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A retailer buying products or services from a manufacturer or wholesaler and selling it to consumers might seem easy enough, but it isn’t! The retail industry covers so much – everything from food to apparel and auto to home decor. With the numerous segments that make up the retail industry, it offers many opportunities for entrepreneurs, but it is also extremely competitive, making it a risky endeavor. But with a bit of smart planning, you can start a retail business that will succeed and will also stand out among the competitors in the market.

Step-by-Step Guide to Start & Expand a Retail Business

A study cited by the U.S. Business Administration finds that 70% of new businesses last at least two years, but drop to 50% by the five-year mark and 33% by the 10-year mark, with only 25% last longer than 15 years. The Dun & Bradstreet report also found that retail businesses failed at a rate of 11.2% in the United States and 13.6% globally. Often, retail business failure occurs because business owners aren’t aware of the critical steps to start one. Here are a few steps that are critical and you need to focus on while starting a retail business.

  1. Business Plan

One of the first things a person looking to start a business should do is to write a business plan that outlines their business objectives and how they intend to achieve them. A business plan describes all the aspects of your company, such as what you’ll sell, how you’ll run your business, and who your target market is!

An effective business plan allows you to get a full picture of your business at once, making it simple to determine what will work and what needs to be altered. You should make sure that your business plan is concise, informative, and detailed. It’s also important to remember that your business plan will always need to be revised as you go through the process of implementing new measures.

  1. Business Strategy

Defining a business strategy can help in outlining a company’s who, what, where, why, and how! For example, a business strategy outlines which market to focus on, how to attract customers, when to launch new products, and how to handle competitors. Retail business strategies are primarily intended to increase sales and customer satisfaction at the same time. Business strategies for retail stores are important so that they can market their goods and services and find the right set of customers.

To put it simply, Retail strategy helps in the identification of: 

(1) The retailer’s target market, 

(2) Their plan to fulfill the needs of that market, and 

(3) how they look to establish an advantage on sustainable competitiveness.

  1. Finalization of Space

It is extremely important to consider your location when you open up a store. A good location means more foot traffic and regular customers. Consider your location carefully by talking with nearby businesses. Look for a Commercial space that is intended for companies to conduct business and make a profit. However, such a location can be expensive, hence consider the deposit, as well as funds you may need to improve or customize your retail space.

You should also consider if you want to rent or lease your commercial space and work with a landlord or if you want to purchase the space to be in full control. When choosing a retail location, be sure to check with your local zoning and planning department. They will let you know if there are any restrictions on construction or traffic in your area as this can create problems for your retail store.

  1. Organization Structure

Comprehending the retail store’s organizational structure is necessary for the retail business. Usually, retail businesses depend on a structure that focuses on three areas:

  • centralized operations, 
  • store operations, and 
  • regional operations.

Centralized operations take care of responsibilities like store planning and human resources. Store operations form duties like merchandising and marketing which are executed regularly by retail stores. Regional operations are related to distribution & warehousing. Setting up this kind of organizational retail structure is useful as it confines almost all operations of a retail business.

  1. Recruitment Plan

To avoid high turnover rates, retailers should build a recruitment plan around common challenges, such as high volume hiring, seasonal hiring, and recruiting the right type of applicants. To address these challenges in retail recruitment, HR professionals and recruiters need to make use of modern recruiting software and apply recruitment marketing tactics to build talent pools. By harnessing the latest innovations in retail recruiting, you can recruit retail professionals more easily and faster.

  1. Layout Planning for Warehouse & Stores

Store/ shop layout planning is an important factor in influencing the customer experience and their purchase behavior. The way customers interact with your merchandise determines their purchase behavior. The checkout counter or other machines installed in the retail store should be arranged according to the nature or type of the operations. This helps in the smooth flow of goods and services and also makes it convenient for the customers to shop in the store. Besides this, proper space management techniques and strategic floor plans should be used including lighting, furniture, signage, display, and fixtures.

