A guest post by Justin Solomon

There are 2.14 billion online shoppers around the globe today, and that figure is only expected to rise. In this article you will learn why there are many retail business failures or mistakes. You will also learn how to improve business retail. Many retailers aspire to own a chunk of this market with a flourishing retail operation. However, to achieve rising, if not stable sales over time, retailers must work incredibly hard given the industry’s increasing competition.

Achieving a profitable business with positive cash flow takes a lot of effort, creativity, and strategic long-term plans.

Before going any further with this article, allow me to spruce some of the past articles from Earn Online Lesotho. Mike Abelson wrote about real estate business, apart from that, another article was places where you can find chopped vegetables near Maseru.

The retail industry has encountered various challenges as a result of not just significant changing consumer demands over the past few years, but also the onset of the COVID-19 pandemic. The way businesses function has changed today. You have to be aware of the best management strategies if you want your retail business to thrive.

Once you’ve learned about the typical mistakes you need to avoid, you’ll be capable of coming up with effective management strategies for your retail business. At the forefront, making sure you get the fundamentals right is essential to establishing your retail business.  In this article, we share with you the most common pitfalls of a retail business and how to effectively avoid them.

1.  Choosing the Wrong Partner

Your retail business can suffer terribly if you choose the wrong business partner. Make sure to choose a partner who is as passionate and committed to the business as you are and has the same goals for the business. A significant amount of time, effort, and financial investment go into starting a business. A strong partnership foundation can help your retail company grow. Get to know your potential business partner and their vision and plan for the company before settling on your choice.

2.  Choosing the Wrong Location for a Retail Store

Your retail sale is heavily influenced by the location of your store. There are two ways you might go wrong here:

•  Choosing a remote location to save on rent: Unless you have a relatively busy online store, choosing a remote site is not going to help your brand.
•  Choosing a prime location shared by direct competitors: Since you and your rival brands are attracting the same audience, there is a lot more competition on this site, unless you offer more competitive rates and discounts that will be of significant value to your customers.

We recommend you choose locations that are easy to find and have better footfall that can attract new customers. Don’t merely choose areas based on cost and convenience. Select a location that will bring together several benefits to work well for your retail operation.

3.  Not Having Working Capital

The amount of working capital required for any type of business is largely determined by its operating cycle. This income will be used to purchase more products while continuing the cycle. Retailers will have longer cycles than similar businesses since they need to buy a larger quantity of merchandise. For example, apparel companies rarely sell all their products at one time.

To meet other expenses like employee wages, marketing, inventory, and expansion, retail companies will need working capital.  With good working capital, you can serve your customers better and achieve your business’s primary goal of maintaining and growing sales.

4.  Wearing Too Many Hats

While daily operations can seem easier, it is impossible to manage your retail business regardless of how small it is. For example, designing your product, sourcing the material, manufacturing, selling, organizing your inventory, shipping, marketing, ordering more supplies, accounting, and taxes cannot be managed by one person.

When you micromanage your business, the quality of your company can fall. Hire efficient employees and assign tasks responsibly. Your company will benefit from this and bring in more customers.

5.  Not Having a Brand Identity

Why did you start your business? What do you intend to sell? Who is your target audience? What makes you different from other brands? How do you want to portray your business to your potential customers? While the answers to these questions can change in the longer run, they will help you understand what you are as a brand.

Instead of having thousands of products at your retail store, narrow the catalog down to define your brand. For example, if you sell football merchandise, you wouldn’t store only footballs at the store, nor just snacks, coffee, DVDs, or furniture. Instead, you would sell jerseys, studs, socks, gloves, etc. to attract more customers. Everything in your inventory should be relevant to your brand. This helps to build an identity and stand apart from your competitors.

6.  Lack Of a Business Plan

It is essential to strategize your business plan before you start your retail business. Without it, your company will have no clear goals, find it difficult to track progress and act upon spontaneous decisions that can be bad for the company. Designing a business plan will especially help new start-up founders understand the basics of business.

Having effective roadmaps, action plans, and strategies from the beginning make an enormous difference in the world of business. A strong business plan can help your business stay afloat in an unpredictable market, and help you make wiser financial decisions.

