I constantly advise clients who are experts in producing or manufacturing products who suddenly feel the desire to create brands and open their own points of sale (physical or digital) to directly market products to the final consumer.
On the other hand, it would seem easy to market products of different brands in a store that helps us to set foot in the last link of the distribution chain.
For this reason, I would like to give you five practical tips to maximize the probability of success of your retail ventures:
one. What and for whom? The product is still king and although the experience at the point of sale is important, first of all, make sure you have a differentiated product that solves a real need for a certain group of consumers. The important thing is not what we would like to sell but what really has a demand in the market that we select.
two. How much and why so much? Be sure to formally build a value chain that considers all costs, expenses and gross profit expectations in order to assess the feasibility of selling in your own store and to be able to pay all its operating expenses.
Opening a store implies many more expenses than selling a product through other channels where, although we share a margin, it is not always as expensive and complex as an own operation. Bottom line, make sure you have a solid financial plan.
3. Obsess over the competition. Research your potential competitors in the category in which you decide to open your store. Observe its differentiators in terms of the famous 4Ps, as well as its brand, concept, customer service and communication and customer attraction tools.
But above all, ask yourself: What is going to differentiate my store and my products from those of the competition?
Four. Talk to your potential customers. Even if it is qualitative, make sure to conduct in-depth interviews with some target customers in your category and preferably in the area where you will open the store.
Evaluate their needs, their expectations, their problems to solve and try to connect the added value of your new store to the solution of those needs. Having a good location is not enough. You can have people traffic, but if you do not connect with their needs it will be difficult to be successful.