dramatic a shift as beginning to target a very different secondary market. Instead, the goal is to better serve your primary audience by offering them more products that they can purchase from you.
The best approach is to consider complementary product lines. If your retail shop specializes in cooking supplies, you could begin offering bartending or mixology tools. If you’re a bookstore or a record store, you could blur the retail lines a little bit and set up a small cafe so your shoppers can sip drinks while they browse books or listen to music.
Similar to our first point, you will want to expand in small steps. For our cafe example, you could start with a hot plate and a stovetop espresso maker before investing in a full-size machine. Once you’ve run enough tests that you’re confident in your new offering, it’s time to take the next step and invest capital in the equipment and inventory you need to fully commit to this new segment of your business.
No, you don’t need to be Don Draper, but if you want to grow your business, you do need to market it effectively. That means you should do more than send a monthly email or run an advertisement in the local paper. You need a comprehensive strategy that markets your business in the channels and mediums your potential customers use to find and research new businesses.
Up until the advent of the internet, marketing was tough for small businesses. Most of the channels and media for reaching customers like TV, radio, and billboards were expensive and dominated by larger brands. But the internet leveled the playing field. We’re generalizing a bit here, but the way your customers consume media has almost certainly changed. People rely more on online tools like social media, review sites, search engine queries, and online videos to find businesses and engage with brands than they do traditional media.
This shift helps you because marketing online is often far more affordable and targeted than traditional media. Not only can you maintain a sizeable marketing presence cost-effectively, but you can ensure the money you do invest only goes toward reaching your specific target audience.
The specific marketing tactics you use will depend heavily on the preferences of your audience, as well as your skill level and available financial resources. With that in mind, here are a few ideas that can get you started:
Outside of these tips, you’ll want to ensure that you have the right tools at your disposal. One of the most powerful for retailers is a modern point of sale system (POS). This system can help you reach new customers and build repeat business with tools like customer loyalty programs, gift cards, and integrations with marketing platforms like email marketing software. Many POS allow you to collect email addresses right at the point of purchase where they’re automatically synced to your email list and available to receive your next marketing emails.
Tapping into the booming world of e-commerce is another surefire way to expand your retail business. According to Statista, retail e-commerce sales are expected to reach over $550 billion in 2019. And with e-commerce platforms more affordable and easier to use than ever, there’s never been a better time than now to start selling online.
Here are a few tips to help you start selling online:
Adding an online store to your business can certainly be a challenge. As we mentioned earlier, it’s like running an entirely separate business, so be sure you have the time and resources to commit to its success.
It’s a sizable undertaking, but opening a second location for your business is another proven method for expanding your customer base and revenue. However, outside of opening an online store, it’s also the most expensive and time-intensive. You shouldn’t head down this road unless you’ve done your homework and can commit the time, capital, and effort to making it work.
To help you start the planning process and avoid the most common pitfalls along the way, let’s look at some strategies and tips to consider:
There you have it — proven tactics to power your retail expansion strategy. While none of these tips are easy, they’re all straightforward, proven paths toward growth. It’s unlikely they all will work for your business or situation right away. Our recommendation is to think long and hard about the objectives you’d like your retail expansion strategy to achieve. From there, select the tactic that you think will get you where you want to go most efficiently.