Britain is a nation of shoppers, with the retail industry currently worth around £421bn, employing over 3 million people.
Anyone considering opening a store is in great company. After all, visiting a retail store in person creates interactions that can’t always be replicated online. Whether a store offers enthralling product demonstrations or simple convenience, sometimes shopping for products or services in person provides the best customer satisfaction.
While opening a shop in the current climate isn’t without its challenges, for businesses it can be hugely rewarding to interact with customers on a more human level. Some service providings from hairdressers to the corner shop will always be required in the flesh, regardless of changing consumer habits. Likewise, for popular or niche retail concepts, getting things right can create a huge buzz in the local community.
So how do new retail stores get shoppers through the door, and what does the process of opening a shop look like? Here are some of the fundamental basics that anyone looking to break into the world of retail must consider.
Understand What The Retail Sector Looks Like Today
Our desire to shop hasn’t gone away. But with the rise in ecommerce, how we shop looks a little differently than before. Plus, the pandemic meant shoppers couldn’t get out to visit shops in person, even if they wanted to. In combination, these have proved to be especially tough challenges for the retail sector, with more than 17,500 chain outlets closing in 2020 alone.
Some of the retail stalwarts the British high street has lost in recent years include Woolworths, BHS and Debenhams. Many smaller chains and independent stores have also closed their doors for various reasons.
However, from the big cities to the bustling towns, and even the quaint villages - nobody likes seeing empty swathes of retail units. So, anyone considering opening a shop should know their presence will be warmly welcomed by residents, nearby businesses and local councils alike which is highly encouraging.
Furthermore, the government is also keen to kickstart new initiatives to revive our high streets. This includes the Levelling Up and Regeneration Bills, which hope to bring around Vacant high street shops back into use.
Retail expert Mary Portas is also involved in several regeneration schemes, citing local retail “is the way we are going to be living” when talking about the future of the retail industry, in a recent interview with Evening Standard. Without a doubt, creating a successful retail business in the current framework is all about looking to the future rather than the past. The UK has seen many casualties of the high street, where dated concepts or a mismatch of customer demand versus what’s on offer simply didn’t connect with shoppers. So new retailers need to learn from this.
Decide On A Niche - Finding The Best Retail Ideas
Those starting a new business should take the opportunity to address and eliminate any potential weak spots within their business plan. This is going to be based on what we know no longer works within the concept of retail itself.
Owners of new retail stores need to ask themselves:
- Is there a genuine demand for my business?
- How many similar businesses exist in the area?
- Will people shop for what my store sells in person?
- How can my retail concept evolve to keep up with changing habits?
It’s also good to remember that not everything can be bought online, which is a major attraction of physical retail stores. There’s a tactile, engaging experience that happens when shopping in person. For retailers, the challenge is bringing these unique selling points to life through the offerings that they create.
Ultimately, it’s a question of enticing people off the street and into the store. Once they are in the shop, their expectations need to be met, if not exceeded. Both the product offerings and customer service are integral to meeting these objectives.
Choose The Most Appropriate Retail Space
Retail spaces vary dramatically according to the type, size, location and cost of the unit.
While cost will determine where a store is able to open, there are a number of factors to consider on the whole. Mainly the location in relation to passing footfall, specifically whether this aligns with the target customer of the business or not.
For example, coffee shops that are located in commuter zones or transit hubs typically do quite well. They fit the brief of lots of people wanting to grab a quick snack or beverage before heading to work. Every retail concept will differ, but that same sense of catering to obvious demand remains important.
Cost wise, the cheapest spots include market stalls, before moving into commercial buildings that don’t have a prominent location. These may be great for retail startups, but will present challenges in terms of growing the business.
As noted, incentives may be offered for choosing to set up shop in an unoccupied retail space on the high street, which is the middle option. On particularly derelict high streets, there could be some great deals to be had on empty units.
Buying or renting a shop in a busy shopping centre, especially large shopping centres such as Meadowhall or Bluewater typically is the most expensive option. This is down to the size of the unit and the amount of footfall such locations boast.
Business Financing - How Much Does It Cost To Open A Shop UK?
The average cost for starting a new business in the UK is around £12,601. Although for a retail business, this doesn’t factor in the cost of stock, which will likely add several thousands to the total figure.
Some of the main costs associated with opening a shop include:
- Business rates
- Cost of commercial mortgage or rent
- Interior/exterior renovations
- Stock and inventory
Business insurance is also required for every retail business. Some of the insurance types that may apply include employers’ liability insurance, public liability insurance, buildings insurance and contents insurance.
Taking care of the financial and administrative aspects isn’t always a thrilling task. But, it is essential to ensure the business is not only viable, but can weather any challenges.
Get The Business Online
There’s a certain irony about having to create a website for a physical retail business when arguably online shopping is one of the biggest reasons for the decline of the high street.
However, in today’s world, the two must happily co-exist, as websites are one of the best marketing tools a retail store has. Some retail stores may also choose to stock their products online to support the physical business also.
With any website or social media account, local SEO is the name of the game. Customers must be able to easily find the address of the store, along with information about what it sells and when it’s open.
Over time, an online presence can also be used to send out marketing campaigns. For instance, some retail clothing stores do live streams to demonstrate new lines. A craft store may do a ‘how to’ presentation and so on.
With digital means, it’s about engaging customers who may not have visited the store before to capture their imagination and add some personality to the brand.
Creating A Spectacular Opening Day
Once all the paperwork is in order and the store is ready to open, it’s important to spread the word as much as possible about the opening day.
As well as creating a stellar marketing campaign online and offline, businesses should engage in PR tactics including informing the local press. Stories about new retail units setting up shop are well usually received, and often don’t require a paid feature. Some press outlets may even agree to publish a tour of the store on their channels, which can be extremely valuable to the business. If the shop has any interesting story or niche offerings, this is even better to capture the attention of the press.
Remember though, that the opening day is still about the customers and not just the press. Arguably, the opening day will be make or break for how the store performs, particularly in those early days. So, business owners need to put in plenty of thought about how the day should run, and what will create the biggest impact on shoppers.
How To Open A Shop: A Top Checklist
- Do market research to create a strong concept
- Establish the positioning of the brand and the target customer
- Create a plan of how to finance the business
- Register the business with the government and the local council
- Trademark the business name
- Obtain any necessary licences or permits
- Secure a business premises
- Refurbish the premises
- Order stock
- Take out business insurance
- Hire staff
- Market the business
- Open the store
- Arrange ongoing bookkeeping and accountancy
- Monitor the business performance
Starting A Retail Business: In Summary
For any retail business to thrive, the basic principle of selling something people want to buy remains as true as ever. Although the retail industry is not without its challenges, it’s completely possible to open a new store and succeed, especially if it offers something new, exciting or better still - something that’s in high demand.
As with any business, the key is to understand both the product and the audience, ensuring both are aligned within the final offering. Alongside researching all of the legalities, including getting business insurance, a retail business also needs to be well run behind the scenes to truly reach its potential. This includes tapping into emerging trends and adapting the business model where needed so that it remains in front rather than behind.