7 keys to building a successful retail business in 2024
Kelli Trapnell
·December 4, 2023
Follow these seven smart tactics to scale your ecommerce retail business and achieve profitable growth, cheaply.
Ready to build your retail enterprise in 2024? Whether you’re launching a new retail business from scratch or looking for ways to scale an existing retail store, it’s important to think strategically about your business model and how you can adapt it in line with your customers’ needs.
Successful entrepreneurs don’t just rest on what’s worked in the past — they’re forward-thinking enough to analyze how their industry is changing, and can quickly adapt their strategy to meet what the market demands. They take advantage of best-in-class technology solutions to help them optimize business efficiencies, so that they can focus on delivering a great customer experience that helps them build loyalty and grow their customer base.
If you’re making plans to grow your retail business in 2024, here are some of the key elements to focus on:
- Combine in-store sales with a strong ecommerce presence
While some retail businesses operate solely via physical stores, and others focus exclusively on ecommerce, pairing the two models is a great way to expand your customer base and empower customers to shop the way they like best. By selling your products at brick-and-mortar stores, customers will get the opportunity to see or try on your products in person before making a purchasing decision — and by building a strong ecommerce sales platform, you’ll be able to expand your reach to customers who don’t have a retail store in their region. Customers can make use of multiple point of sale options, such as “buy online, pick up in store (BOPIS)”, as well as purchasing exclusively in-store or waiting for items purchased online to ship to their home. - Build personalized marketing strategies to engage with your customers
Most successful retailers leverage a variety of marketing channels to engage with their customer base — choosing the right channel and messaging for each customer segment to optimize for engagement. By using a CRM that tracks each customer’s brand interactions and demographic information, you’ll be able to create personalized marketing campaigns that appeal to their unique interests across the channels they’re most likely to use, including email, SMS, in-app messaging, and direct mail. Rather than focus on generic marketing campaigns, create customized offers and recommendations that will help you deepen your customer relationships and build customer loyalty. - Optimize your inventory management
Whether your brand focuses on ecommerce, physical stores, or both, it’s important to use technology solutions to track your supply chain and make sure that your inventory management is in line with customer demands. If you operate your own retail stores, much of your merchandise may be stored there, but you may need additional warehouse space — and if you operate solely online, you’re likely to benefit from a chain of distributed warehouse spaces. In either case, partnering with a 3PL can often be a great solution to help you manage fulfillment and logistics, with the ability to store inventory across a range of warehouses in areas you serve, for quick and efficient delivery to your entire customer base. - Build a loyalty program to increase customer retention
It’s far less expensive to generate more business from your existing customer base than it is to acquire a new customer — so make sure that you have a marketing strategy in place to drive customer loyalty among existing customers, and ensure that they have a great customer experience every time. By building a loyalty program that rewards loyal customers for shopping with your brand on an ongoing basis, you’ll be able to incentivize your shoppers to stick around. Most successful retailers’ loyalty programs are tied to their customers’ phone numbers, so the shopper can link both their in-store and ecommerce purchases to their loyalty program account easily. Your loyalty program might include perks for reaching certain milestones, as well as benefits such as a free item or special discount on the customer’s birthday. McKinsey research shows that loyalty programs can boost incremental revenue among program members by 15 to 25 percent annually, so it’s well worth investing in your program. - Make your supply chain more sustainable
Today’s customers are turning away from fast fashion in favor of brands that can spotlight their values: 66 percent of all respondents, and 75 percent of Millennials, say that they consider a brand’s sustainability when it comes to making a purchase. Your retail business can showcase your commitment to sustainability in the raw materials and methods you use, such as using recycled material in your products and packaging, utilizing solar or wind power, and using eco-friendly shipping methods like freight or sea. Your reverse logistics process is also another avenue to promote sustainability: Rather than adding to the 9.5 billion pounds of returns that end up in landfills each year, consider repurposing, recycling, or donating your returned products to ensure they see a second life. - Consider adding a wholesale business
One of the fastest ways to expand your customer base is to market your products to wholesale buyers, who will purchase products in bulk in exchange for a substantial discount. When it comes to retail v. wholesale, wholesaling your products provides a more streamlined operational model because you can sell far more products in a single transaction, reducing your reliance on customer support and consolidating your fulfillment and shipping requirements. Wholesale buyers might also commit to a minimum purchase order over a set period of time, helping you ensure predictable income that’s not tied to seasonal promotions. - Automate your returns with a returns management solution
As you see more retail success, you’ll also see a proportional increase in customer returns: As many as 30 percent of ecommerce transactions may end in a return, depending on the industry. Many retail businesses rely on a manual returns process, in which their customer support agents are tasked with initiating and managing returns. This manual process results in a poor customer experience, and takes CS time away from more important work. Instead, use a returns management solution to automate your returns process, enabling customers to use a self-service platform to initiate their returns in line with your return policy, with the option to exchange the product for any other item in your retail store. By incentivizing exchanges over refunds, you’ll be able to grow your base of loyal customers and retain revenue from returns that would otherwise be lost.
Need help growing your retail business? Let Loop handle your returns. Book a demo today.
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