What to Consider When Opening a Retail Store in the U.S.
The retail industry in the U.S. plays a significant role in influencing the economy. Retail consumption is estimated to be two-thirds of the U.S. gross domestic product (GDP). As one of the largest and fastest growing sectors in the U.S. economy, retailing can provide an excellent business opportunity.
LOCATION & FOOT TRAFFIC ~ There are many ways to start a retail store in the U.S., but a very important factor to consider is the location. As Howard Schultz, the former CEO of Starbucks, stated, “Location, location, location.” If you have the right location and know where your targeted customers live, half of the success of a retail store is done. Knowing your target customers is one of the fundamental steps of a retail store and marketing activities.
Understanding the foot traffic of your location is one of the most important KPI. Without knowing the foot traffic of the specific location and the dynamics of the neighborhood, it will be difficult to develop the sales forecast of the business. Without this sales forecast, it becomes a challenge to establish the business formula that gives your initial gross profit and the analysis of the expenses. It ultimately calculates the EBITDA and the ROI to understand if the investment makes sense at that specific location.
CONCEPT ~ One of the fundamental steps for the success of your business is designing the interior of your retail store. In retail, everything comes down to getting the details just right. From designing the layout that determines the path of your customers, to telling your brand’s story and creating immersive shopping experiences, and to putting together window displays and signage. All these are essential elements to creating the customer experience.
One thing that gets people into a store is the excitement that comes with seeing a great product or deal. The “right” customer experience strategy will depend on your products, your store, and your shoppers. It’s essential that you know all three in order to come up with the best retail experiences possible.
MARKETING ~ Without sales, there is no business. Marketing plays a vital role in the success of your sales. To be effective during the marketing campaign is to learn and to deliver the right message to your customers. Different tactics can be applied, but the use of social media and paid ads is the most effective one. Social media is beneficial for gaining more attention, awareness and traffic through platforms, such as Facebook, Instagram, and Twitter. Paid ads include activities such as sponsored search engine listings and PPC (pay per click). Marketing takes on a strategic aspect of knowing the consumers. Determining the need for your product to your consumers, how to reach potential consumers, and developing a relationship with the consumers all play a part in marketing.
BUDGET & TIMETABLE ~ There are commonly two types of activities that you need to make sure you do correctly when you start to have an idea of opening a retail store. The first, is to calculate the correct investment budget. The second, is to prepare a detailed time table with all the planned activities that need to be done.
Both activities are time consuming at the beginning, but it will help during unpleasant situations that might occur. To further avoid any problems in your business in the years ahead, financial forecasting is an important aspect an entrepreneur should consider. A contingency needs to be a priority while forecasting the financial needs because there may be unknown conditions during construction that demand more money and create delays in the opening.
In the end, knowing a good location and its foot traffic as well as demonstrating the concept of the store to customers are important factors to the success of a retail store. Having an effective marketing campaign and delivering the right message to your customers are key for sales. Being prepared and organized with your budgets and forecasting will help maintain the structure of your retail business and be successful. There are many variables that goes into opening a retail store in the U.S., but by taking each step of the process correctly, it will provide you an excellent business opportunity.
So now... what’s holding you back from opening one? Shall we?