Key Considerations to Ensure Retail Start-Up Success
Despite recent opinion, the UK consumer is not ‘on strike’ and the high street is not dead.
The clear evidence of this in the UK is highlighted by the Office of National Statistics (ONS), which clearly states that year-on-year, retail spending is up in both monthly and annual terms. The UK consumer, in fact, spends more per head on retail than any other consumer in the world.
However, for retailers today, there are some key questions that need understanding:
- Where does the consumer prefer to spend, in-store or online?
- Does the high street have the potential to revive itself and become more relevant and appealing? If so, in what form?
- What motivates customer spending?
- How should retail start-ups respond to these challenges and control their resources?
These critical questions and answers are what lies at the heart of The Retail Start-Up Book. Below, we look at what key elements you should consider to ensure your start-up is a success.
Taking inspiration from the Middle and Far East
It’s interesting to take note of the standards of retail excellence that exists today in the Middle East and Far East. The consumer in these parts of the world are ‘new’ shoppers and have not, like those in the West, been exposed for more than 120 years to sophisticated shopping streets, grand department stores and excellent value shops catering to every need.
This, without a doubt, has caused complacency and an ‘if it ain’t broke don’t fix it’ attitude in the West, where only very few of this ailing group have survived and prospered today. In virtually every case, those retailers who have survived - including many world-famous brands - have been taken over by people that are aware of today’s customer needs and have responded brilliantly to their increasing expectations.
In the new shopping regions of the world, however, that complacency has never existed because there is no retail history. The retailers, some well-known in the West and some new local brands, not to mention the physical spaces they operate in, had to appeal immediately to the new shopper. It did not matter whether the retailer was super luxe, whether they sold mainstream products, or were a start-up; they simply had to demonstrate excellence from day one and never let those standards drop.
The key elements that deliver and reflect this level of excellence are:
- Product clarity - What does the shop sell?
- Physical attraction - How clearly are the goods laid out?
- Superb lighting - How can lighting bring out the life of the goods?
- Service - Do the people understand the product and can they explain it politely and with expertise?
- Having an effortless process of payment and recording of customer data
- Beautiful (and green) packaging
- Social media interaction
- Sales follow-up and information flow about new products
These points are equally relevant to online retailers, which have had a huge impact on bricks and mortar shops. The consumer, particularly in the UK, spends up to 30% of their total spend online and has, therefore, become used to the speed of product identification and ease of purchase available, which has infiltrated into their expectation when shopping on the high street.
If a start-up or even an established retailer ignores this, they ignore it at their peril.
Key challenges every start-up should consider
Based on this, it is essential that a retail brick and mortar start-up carries out very careful due-diligence on the location they intend to launch in.
Local authorities and landlords, together, have a responsibility to ensure that the high streets and towns become community hubs with a much wider range of facilities that include: regular (weekly) entertainment for children, ease of parking and transport connections, health and exercise centres, bars, restaurants and a carefully chosen mix of retailers that ensures that no single type (e.g. hairdressers, charity shops) dominates.
The new start-up must ensure their financial and human commitment is placed in an area that understands today’s customer expectations and is prepared to overhaul its town. Rents are too high (and gradually landlords are understanding this), so start-ups must be extremely cautious not to be dragged into an expense that undermines the business. The Retail Start-Up Book covers this point in detail and suggests ways to avoid this onerous overhead.
As well as having clear financial priorities (also set out in the book) the key for every start-up before any money is committed is retail relevance; having a clear and well thought-through vision and strong argument about why your proposition will be successful.
If a new start-up wants to understand what excellence looks like physically, it’s worth taking a close look at some of the shops in London’s great museums, such as the V&A, as well as the small shops springing up behind Peter Jones in Sloane Square, the variety of openings in SoHo and the boutiques in Marylebone High Street. What all these areas of London have in common is that they are controlled by single landlords, which should be a warning to the local authorities and their landlords that not working together is a sure way to destroy their hubs.
Our history proves that the community is always behind positive change and newness, which they want now.
We are starting to see a high street revival as new entrepreneurs, enlightened local authorities and sensible landlords, join hands to make this happen.