Is Buying a Retail Business Still a Good Idea?
With a growing number of the UK’s high-profile retailers forced to call it a day, there’s no shortage of business analysts stepping up to explain the shortcomings of the brands involved.
Given the challenges 21st-century bricks-and-mortar outlets now face, it’s clear such businesses are no place for the faint hearted or for those expecting little more than a gentle armchair ride.
So where did they actually go wrong? And what does the future hold for the standard high-street shop front?
Why do we need retail shops?
Now that e-commerce is a firmly established feature of our UK shopping landscape, it seems logical to ask whether a high-street presence is still necessary.
The UK’s large department stores were originally developed to meet the needs of a 20th-century consumer society.
These retail emporiums were originally a convenient one-stop shop where house-proud wives could shop for their husbands and families, whilst doing lunch with their friends and treating themselves all at the same time.
However, product ranges gradually expanded and diversified, eventually forcing these retailers to limit the scope of goods they could practically display and supply. As retailing became ever more sophisticated, the proliferation of outlets and options meant consumers were literally spoilt for choice.
Rather than viewing the matter as an essential domestic chore, contemporary shoppers now expect a worthwhile trip to the shops for the full, retail experience.
Where did they go wrong?
For so long the archetypal department store, House of Fraser became complacent and gradually lost its relevance for emerging sectors such as millennials and Gen-Z as the consumer market changed.
As a result, it had no unique appeal and continued stocking the wrong type of products whilst also failing to offer shoppers any kind of meaningful retail experience.
Faced with today’s high street bristling with competition, no retailer can afford to be seen as out-dated.
So, whilst Hamley's toy shops continue to offer customers a unique and memorable shopping experience, Toys R Us expected consumers to carry on making that 20 minute drive to view the same old collection of yesterday’s favourites.
Rival e-commerce stores now continue to provide relevant choices, cheaper prices and a fast delivery service.
The challenge for established high street retail businesses has become very clear: Can you give your prospective customers a good reason to log out, open their own front doors and head down to the high street?
What are the prospects for buying a retail business?
Buying a retail shop can still be an extremely viable option, but it must be supported by an intelligent retail strategy.
Your USP needs to be precisely that – a unique proposition which is contemporary and progressive.
Essentially, that means either your store must be a convincing and compelling experience for the customer, or your website should be a logical and complementary extension of your shop.
For example, offering a selection of online-only products is an effective way to create a new audience for your brand and provide an alluring taster for what else you have to offer.
And because so many consumers now discover many of their favourite brands online, this will inevitably generate ongoing interest and discussion focused on your products.
This then provides a good reason for customers to visit your shop-front to see what other goodies you have in stock.
And to ensure that customers return, that may mean entirely rethinking how a physical store should function.
Rather than expecting volume sales, it may be far better to offer new layouts which showcase your products and give consumers interactive product experiences, perhaps even using your physical space to incorporate partner products and complementary experiences which have the potential to build extended product communities.
Once inside, the consumer should feel that the experience offers something different that can’t be captured online.
By Paulyne Antoniou, Digital Content Manager. Paulyne has produced regular videos and editorial for many years with small businesses, franchises and industry professionals for all titles in the Dynamis Stable including BusinessesForSale.com, PropertySales.com and FranchiseSales.com.