Today, Catherine Erdly from Future Retail Consulting is here to tell us when is a good time to start a retail business. Her answer? Right now!
With all the talk in the news about major retailers struggling, or even failing, you might be forgiven for thinking that everyone apart from Amazon should steer clear of the retail industry.
However, the headlines only reveal part of the story. One of the other reasons that these big retailers have begun to look shaky is because of the huge number of new brands entering into the retail market.
For every baby-gro that you buy from a local business, you are not buying it from Mothercare, and for every notebook you pick up from the gorgeous brand you follow on Instagram, that’s one you are not buying from WH Smith.
The Rose Report which aims to remove barriers for female entrepreneurs, recently outlined the growing trend worldwide towards entrepreneurship. There are already one million female led businesses in the UK – and many of them are retail businesses.
Clearly there is still a huge opportunity within the retail industry for independent brands to make their mark.
The retail industry is changing
Let’s be clear, retail is not dead, but BORING retail is!
In the 80s and 90s, and even in the 00s, people were interested in fitting in or “keeping up with the Jones”.
Big retailers expanded – certain that the way to keep growing was to take on more and more store space. Because they were servicing a customer base that was interested in fitting in, they were able to manufacture in bulk, and prices in China were so low that they could build in huge profit margins to cover their costs.
This gave rise to large chains with identical stores, full of unadventurous products designed to appeal to as many people as possible.
As consumer behaviour has changed, especially with the growth of online shopping, then these retailers have been slow to catch up.
So when many of them were faced with a customer who no longer wanted something boring and mediocre (BHS anyone?), then they could no longer keep going.
People no longer want “stuff”
Fast forward to 2019, and now not only do people want to stand out instead of fit in, most people are dealing with having far too much stuff in their lives, rather than needing to buy more.
The rise in popularity of Marie Kondo illustrates just how many of us really resonate with wanting to limit the amount of stuff that we have in our homes.
We want fewer items, but for them to mean more, suit us better and reflect more of our personality.
Personalisation has been a huge trend over the past few years – just take a look at NotOnTheHighStreet.com for example, and most big retailers have been trying to incorporate personalisation into their offering in some way. All because the customer wants something unique and tailored to them.
They want to connect with other people who share their values
More than that, today’s consumer, especially the younger generation, really want to connect with companies that share their values.
They are far less interested in faceless corporations and much more interested in seeing the founder on their Insta stories giving a tour of their workspace.
They want to buy, and support, businesses that share their beliefs and their world views.
The story of their brand has become one of the most valuable assets for retail businesses to use in marketing in 2019 – but what is Debenhams story? Or Next’s for example?
Conscious consumerism is here to stay
2018 marked a tipping point for public awareness of the environmental impact of modern manufacturing.
The “Blue Planet 2 effect” where awareness of ocean plastics has become a mainstream topic, and the Stacey Dooley documentary that outlined the environmental impact of the fashion industry are two examples of how conscious consumerism has become a much bigger economic force in the last year or two.
Searches for sustainable fashion grew by 66% last year as more people started considering the environmental impact of their purchasing.
It doesn’t look as if this movement is going away, especially given that Generation Z tend to be very aware of environmental issues and are even more likely than other age groups to base their purchasing decisions on how products are manufactured.
Independent businesses can build a community
So what does all of this mean for independent retailers? Well, independent retailers are perfectly placed to capitalise on these consumer trends.
Many of them have sustainability built into them from the beginning and are able to be transparent and open with their customers about their supply chains.
They can relate directly to their customers as real human beings, not faceless corporations, mainly because it may well be the owner who actually IS talking to the customers, not a marketing department!
They can build relationships with their customers – and take personalisation way further than putting someone’s initials on a product – getting customers feedback about creating new products, understanding what they like and don’t like, and telling them about new products that they know the customers will love.
Above all, independent retailers can relate to their customers by sharing their story and their values, and ultimately build a community around them of people who share their world view.
The barriers to entry are lower than before
Ten years ago, if you wanted an ecommerce website, you would have spent £10k to get one built for you.
Now you can get up and running quickly and cheaply, and with social media, you can reach a large number of people.
There are also more opportunities for short term rentals and pop-ups, so if you want to try a physical space for your products, you no longer have to commit to a lengthy lease.
People are responding to the new breed of independents
Lucy & Yak, an ethical clothing brand, is a great example of how to succeed in retail in 2019.
They started in 2017 but have already amassed a following of dedicated fans who love their clothes, but above all, believe in their mission to use their brand as a force for good in rural India where their products are made.
They’ve been able to grow rapidly by being honest and open with their customers, and making them feel as if they are doing more than just buying clothes, they are joining a movement.
So if you have an idea, now’s the time
There’s never been a better time to start a creative retail business.
Get clear on your purpose, your story and who you want to serve. Then find or create the very best products that you can, that your ideal customer will love, and get out there and share them with the world.