Josh Burris is the former CEO of GNC and Rue21, he is the current CEO of STNDRD, which is a growth marketing company that helps companies of all sizes scale their businesses to the next level.
How to Turn Around a Falling Retail Business to Make it Profitable
Many businesses have been in your shoes and managed to turn things around. Here's a no-nonsense guide to help you get back on track and start seeing profits again.
First things first, you need to figure out why your business is struggling. Is it a drop in foot traffic, or conversion? Are you selling products nobody wants anymore or priced out of your competitive market? Maybe your operating costs are out of line for the current size of your organization, or your marketing is about as effective as a chocolate teapot. Take a good look at your sales data, operating KPI’s, customer feedback, and financial reports. This will help you see what's going wrong quickly.
Your customers are the heartbeat and the reason you are in business. We work for them, they are our purpose and we depend on them. If you’ve lost touch with them, it’s time to reconnect. Conduct surveys, engage with them on social media, or just have face-to-face chats in-store...my favorite source or truth. Find out what they love, what they loathe, and what they’re longing for. This feedback is like gold dust and can guide you in making better decisions.
Sometimes, what you’re selling isn’t what you think people want or what they bought a season ago that worked. Based on your customer feedback, think about updating your product offerings. You don’t have to reinvent the wheel here. Start small by introducing a few new items and phasing out the ones that aren’t selling or turning on plan. Keep an eye on what’s trending and be ready to pivot. Lowest performing skus are out, and be decisive…invest in future potential and productivity.
Excellent customer service can be your secret weapon. Train your staff to be friendly, helpful, and knowledgeable. Make sure they understand that great service keeps customers coming back. Consider offering loyalty programs or special promotions to reward repeat customers so they see value. Remember, happy customers are organic free advertising – they tell their friends and family at the dinner table!
Take a look at your operating costs and see where you can cut back without sacrificing quality. Are you paying too much for rent? Can you negotiate better terms with your suppliers? Streamlining your operations can free up cash to invest in other areas of your business. Maybe it's time to switch from those gold-plated paperclips to something off the shelf.
In today’s digital age, having an online presence is crucial. If you don’t already have a website, get one – it’s like having a storefront that’s open 24/7. Make sure it’s user-friendly and mobile-optimized. Use social media to promote your business and engage with customers. Consider using e-commerce platforms to sell your products online. This can open up new revenue streams and reach customers who prefer shopping from their couches and maybe in their pajamas.
You need to get the word out about your business. Use a mix of online and offline marketing strategies. Social media ads, email marketing, and local events can help draw attention. Make your promotions exciting and time-sensitive to create a sense of urgency. Who doesn’t love a good flash sale and make sure it is localized?
Turning around a business isn’t a one-time effort. You need to continually monitor your progress and be ready to adjust your strategies. Keep an eye on your sales, customer feedback, and market trends. What works today may not work tomorrow, so stay flexible and proactive – constant vigilance and obsessiveness is key!
Sometimes, it may be best to bring in an expert in. Especially if you’re lacking experience on your team. Consultants can offer fresh perspectives and solutions you might not have considered. They can help you with everything from financial restructuring to marketing strategies, and web optimization based on what is working in your industry. While it’s an added cost, the investment can pay off in the long run and prevent you from learning the hard way. Plus, it’s nice to have someone else share the load – and the stress!
Lastly, don’t get discouraged. Turning around a business takes time and effort. Stay positive, be persistent, and celebrate every small victory along the way. Your determination can inspire your team and keep everyone motivated. Think of yourself as the captain of a ship, steering through stormy seas – your team is relying on you to navigate, be in control, and laser-focused on how to win with them.
In conclusion, turning around a falling retail business is challenging but definitely doable. By understanding your situation, connecting with your customers, optimizing operations, embracing technology, and staying adaptable, you can steer your business back to profitability. Remember, every big success starts with small, focused, and consistent steps in the right direction. Good luck, and may your cash registers ring!