2019 may be remembered as the year of the upgrade
for small businesses, especially retail. Take a tour of any
commercial area in a Jewish neighborhood these days and
you are likely to see older stores being upgraded with modern
storefronts, lighting and shelving. The retailers will tell
you that they had little choice, given the overall changes in
the retail landscape.
Business owners say that raising capital to upgrade
their retail facility was one of their most challenging tasks,
as funds for capitalizing small businesses have essentially
dried up. Banks are making it so difficult for small businesses
to borrow money that it has become next-to-impossible
to obtain a loan. Experts say that the banks are focused on
the larger loans and are not keen on making the smaller
loans, considering them to be a greater risk than the larger
loans. Even when considering a loan, banks opt for the
few businesses that have a stellar credit history. In other
words, they are out of the “risk” business.
Without the banks, small business owners are left either
to dig into their own pockets or to hope that they can interest
a third party. Many of the store owners I spoke to raised
capital from family or friends, or had some capital built up
in their businesses. For those entrepreneurs who “sort of”
lend themselves money, hoping to recoup their investment
through their business at a later date, they need to be concerned
not to fall into a deeper hole. In other words, revenue
projections must be realistic in that they should factor
in operating expenses as well as excess income to pay for
the investment. Planning properly also
applies to those who secured a conventional
loan, such as being lucky enough to
secure a low-interest loan from a bank.
There is good reason to extend oneself
to pay for modernization. Brick-and-mortar
shopping is on the decline; witness
the many store closings of even some of
the iconic brands. Online shopping has
become the method of choice for so many
shoppers. Large malls have learned that
unless they provide more than an ordinary
shopping experience, they will not be able
to compete. Retailers have also learned
that, since shoppers have so many choices
nowadays, only those who can offer a good
shopping experience can hope to survive.
When customers do opt for a conventional
shopping experience, they are looking
for light and airy stores, where goods are
attractively displayed.
Any modernization program must
coincide with a robust customer service
program. Customers nowadays have
the Amazon option, where they order,
exchange and return without the hassle of
a store clerk probing and questioning the
return. They want to feel wanted in a store
previous, good shopping experience, and it is the best
way to build a reliable customer base.
Connecting with customers is a key component of
building that loyalty. That is why many retailers are
keen to offer loyalty programs, including a store discount
card for frequent purchases. The modernization
of a retail establishment into a place where customers
truly feel comfortable can go a long way toward building
that loyalty, especially when the competition is modernizing
as well.
Many retailers have bought into the “concierge” idea.
This is where the retailer assigns one clerk — now commonly
called an “associate” — to greet customers and
properly direct them. Studies have shown that a concierge
can be a huge spur to promote store loyalty and
actually increase sales. Layout and design are important
too.
Here is an example, described in an article that
appeared in the online trade publication Retail Dive:
and not be an afterthought.
“Can I help you?” goes a long way
only if store personnel follow that up with other questions,
such as, “Did you find what you are looking for?” The customer
wants a complete shopping experience, not just a quick
check-in and quick check-out. Even when customers do not
articulate their desire for good customer service, it has proven
to be a key factor in choices that consumers make. You
might say that the desire to be treated right is built into all
our psyches, and we need not necessarily express it.
Small businesses also face the challenge of customer loyalty.
Repeat customers are probably the best testimony of a
“Perhaps most interesting is how the design of
today’s physical store is evolving. This often takes
the form of smaller layouts, convenient displays
and technology-inspired interfaces. For example,
Target has prioritized small concept stores,
which are stocked with inventory curated to the
local population. REI and Nordstrom build experiences
like climbing walls, special events and dining
into their physical stores for increased engagement.
By changing the way they approach the
in-store customer experience, retailers can attract
shoppers and create more meaningful customer
relationships.”
As any small-business owner knows, the key to
success is being somewhat unique and different
from the competitor. Carrying a specific, popular
brand that not everyone carries is unique and
different. Even small things like offering coffee
to customers or holding small events like demos
puts that unique stamp on a store. One bicycle
store in Connecticut offers a free inspection and
“tune-up” after 30 and 90 days. This service has
increased business by over 50 percent.
One retailer said that the best way to “keep on
my toes” is to get customer feedback. He explains,
“There is no better way to solicit an honest opinion
than to get the feedback from customers,
especially the loyal breed that are a key to your
success.” Some retailers even engaged their customer
base in making design decisions when they
were modernizing their stores. It not only gave
the store an idea of what customers are thinking,
but they actually got some good ideas.
Small businesses face a myriad of challenges,
including finances, competition, labor, parking,
inventory and so forth. But one challenge in
today’s environment dominates: the need to stay
fresh and up to date. In a rapidly changing technological
world, it behooves the small business
entrepreneur to stay ahead of the curve. Some
products and services simply become outdated,
while others are updated. Needless to say, the customer
may very well be plugged in to these changes.
That is why it is imperative that small business
entrepreneurs go to trade shows, attend seminars
and otherwise keep up with their industries.
Finally, small businesses face the ultimate
challenge: “Who’s minding the store? Is it an
owner or a manager?” It is most surprising how
complicated this answer can become. When
asked this question, one entrepreneur answered:
“Susan is sales, Mike is customer service, and
Jerry is inventory.” But who’s minding the store?