Running a retail business is a distinctive flavor of entrepreneurship. You’re developing a unique brand, but you’re also juggling vendors and all the logistics — plus, managing a team. All that in a high-competition industry where each day can bring new challenges.
I’ll be honest: that can be rough on your mindset. You may have heard the statistic that on average, 1 retailer fails every 12 minutes. Perhaps that worry keeps you up at night. Perhaps you’re even putting your dreams of opening your own store on hold.
The truth is, most retail failures aren’t due to a lack of revenue. They’re ultimately caused by procedural issues or poor management. And even if your business survives, you deserve more than that. You deserve it to thrive!
Here’s a concept that can help. It’s about building a different sort of value: retail WEALTH rather than mere wealth. Let’s break it down…
There will be days when your gains are down. That’s just the nature of retail. But success ultimately comes from your ability to create wins. That can include the winning customer experience you create and the KPIs you set for your store. I’m all about celebrating your achievements — and looking for new opportunities to grow.
A winning approach to retail may include:
In short, the W in WEALTH stands for winning. That doesn’t mean you’re blindly optimistic or that you should place vanity metrics above all else. Rather, it’s the attitude that (a) you and your team can achieve your goals, and (b) your top priority should be making sure your customers feel like winners.
We’ve all been in a store that seemed like a ghost town, where no one seemed happy to be there, not even the customers. Don’t let your store get overrun by zombies. I know it can be challenging to keep up the energy after long hours, which is why you must energize your vision. When good energy is baked into the culture, it’s easier to maintain.
E could also stand for engagement. You engage with your team, they engage with your customers, and so on. That creates a positive experience that will keep both customers and employees coming back.
I often speak about the importance of leadership for entrepreneurs. That’s especially important for retail business owners. Between slim profit margins, supply chain issues, and difficult customers, there is a lot of stress. You must be resilient in the face of these challenges — and able to motivate your team. They need to feel encouraged to co-create that good experience. They don’t want to feel like faceless robots.
So, the A in WEALTH stands for admiration. Yes, you want your team to admire you. I don’t mean kissing the ground you walk on, but simply feeling inspired and supported by you. You want your customers to admire the store and the experience they have with you. And, especially if you’re a local brick-and-mortar store, you want a connection to your community. You have the potential to become a neighborhood fixture. That’s a surefire way to maintain your customer base when times are tough. If there’s one thing we’ve learned from the pandemic, it’s that people did their best to support their favorite local shops.
I mentioned that many retail businesses fail because of process or supply issues. Here’s where the L in WEALTH comes in: you must be lean. Many entrepreneurs have a tendency to bulk up, to try everything and add on lots of goodies. They want to sell as much as possible and they buy all this software, gadgets, etc. they think they need.
To succeed in retail, you must be nimble, and to be nimble, you must be lean. Slim down your offerings to those that are most profitable. Cancel the subscription to that software you never use. Streamline your workflows so all the stocking, merchandising, etc. gets done sooner. Because when something unexpected happens, you must be able to adapt quickly! Plus, the less you spend on unnecessary bloat, the better your profit margin.
Retail is one of those industries where you can have an incredible day and go home feeling on top of the world…then have a sharp drop in sales that leaves you wondering how you’re going to pay rent. The key to riding this rollercoaster is tenacity. Ideally, you have a strong, clear vision that motivates you every day. You know that the rollercoaster has a destination, and you’re confident that you’ll get there.
A huge part of retail success is a positive entrepreneurial mindset. You must believe that each setback is just that…a setback. You can always pick yourself up, dust yourself off, and get back to executing your vision.
This is crucial for leading your team as well. If you act like the sky is falling every time your numbers go down, how are your employees going to feel? Your tenacity encourages them to weather the storm together.
Happiness is that intangible yet powerful element of every successful business. Even Walt Disney World, which is essentially a giant retail destination, calls itself the “happiest place on Earth.” Now, I’m not saying you have to fill your store with character actors and animatronics, but you absolutely want to create a positive experience for your customers — and your team.
Think of happiness as both the means and the goal. How can you cultivate your business’s sense of enjoyment? I’d say it comes down to celebration. Just as Walt Disney World celebrates its history, stories, and sense of magic, your business should celebrate its accomplishments. For example, my store, Shoetopia, has its core value right there in the name: we want people to make their feet happy. When someone finds their perfect shoes, we celebrate it.
Happiness is an incredible motivator. It keeps you going even when times are tough. My advice: find something to celebrate every day in retail, and your success will be in easy reach.
There you have it. In retail, WEALTH stands for “winning, energy, admiration, lean, tenacity, and happiness.” Those elements work together to create a positive experience for both your customers and your team. It all comes down to your mindset. Retail is tough. But by celebrating your accomplishments and letting your vision drive your efforts, you can become a stronger leader with better processes and bigger profits. And that’s the secret to retail success.
This blog is inspired by an interview with Dan Holman, retail leadership expert and host of the Wealthy Retailer podcast. You can listen to our chat on the Simplifying Entrepreneurship podcast here.