Your Growth Checklist: 5 Dimensions of Scalability
When an ambitious entrepreneur or leader launches a retail business — whether e-commerce or brick-and-mortar — one of the first and most pressing considerations should always be scalability. Specifically, this translates to the potential for a product, structure or process to stretch to meet the size and scale of the given customer landscape. As business leaders, most of us are familiar with the idea of scalability and like to think we have a strong grasp on why it matters. As co-founder and president of Pink Lily, I’ve tried to stay knowledgeable about these kinds of things, and I’ve tried to keep scalability top of mind as we’ve made strategic business decisions in the last few years.
That having been said, in my early startup days I never really took the time to delve deeply into the specific ways that my business could be challenged by rapid or unexpected sales growth, nor had I mapped out solutions for those challenges. Similar to many other entrepreneurs and small business owners across the U.S., my wife and I started our company simply with a vision, a desirable product and some good business sense. We’ve since learned much more about the complex and fast-changing retail marketplace, and I now see five key dimensions of retail scalability that I regularly use to inform my business decisions. My hope is that this overview could become a sort of checklist for you to continuously evaluate your own areas of opportunity, then recalibrate as appropriate:
- Product: The first and most obvious opportunity for scalability in retail is in the products you sell. This means offering products that mirror the wants and needs of consumers, no matter what those products happen to be at the time. And since consumer demands and expectations are constantly in flux, meeting their needs means creating an adaptable product. At Pink Lily, this translates to continuous communication with our customers about our buying decisions — putting them in the driver’s seat and letting them have a say in the products we offer. We’re always listening to and interacting with our customers via social media, and this gives us the information we need to make changes to our product line in real time, keeping our goods hyper-relevant to the marketplace.
- Distribution: In retail, distribution is nearly as important as product. For brick-and-mortar retailers, scalability in distribution means establishing and fortifying the channels that will ensure your stores are fully stocked with the most updated products at all times. After all, empty shelves or missing sizes can cause monumental harm to a company’s reputation with consumers. For e-commerce retailers, scalability in distribution primarily comes down to ensuring the fastest shipping possible, as consistently as possible. Ever since Amazon.com pioneered two-day shipping, we’ve seen customer expectations change in regards to distribution. Many customers now expect to receive their orders within a few days at most, and delays can decimate the likelihood of repeat business.
- People: An often overlooked dimension of scalability is the scouting, hiring, onboarding, training and engagement of great people. A fast-growing business requires a fast-growing team, and many of us have witnessed firsthand the problems that arise from hurried hiring decisions or lackluster training programs. The key to ensuring your company is scalable in its human resources is to always be on the lookout for great talent, and to develop proven, consistent processes for interviewing, onboarding, training and engagement. Don’t wait until you’re growing faster than you can handle, and then look to hire and train the right people. Instead, get out ahead of the growth and begin building your army of well-trained and highly engaged employees right now. Not only will they come in handy to service your growing customer base, they’ll also help you reach those growth goals in the first place.
- Equipment: The ability to quickly, efficiently and cost-effectively manufacture or source enough product to serve all potential customers depends largely on investing in high-quality equipment. Whatever your retail enterprise, your equipment should ideally be purchased and maintained with growth and scalability in mind. This means springing for the more expensive machine because you know that soon you’ll be serving enough customers to make it worthwhile, even when the purchase isn’t the friendliest to your bottom line or doesn’t seem to make sense with your current customer base. These kinds of investments pay dividends in the years to come, as they outperform and outlast cheaper options. You’ll also rarely have to worry about the late shipments, unfulfilled orders or reputational damage that can come from broken or malfunctioning machinery.
- Technology: Finally, it’s never been more important to consider the scalability of your technology. Consumers are looking to brands’ websites, apps and purchasing platforms to be highly intuitive, highly engaging, and constantly functional. The smallest slip — whether a simple glitch or an overrun server — can frustrate consumers enough to send them immediately to your competitors, and can even cause irreparable reputational harm over time. Today, it’s simply assumed that the consumer-facing technology you use to support your brand will be of the very highest quality. As such, investments in growth-friendly tech must be made before your site visitors or digital sales overwhelm your system. As a fast-growing player in the e-commerce space, I can tell you from firsthand experience that it’s far better to make the most upgraded choice than to simply hope for the best.
Chris Gerbig is co-founder, president and COO of Pink Lily, one of the fastest-growing online retailers of women's clothing in the U.S.