To maximize efficiency, an effective warehouse floor plan is crucial. From manufacturing and assembly to order fulfillment and shipping, a well-designed warehouse floor plan can minimize costs and maximize productivity. Maintaining the flow of goods in the warehouse is the most important factor. Before deciding how to design and layout your warehouse, consider how it will be utilized, how it will store products, and how it will flow within the production area. Additionally, take into account your business inventory management system, as your layout will affect your ability to manage inventory.

  1. SOPs & ERP for Retail Business

SOPs, Standard Operating Procedures, are a set of critical documents offering step-by-step instructions as to how employees within an organization or business must work about completing their tasks efficiently. A Standard Operating Procedures document guides both new and current employees on how to complete their tasks and maintain consistency and quality throughout business operations. When the expectations of the business are well documented, there is no miscommunication or confusion. Hence, SOPs are one of the most important parts of any business.

Retail ERP is a vital enterprise technology solution for companies and brands specializing in retail. It is also an essential tool for finance, accounting, retail business management, and many more industries. Because retail brands focus on selling directly to consumers, the ERP for retail business needs to include consumer-oriented functionality in addition to standard ERP features. ERP for retail helps retailers manage their businesses effectively and efficiently by providing consistent information flow. It helps in easy tracking of all business transactions. A retail ERP system allows automatic recording of transactions in a real-time environment.

  1. Procurement Plan

The goal of a procurement plan is to increase the efficiency, effectiveness, and transparency of the procurement process. The document specifically describes how products or services will be acquired and how vendors will be managed during the project. It includes information such as the types of contracts that will be used, the planned delivery or implementation dates for the contracted products or services, the types of metrics that will be used to evaluate the vendor’s performance, and an explanation of how the procurement process will be performed.

Creating a procurement plan helps an organization avoid surprises and last-minute considerations. The document helps leaders decide what to buy or when to buy it, and what sources to purchase from! A procurement plan also allows project planners to determine if their expectations and requirements are realistic and can be completed in the proposed project timeline. Many organizations use procurement software to automate and accelerate the procurement processes and optimize their workflow.

  1. VM Guidelines 

A good visual merchandising strategy maximizes sales & increases walkins by strategically presenting your products in your retail space. Creating a unique image of your business becomes possible by strategically presenting your products. Having a warm, friendly, and approachable retail space will help you to stand out from your competition.

Displays can heighten the perception of your business and help you to achieve sales because they help the potential customers to build trust and confidence in your business. The way you present your products and the way you set up your window, shelf and stock displays are critical to branding your business. If customers enjoy the way your store looks and your products are displayed well, they are more likely to spend time and money at your business.

  1. Pre-Launch Plan 

Creating excitement before the launch of your products is a key goal of the pre-launch plan. Various methods are available to create this effect, but not all can create enough buzz or create enough anticipation for your business. Hence, for your brand to attract the right audience and your products to sell well, a good pre-launch strategy is a must-have! You can avoid having to wait for years or months of zero to negative profits with a good pre-launch strategy. For instance, you can take future marketing into account while creating a pre-launch plan. Make a pre-plan for your marketing by knowing who you will reach out to, what platforms are best, and how you will utilize each one.

  1. Launch

Having followed all of the above steps, e-retail business startups can easily launch or expand their business! Startups may also consider retail business consulting services to implement the steps outlined above and begin their business successfully.

About YRC Retail Consultants

Are you wondering how to run a retail business? At YRC (Your Retail Coach), we assist our clients in all aspects of starting and managing a retail business through our strategy-based consulting services. As a result, our retail consultants can assist you with almost everything related to retail business, be it concept, strategy operation, ecommerce or ERP implementation. To put it simply, we can assist clients with just about everything related to the retail business. Our key retail consulting services include retail store business plan evaluation, website design strategy, operations manual or SOP, marketing strategy, layout planning, Software recommendation, ecommerce consulting, project report development, process audit, etc. If you are interested in having the most profitable retail businesses or want to know more about how to develop retail business, contact our retail management consultant at YRC.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.