Top Three Mistakes People Make When Hitting The Retail Market
A study by Bloomberg claims that 80% of new businesses fail within the first 18 months of activity. With this in mind, it is vital for companies to ensure they plan and prepare to avoid the mistakes and pitfalls that could lead to their demise. This is no different in the retail market. So how can entrepreneurs and businesses hit the ground running when they enter the retail market? Firstly, they need to make sure they avoid the top three most common mistakes that people in the retail industry.
1. An Off-Brand Proposition
Before you enter the market, you need to define your brand proposition carefully. Failure to do so could see your business trying to compete in an overcrowded marketplace where customers are no longer looking for a new provider.
To determine a successful brand proposition, you need to review the whole of the marketplace carefully. This will help you to determine where the gaps are as well as what needs are unmet and underserved. It is much easier to enter the retail market as a brand that meets a requirement rather than trying to launch against successful competitors in a jam-packed marketplace.
The best way to uncover a brand proposition is through gap analysis. A gap analysis uses a diverse range of qualitative and quantitative data to understand current performance and potential. With so many factors available for retail businesses to consider for their gap analysis, it is best to focus on your priorities such as customer satisfaction, return rates and sales.
You can then identify the gap by comparing your business to benchmarks, customer reviews and industry averages.
2. No Value Proposition
If you want to launch a business in the retail sector, it stands to reason that you’ll think your products are great. However, how do you make sure your customers know that? More importantly, how do you show customers that your business and products have value?
A value proposition is essential in showing your clients why they should buy and what they will receive. Sadly, many businesses will promote or advertise without highlighting the value of a product or service. What’s worse, is some business bury their value proposition under buzzwords that don’t mean anything to the customer. All the client wants to know is what the product or service will do for them.
Your company risks failure if the value proposition fails to explain to prospects why they should do business with you over your competitors. One example of a company with a fantastic value proposition is Uber. Uber makes their business clear with their slogan; ‘tap the app, get a ride’. In contrast, rival Lyft offers a range of taxi services which can appear confusing as to which service is right for the customer.
3. Wrong Commercial Proposition
A poor commercial proposition will see your business struggle financially. Every offer, promotion and sales incentive you run needs to, directly or indirectly, boost your bottom line. If you fail to manage your commercial proposition, then it could be catastrophic for your business.
Your commercial proposition must be sustainable. With the right retail and promotion planning, you can make sure that promotions are not only effective but work only to serve benefits to your business. The correct commercial proposition will help you to;
· Attract new customers
· Retain existing customers
· Increase revenue
· Reduce inventory
· Demonstrate ROI on marketing.
It is vital to remember that even if customers back your business, such as through crowdfunding campaigns, that you focus on your financial knowledge. Having money in the pot is excellent, but failing to capitalise on the investment and use it wisely can cause the demise of your brand. For example, Zano raised $2 billion through crowdfunding but when bankrupt ten months later through poor commercial positioning.
So there we have it, 3 big mistakes to avoid when pursuing the retail sector. Good luck and if you need any help don’t forget to check out our range of services at www.visionaryfoodsolutions.co.uk .