Why Your Brick-and-Mortar Budget is Skewed
If your company's brick-and-mortar budget is a source of frustration, it's probably because there are several items devouring resources without moving your bottom line.
You might be following outdated growth strategies that are ineffective in the current market or just plain wasteful. Newspaper circulars, poorly planned store expansions and overdone SKUs will also end up costing more money than they make.
On top of that, many retailers lack efficiency in their existing stores, whether that's through too many distracting signs or wandering sales associates, who are either unneeded or need to be trained in a variety of jobs before they can be anywhere close to productive.
Of course, you probably need some of these items in your budget, but too much attention takes money away from more profitable strategies. Focusing more of your precious resources on these five areas will help sales by keeping you relevant and desirable:
1. Innovate your business model. In a mature market, it's difficult to innovate and also drive continued growth, so retailers often turn to store expansion. However, Target's failed attempt to enter the Canadian market and Best Buy's recent sale of its stores in China highlight how this can be a huge mistake.
Instead of following traditional growth strategies, focus on testing and learning from new business models — or even developing something totally original. Creatively explore how you could offer new services, better meet customer needs and solve problems. Seek out new partnerships to use the more expansive reach of bigger companies or the unique strengths of small businesses.
2. Carve out a niche. If you're a local retailer, there's no way you can compete with the quantity and pricing of big brands like Amazon.com or Wal-Mart, but you can always find something unique to offer customers. Focus on the values or services that make you a better option.