Successful Retail Innovation: Rules & Steps

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

In business, profitability is king. Becoming profitable, however, requires some work. In this lesson, you'll learn more about some rules your business can follow for successful retail innovation.

Profitability Rules

You can have the newest business, the biggest business or the business that spends the most on marketing and advertising, but if you don't have this one thing, the rest is unimportant. What are we talking about? Profitability.

Without profitability (your business' ability to make money), you won't survive long. Think of all the businesses you remember from your childhood. How many of them are still in business? The ones that are long gone failed to master the art of profitability. Without it, a business cannot survive.

So, how do you achieve profitability? It's not just as simple as setting up a store and opening your doors. There are some rules or steps most fruitful businesses follow that allow them to be profitable and survive in an ever-changing market. Let's take a look at the path successful retail organizations follow when innovating products and services that lead to profitability.

Rules for Profitability

No business begins with a goal to fail. Yet, hundreds of business owners find themselves shutting their doors every year. Businesses that succeed do so because they follow a blueprint for profitability. Consider these rules for your business.

1. Put customers first. When you allow everything you do to be customer-focused and customer-driven, you will be more likely to be successful. After all, customers are the ones who keep you in business. Focus on what consumers want and need and look toward the future in an effort to get ahead of key trends that can help keep you on top.

2. Watch your competition. Whether it's the store across the street or in the next town over, keeping an eye on your competition is both smart and necessary. What are they doing that's working? Emulate it. What are they missing where you can fill the gap? Understanding what is happening in your market and industry, by watching both your direct and indirect competitors will keep you innovating. Innovation leads to success.

3. Understand your strengths and weaknesses. If you're a business owner who struggles with financial planning and budgets, hire someone who gets it to manage those areas for you. Knowing what your strengths and weaknesses are will help ensure you focus your efforts on the things you're good at while not floundering on areas where you need a little extra help.

Position, Plan, Focus

4. Position yourself. Do you know where you stand in the market, who your customers are and what your unique selling proposition is? Positioning helps you determine your place, your target audience and what you bring to the table that no other retailer does. This allows you to capitalize in all the right areas and continue growing.

5. Focus on customer experience. Look at your product line, the services you offer, the way your website is laid out and how your store is designed and think to yourself, ''How are my customers experiencing this?'' Looking at every aspect of your business through the eyes of your customers will help you make critical decisions that will keep them satisfied.

6. Create a solid business plan. Too many business owners have a great idea, but no clue how to get to their goal. That's where a solid business plan can create a foundation of excellence. Figure out your sales goals, labor hours, location, sales strategies, promotions and other business fundamentals that will keep you on the road to success.

Design and Location

7. Design stores efficiently. Have you ever been in a store that was aesthetically pleasing, but difficult to navigate? While good design is great, customers ultimately want to be able to find the merchandise they came for quickly and easily. Don't create a store design so confusing that customers leave in frustration and your cash registers never ring.

8. Put yourself in the right location. So, the hottest shopping center is town has to be your best plan for locating a business, right? Maybe not. Can you afford it? What's the traffic flow like? Finding the right location for a toy store may not be the right location for a pet store. Know your market and use that to guide your retail location.

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