7.  Not Auditing Your Business

Auditing is critical to keep track of everything happening in a retail business. A lot of businesses make the mistake of not conducting internal audits consistently or at all.  Regular audits help ensure that quality requirements are met and operational procedures are followed correctly. Audit systems also allow you to track key performance indicators and also help identify problems and take corrective action in a timely and efficient manner.

8.  Not Automating Your Business

Running a retail business is not an easy task. There are a lot of daily processes that you may not be able to keep track of. To succeed, entrepreneurs must be able to manage their time effectively. By streamlining processes like workflow task management, retail inventory management, automated purchase orders, retail auditing, and more, retail businesses should adopt technology that can help streamline processes, reduce human error, improve productivity, and save time.

9.  Poor Inventory Management

Inventory management is one of the most important factors retailers need to pay attention to. Manual inventory management reduces the efficiency of your business as it can cause errors. Make sure your stock level is sufficient to meet customers’ needs and not too low or too high. By automating inventory, the system will alert you on the inventory count and low stock products, so you can restock them accordingly.

10.      Poor Customer Service

With top-notch customer service, you can enhance both your in-store and online experiences. Today’s consumers have an absurd quantity of options, so if they had a bad experience, they may never go to the store again. According to a recent survey, about 50% of customers said they would move to a competitor after just one negative experience. Staff should be instructed on how to handle customers’ queries and complaints and improve their experience by providing recommendations and other helpful guidance.

11.      Not Knowing Your Target Audience

Your retail business can be successful if you know who your target audience is and what they want. Many brands don’t bother knowing what their target market wants and continue to sell the wrong products. In this digital era, people speak. Businesses need to listen to what they want instead of wasting capital. Before starting your business, determine your target audience, research their interests, behavioral patterns, demography, etc. Not only should you target the right audience, but listening to them is equally important. A positive approach to feedback and criticism can take businesses a long way.

12.      Not Having An Online Presence

Consumer behaviors have undergone a significant change in the 21st century. Whether or not a consumer is actively looking to buy something, they are always influenced by the internet. The retail industry has been transformed by the accessibility of the internet, smartphones, social media, and e-commerce. All successful businesses today have websites, and social media pages and their products are listed on major e-commerce platforms. As your consumers adapt to changes, your business needs to show its presence in all ways possible.

13.      Offering Too Many Discounts

It is undeniable that offering discounts makes products and services look more attractive and accessible. But if you rely too much on discounts to increase sales, you can run into problems. Discounts may seem like a great way to increase conversion rates and increase sales, but they eat up margins and hurt your brand.

Depending on discounts to boost sales has some major drawbacks. You can tarnish your brand reputation and can be thought of as a “cheap” brand. When was the last time any of us bought a Bath & Body Works product for full price? Customers can get into the habit of “waiting” for a discount before making a purchase. Year-round discounts can also eventually hurt your profit margin. Lastly, when you give a lot of discounts, customers can question the product quality and would not want to pay the total value.

But there are many ways you can grow your online sales without resorting to discounts. Here are some of them:

• You can give a complimentary gift with a purchase.
• During year-end sales, instead of giving a 50-60% discount, you can include a “Buy 1 Get 1” offer to clear your stock.
• Customers also love free shipping and free returns. To retain your customers, introduce a loyalty program or reward points system.
• You can provide a one-time discount on first purchases so that customers can experience your product.

14.       Not Having a Marketing Plan

If you have an online presence, you should create a marketing plan so that your customers know who you are and where to find your products. Every online business needs a comprehensive marketing plan that covers all the foundations, but some channels are more effective than others. Some companies will work well with pay-per-click (PPC) advertising, while others shine in SEO and social media.

Email is also a reliable marketing channel. Whatever the plan, make sure it’s right from the moment you launch it. Of course, new opportunities are always created, but a strong foundation enables steady and scalable growth. It is also essential to continuously test and measure marketing results. Test, fix, repeat, and improve your marketing efforts for the best strategy.

Sum up

Most people do not start their entrepreneurial journey because they are terrified of making mistakes. But if you are willing to learn and adapt, these mistakes help you do business better. Missteps will inevitably occur as your business flourishes. What changes is how we deal with them. We learn just as much from failures as we do from accomplishments. Recognizing the typical retail business blunders listed in this article can put you on the right track to conquering all of the challenges that your business may bring.