Lagerquist Accounting Blog
Read the latest blog articles from Lagerquist Accounting and Advisory.
Subscribe for Blog Updates
Recent Blog Articles
How an Outsourced CFO Can Help You Establish Accounting Practices To Minimize Risk and Maximize Profit
An outsourced CFO can provide your small business with the accounting services and financial management advice you need to successfully navigate from your break-even point, so you can maximize profits and boost ROI.Read more
Leveraging the Expertise of an Accounting and Advisory Firm to Support and Optimize Your Accounting System
This fourth article in our series outlines the benefits of partnering with an external advisory firm in optimizing your business finances. We look at the comprehensive services offered by outsourced accounting specialists and how they can support your in-house teams and processes toward ideal results throughout the work year. Bookkeeping is an essential aspect of […]Read more
Lagerquist’s third part of an in-depth blog series explores how partnering with a reliable external accounting and advisory firm can help your company avoid five of the biggest pitfalls faced by businesses. External accounting specialists provide extensive real-world experience that help companies navigate the most significant financial challenges with minimal guesswork.Read more
5 Essential Ways to Rethink Customer Acquisition for Your Small Retail Business
Posted by Lagerquist Accounting & Advisory
As a small retailer, you face a very unique challenge: The time, effort and investment involved in just getting the business up and running, the store open and the shelves stocked may consume nearly all of your energy. And yet, the old adage of “build it and they will come” clearly no longer applies to retailers, whether large or small.
The overwhelming impact of the “retail apocalypse” is clear, with more than 75,000 retail stores in the U.S. closing since 2010. In the meantime, the cost and competitive pressures of surviving the online shopping explosion are equally as daunting, with even fewer and fewer online brands succeeding with e-commerce even as Amazon overwhelmingly dominates the e-tailing universe.
With these odds stacked against you, how can a small retail business survive, let alone thrive? Here are five key strategies you can use to rethink your customer acquisition strategy for the post-modern consumer and beyond.
1. Rethink the role of your retail space.
We tend to think of retail space as being about one thing: Product presentation. After all, the more product you stock, the more product you can sell, right? Except that that’s wrong. A more focused space with less cramped product positioning will allow customers to browse higher-end products and spend more time considering additional purchases.
Also, over-purchasing inventory can destroy your cash flow faster than almost any other retail operations decision other than overpaying on your retail lease. Finally, consider converting part of your space into a programming area that can be used for product demonstrations, free and paid customer events, or private events and parties.
2. Focus on becoming the category thought leader.
Taking that theme of creating programming space further, consider how you can go from being another “also-ran” to becoming a category thought leader. To be clear, you almost definitely cannot win by being a ‘category killer’ like big box retailers. To put it a different way, if you run a small hardware store you can’t compete in any way against the likes of Lowe’s or Home Depot, no matter what you do.
But what you can do is become the go-to in a specialized segment of the space. For example, maybe your store focuses on the needs of the home do-it-yourselfer and combines products people would find at Home Depot with those they’d also find at Michael’s Arts & Crafts. Now, you’re saving customers a trip and taking ownership of a category that the big box players struggle to win in.
3. Make your store a sales base, not a sales box.
Most retailers think of their stores as the place where sales are made. And certainly, that is great when it happens. But the store is not the only place a sale can be made, and in fact it probably shouldn’t be in today’s marketplace dominated by Amazon and the big box players. What you can offer that others cannot is an in-person experience, but that experience doesn’t have to happen in the store.
For example, an independent wireless retailer decided that instead of trapping its sales people in the store, it kept a base team in the store but sent most of its salespeople into the field to meet with small businesses face-to-face and offer wireless solutions to their teams. This took a small consumer-focused store that typically sold one phone at a time and converted it into a sales machine that regularly generated 5-15 phone deals at a pop.
Similarly, a small hardware chain decided to double-down on working with small home contractors, but unlike Home Depot and Lowes, they sent their estimators and project planners to the job site to meet with contractors, work up orders on the fly, and then deliver entire job packages of lumber, fixtures and consumables directly to the job site in staged timing that suited the needs of the contractor. This saved the contractors valuable labor and project time, which they were more than willing to achieve in return for a slightly higher product price.
4. If you go online, hyperspecialize.
So, what about going online? Should you do it? Well, certainly you need to have a dynamic and brand-focused online presence, but what about e-commerce? And how can an online presence help drive business to your store (or to your business, regardless of where or how?). The key here is to avoid competing where you can’t win, and focus!
A small bridal boutique in central Pennsylvania was suffering from sluggish sales for many years, not the least due to its location in an under-trafficked retail location in downtown, not near the regional shopping mall. However, the advantage to the location was lower cost and the room and space to create a truly memorable shopping experience. Recognizing this, the owner decided to hyperspecialize in antique and heritage wedding dresses, rather than competing in the mainstream market.
By specializing in this segment and becoming a recognized expert on the field, she was able to create a destination experience — people drove or flew from other areas across the Northeast to come to scheduled appointments at her store and find dresses they could not locate anywhere else.
5. Create a powerful destination experience.
This brings up the last key strategic consideration, which is how you can create a destination experience for your retail business. Remember, retail and tourism are two halves to the same coin in most cases: both are about creating an experience that is of such high value that consumers will gladly invest disposable income on your products or services. That means that you have an opportunity to create a truly special experience that can be a part of a tourism or destination package. And that requires both specialization and coordination, so talk with your regional tourism bureau and consider how you can tie your business in with the strongest tourism themes of your community and take advantage of that business along with local traffic.
What all of these strategies share is a willingness to radically rethink how to acquire new customers, and what exactly to offer to them both in terms of products/services and in terms of retail experiences. By focusing on these creative concepts, all proven out by successful small retailers who have sidestepped the retail apocalypse and the pitfalls of commoditization, you can find the path to growth that best suits your small retail business for today, and the future.
Lagerquist Accounting Blog
Welcome to the Lagerquist Accounting & Advisory Blog.