What is the most essential element required to run a successful retail business?
Location, Location, Location
After watching numerous businesses come and go in my town, it is very clear that this was the one thing they didn't understand. All the other components are very important but it starts with having a location that will be convenient for the consumer and not a good deal for the operator.
It really helps to be close to other retailers that are a constant draw for traffic such as a liquor or beer store, grocery store or drug store. It used to be that a bank was in this category but with the advent of online banking, this is not as important as it once was. Line ups at my bank are a thing of the past. Parking and public transit are important as well. If you can't get close to the store, most people are not going to walk long distances to get there.And make the parking spots big enough for those people who don't know how to park an SUV. There really should be better driver testing for larger vehicles. I grow tired of the scrapes on the car from the park-by-feel drivers in retail parking lots.
Excellent Customer Service
Location is all fine and dandy but the experience that the customer has while shopping at a retail location is even more important in my eyes. Excellent customer service is what will ultimately get people coming back again and again. You still have to be competitive and offer quality products at a reasonable price but if you and your employees make the customer's experience memorable and rewarding, they will come back again.
Remember this phrase about customer service that the picture above is saying. If you have a good experience you will tell two or three friends. My car repair guy adds that if you have a bad experience, you will tell six or seven. It is worth mentioning here that he emigrated from Venezuela to Canada and didn't lose what he learned growing up in his birth country. I always enjoyed my experiences in his business and I honestly think he also enjoyed it more when I showed up. He knew that the experience was going to be enjoyable and the profit he gets was well earned. It goes both ways so treat your "supplier" the way you would like to be treated.
What is lost in many retail operations is that sense of dealing with family and that this operation is about hospitality and not just service. The number of "customer positive experiences gained" will have a lot more to do about customer retention than good deals, bargains or special offers combined. "You all come back" will always work better than "We value your business". The first is warm and genuine; the second, is more like "we like the smell of your money".
The big box stores will still draw because they are usually situated near other high traffic stores, but to make a go of it they are going to have to improve. Many people are growing tired of the bad experience in these stores. The state of the economy forces us to look at them for lower pricing but it still is very frustrating to go to these stores.
Quality Employees Pay for Themselves
All things being equal, I shop at the store that gives me the best experience. I shop very infrequently at stores that have left me with a bad taste or experience. If you are a retailer, pay your quality staff quality wages because they are important for your return business. A happy staff member is more likely to make a customer happy instead of doing everything possible to avoid them. Think of it this way, if you are getting grief from your management, why would you want more grief from the customer? If your managers treat you with respect, you are more likely to treat the customer that way.
Win-win in my books.