The five principles of retail

five principles of retail - Shop sign{{}}If you are running a retail business — whether bricks and mortar or online — there are five core principles you need to adhere to. From customer care to the four Ps, Antony Welfare, author of The Retail Inspector’s Handbook, explains what you need to know

1 The customer is the most important person in your business

The customer holds the key to every successful retail operation. Based on my 20 years' of experience with a number of different retail businesses, this article will introduce you to the journey to make your business customer-focused, and realise the potential you have to make your retail business a success.

The main retail principle to master is the customer; the customer should be the centre of your business and everything you do must revolve around that customer. Knowing them, and focusing on them in everything you do, will help you grow your business and your team — the customer is king.

2 Retail is detail

One of the most famous principles in retailing is, of course, “retail is detail” — this is where the challenge lies: how do you become more detailed and what detail should you focus on? You need to address and improve your understanding of your customer. To do this, every retailer must focus on the detail and get the detail right the majority of the time. Mistakes are OK, but you must learn from them and do not repeat your mistakes. Customers will allow you some mistakes, but too many will turn them away; understanding the detail is a key skill to master in retail.

3 Understand the four Ps

This is a very old principle but still has validity. This retail principle will help you understand the overall foundations of a retail business; the 4 Ps: Product, Price, Place, Promotion. These are the basic foundations of a successful retail business.

  • Product: You need products that your customers want to buy and a product range that will satisfy your customers’ needs and desires. The products must also deliver a profit for you to have a successful business;
  • Price: Price must be consistent across the marketing mix and meet all requirements for your business. You need to price your product range at the correct level for the customers to be able to buy your products, and for them to gain value from your products. This could mean pricing high or low — this very much depends upon your customer offering;
  • Place: You must provide somewhere for your customers to purchase your product, be that a physical store, a catalogue or an e-commerce website;
  • Promotion: Once you have a product — at the right price, in a place where the customer can access it — you need to tell them about this and promote your business and your products; make sure your customers know that you and your products exist and are available for them to enjoy.

4 Go the extra mile for your customer

Providing great customer service starts with understanding and knowing your customer; however, knowing them is the start of the journey and you will need to deliver more than just customer service. To be successful you must deliver world-class customer service; you must “go the extra mile for the customer”. You and your team must continually go the extra mile for the customer, each time delivering just a little more than they expect. Doing this each time you and your team interact with your customers will win them over and make them loyal over a long period of time.

Antony Welfare5 Location, location, location

The final retail principle is: Location, location, location. History has dictated that this is one of the most important factors in the success of a physical store, and still to this day it will have a major impact on your success. The best location of your store will be dictated by your brand and product strategies. For example, a supermarket operation needs a car park and a high fashion store needs to be in a high fashion area that attracts the right customers for the store. I would argue, however, that location has less effect now than previously, due to two main factors: the first being the flexibility of the customers; now we often travel more, and the second being the internet.

The internet has changed our shopping habits and will continue to do so. E-commerce websites have opened up the world of “non-geographic” retail — a retail world without the need to visit the physical store. The emergence of “etail” from retail has been the biggest change over the past 20 years.

The journey from retail to etail has been quick, and we need to embrace the world of etail and ensure we understand its effects on our customers. The etail world is growing significantly and with new technologies, such as iPads and mobile commerce, it will continue to change the opportunities in the world of retail.

Written by Antony Welfare.