Dear Niche Doctor,
I’ve been exploring opening a small retail business, but after a recent visit to one of our malls I am giving a second thought to the whole idea. The reason for my change of heart is that I was shocked to see so many “closed” and “going out of business” signs. In fact, I found out that several of my favorite stores were gone forever. My concern is that if the big guys can’t make it, how can I?
My immediate worry for you is that it sounds as if you have little or no experience in retail other than as a customer. Although experience is never an absolute guarantee of success, in retail even the greatest business plan cannot fully substitute for having been in the trenches. So, if the shoe fits here, check out getting a job(s) in a store similar to the one you want to open. On-the-job training will provide you lessons in what works and what minefields to avoid when you have your own business.
To your specific question about success in a time when big guys are having problems, the empty spaces at the mall you mention could have once been filled by Ann Taylor, Gap, Banana Republic, Barnes & Noble, or American Apparel – just to name just a few stores that have since slipped into oblivion. The march goes on with larger spaces emptying out as well (Macy’s, JC Penny’s, The Sports Authority, and Sears). The good news for you is that just like on-the-job training, there is much we can learn from the actions and fate of others.
Some of those lessons include:
Successful businesses stay ahead of their niche. Complacency is the kiss of death. No matter how successful you are today, tomorrow can be totally different if you don’t stay ahead of the curve. In other words, no sleep for your niche.
Customers are fickle. I hate to say it but it’s true, especially in retail. What this means for you and any successful business is that not a day goes by that you don’t have to give your customers reasons to do business with you. Take customers for granted – even once – and they will walk away.
Change happens at the speed of light it seems, resulting in easily bored customers. There is a big difference between merchandise with a classic feel and that which is just plain dated.
Every business has a lifecycle and few are meant to live forever. The issue is predicting the company’s demise before it happens. Put another way: What is the lifecycle of your niche?
Unlike a few years ago when internet sales were an extra bonus for retail stores, they are increasingly the main event. Today, your storefront may well be the tail with the dog being your internet presence.
Probably the biggest lesson we can learn from all the empty spaces in malls and from failed big box stores is a very simple one – and best of all, it’s one ready-made for you as a small business person: Bigger is not always better. In your case, a business capitalizing on a niche that is narrow and deep while conveying its genuine uniqueness should prove a welcome and fresh relief to customers tired of cookie cutter retail.
Dr. Lynda Falkenstein is a business consultant and author of NICHECRAFT: Using Your Specialness to Focus Your Business, Corner Your Market, and Make Customers Seek You Out. To contact her with questions or to request a free copy of her latest book, Graduate & Go!, email DrNiche@vbjusa.com or call 503.781,0966. Please note that the Vancouver Business Journal and Dr. Niche reserve the right to publish your letter or an edited version in all print and electronic media.