When you hear of a store closing, you automatically think that something must have gone wrong. You never stop to consider that the decision may have been strategic or intentional. You just naturally assume the worse.
Yet in our experience – after years of working with local and national retailers – we’ve found that store closures are often deliberate and are done as part of a long term strong trading strategy that will enable them to improve their retail repositioning.
Let us explain…
For most businesses, the need to close arises when – despite their best efforts e.g. implementing new designs or offering new products – a demographic no longer responds to the brand. As a result, their footfalls drop, their sales decrease and the overall performance of the store is no longer capable of meeting the costs of keeping it open.
When faced with this data, quite often the safest and most sensible thing for a business to do is to assess and reprioritise their top trading stores – i.e. determine who is producing the most profits – and disband any locations that are struggling.
This is especially true, if your store witnesses shifts in purchasing options for products. Given the choice between coming to your store and jumping online; many customers will take the easier route of buying online, as it is simpler and less stressful.
Yet, just because one of your stores is underperforming, doesn’t mean this situation cannot be turned around…
In fact, if we have learnt anything from our customers is that you don’t have to have a physical store in every town or on every high street in order to succeed.
Take the online purchasing options we mentioned earlier. While they may be a contributing factor to your store closing; you can embrace this shift towards online sales and incorporate it into your marketing strategy. In doing so, not only can you ensure that your business stays ‘present’; in the long term you will be able to boost efficiency; better serve your customers needs, and save on the cost of purchasing/renting a building space.
- Efficiency – the biggest draw for creating a website is ecommerce fulfilment. By centralising product/service requests, it will enable you to reduce the processing times for orders, as well as get your products into the hands of your customers faster.
- Better serve customer needs – offering customers online options, as well as physical stores can gives them the flexibility to choose ‘how’ they receive their order, thus increasing customer engagement with your business. For instance, they can either benefit from reduced shopping distances – meaning their order will arrive at their home quicker – or they can choose to collect in-store. In either case, by giving them greater control, you will boost their inclination to pick you over your competitors.
- Save on the cost of renting/buying building space – choosing to close a location that is not yielding results can prove to be incredibly useful as you can use this extra money to: support your high performers or reinvest in a brand new location that may perform better. NOTE: utilising location technology can help you to pick where to place new stores, reducing the risk of future store closures.
You may also want to consider using temporary pop-up shops to test locations or try different trading strategies in unsuccessful locations e.g. building hype to drive higher sales in a limited time period.
See what we mean? Store closures don’t have to signify failure or loss.
Instead, by being more strategic about the size or square footage of your store – and what you use it for – you can use this data to secure/protect your long term trading strategy and turn these closures into a benefit for your business.
For more information on how to evolve your trading strategies, or deal with store closures/moving locations/redesigning your store space; contact our team at Resolution Interiors today.