Your guide to winning at retail in the digital age.
If you’re a savvy entrepreneur looking for a rewarding new venture or an ambitious professional looking to run your own business, the retail sector is paved with potential rewards.
While the retail industry is an increasingly competitive playing field, by taking the right measures and understanding your mission, you can start a profitable store.
The evolution of the digital age has blurred the lines between physical retail and eCommerce, meaning that budding business owners (like you) have a seemingly infinite number of channels or touchpoints for connecting with customers and earning sales.
To set you on the path to success, we’re going to explain the steps required to open a profitable retail store in 2022.
Before we get started, here is a quick rundown of the essential steps we’re going to explore:
- Choose your retail store or business model
- Choose your niche (know your mission)
- Carry out market research
- Source your products
- Create your spaces
- Promote your retail store
Ready? Let’s get started.
1. Choose your retail store or business model
The first major step in opening a profitable retail store is choosing a basic business model. As mentioned, the worlds of physical retail and eCommerce are now merged. As a store owner, you have the flexibility to choose how you connect with your customers.
While a brick-and-mortar store does mean more overhead than having an exclusively online-based retail business, it does offer benefits in terms of physical brand presence and the prospect of earning extra sales.
Here are three basic frameworks you can consider when opening up a profitable retail store:
- Brick-and-mortar store with a website and an online presence
- Exclusively online retail (eCommerce) store with several digital channels and touchpoints
- Online retail store that hosts physical events and runs pop-up shopping experiences
You can choose one of these models based on your budget and operational capacity (how much staff or storage space you have, for example). Select your model based on your existing circumstances, and when you start to scale, you can expand the way you operate accordingly.
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2. Choose your niche (know your mission)
Next in our journey into how to open a profitable retail store, we’re going to explore the importance of picking a direct path—or, in other words, choosing a niche.
When you’re selling goods or products directly to consumers, casting a wide net is never a good idea. In the modern age, most consumers connect with brands that have a strong sense of identity and a definitive product range.
So, to open a profitable retail store, it’s vital that you understand your mission from the very start, as this will dictate which niche you choose.
If your mission is to drive down consumer-driven waste and work towards a sustainable future, you will develop your branding and product range in line with this core goal. To achieve your mission and connect with a captive audience, you might sell repurposed clothing and reusable eco products for everyday use while creating a community forum where people can swap old clothing.
Once you’ve defined your retail mission and picked your niche, you can choose a business name and start thinking about your branding.
3. Carry out market research
Once you’ve defined your mission and determined which pocket of the retail industry you’re going to dominate, you should carry out a little market and competitor research.
By knowing your retail enemies and getting to grips with the latest trends in your niche, you can make informed decisions on your business strategy, brand communications (the style of content or messages you will share with your audience), and the products you’re going to sell.
Here are some research methods and ideas that you can use to your advantage:
- Create buyer personas to define your ideal retail customers.
- Share polls and host focus groups to gain an understanding of what people are looking for in your niche.
- List your main competitors and examine the kind of content they’re putting out. You can sign up for email newsletters and buy a test product from their stores to see how they interact with their customers. Doing so will empower you to identify any content or service gaps you can exploit while offering inspiration for your own efforts.
- Get active on social media to uncover the latest trends, topics, and points of discussion in your niche.
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4. Source your products
With a definitive direction, a solid sense of brand identity, and a host of market insights up your sleeve, it’s time to curate your range and source your products.
To curate a range that is likely to result in a healthy return on investment (ROI), selecting items that you know your audience will buy (based on your research) while setting concrete categories is vital. Rather than spreading yourself too thin, you should test the retail waters by choosing a carefully curated mix of low-, mid-, and high-value items.
Once you’ve outlined your prospective product range, look to source suppliers that are reputable, ethical, reliable, and will offer you a solid profit margin without the need to set your retail prices sky-high.
As a retailer in the modern age, you can source and store your products physically or adopt a dropshipping model where third-party suppliers stock and fulfill products on your behalf. You should ultimately choose a product curation and management approach based on your retail store or business model.
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5. Create your spaces
With your products, suppliers, and inventory in place, you should set about designing your brick-and-mortar space (if this applies to you) and creating your online store.
Tip: If you are setting up a physical retail space, our Exploration of What a Modern Brick and Mortar Store Should Look Like if you’re looking to open a physical retail space will offer plenty of practical inspiration.
Setting up an online store, as well as social media channels and an outlet for email communications, is essential to your success as a retail business owner. Working with a wealth of channels (or digital spaces) will expand your commercial reach, build trust, and help you stand out in a saturated space.
Did you know? Ninety percent of consumers expect consistent interactions across multiple channels.
To create spaces that are likely to drive engagement and result in healthy profits, working with the right tools and getting your designs right is essential. You should also ensure that your branding is consistent across every space and channel.
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6. Promote your retail store
Once everything is up and running, the final piece in the puzzle is promoting your retail store.
Marketing is the beating heart of ongoing growth and success in an ever-expanding retail space. By marketing your brand across a mix of channels or touchpoints, you will drive engagement, inspire customer loyalty, and earn more sales.
In the modern age, the main aim of the retail marketing game is to offer your customers direct personal value. You can do this by developing creative campaign hooks and delivering content that is practical, inspirational, and insightful.
There are several ways to approach retail marketing. Our reading list covers all key promotional bases.
- How to Create a Whitepaper for Better Brand Awareness
- A Step-By-Step Guide to Creating Facebook Dynamic Product Ad
- A Guide to Instagram Marketing Success
- A Definitive Guide to TikTok Marketing
- 7 Copywriting Principles for the Modern Business Age
- How to Scale Your Business with User-Generated Content
- Your Definitive Guide to Small Business Trend Marketing
- How to Make a Brand Video That Customers Actually Watch
Opening a profitable online retail store is challenging. But by creating solid foundations, sticking to your principles, and working with the right tools, you will win on tomorrow’s commercial battlefield.
Navigate these essential steps one by one using our resources as a guide, and you will start growing your audience in no time. Best of luck! For more inspiration, read about what not to do with our guide to 15 eCommerce & Retail Marketing Blunders to Avoid.