The Top 5 Myths of Retailing
by Carrie Hinkel on January 16th, 2008
Myths are funny things; most times their origin is unknown and they aren’t substantiated by fact, yet people are more than willing to believe them and pass on the information to others. Poor Seattle has missed out on millions of visitors because of the “it always rains in Seattle” myth. In fact, it gets an average annual rainfall of 36.2 inches while even Atlanta gets more at 49 inches per year. Yet, people still believe that Seattle is the rainiest city in America.
The same thing goes for the retail industry. There are plenty of myths that have undoubtedly kept thousands of potential store owners from opening a retail store, or have pushed thousands more stores to close because of poor sales. If you’re planning on opening your own retail store, it’s important to know the truth behind these myths – knowing the difference between fact and fiction might just keep your new business from an early closing.
Myth # 1: Location, Location, Location – Some people think that a retail store has to literally be at the corner of Main and Main Streets to be successful. That’s simply just not the case. Assuming that location is of the utmost importance means that customers are shopping your store by default, only because it’s convenient and close. True, that may be the case for gas stations, grocery stores and convenience stores; but if your retail store offers something unique, then customers are happy to travel the extra distance. Just think of your own shopping decisions – do you only limit your shopping to include a three-mile radius of your home or work? No one’s saying that having your store in the middle of nowhere is the same as having it in the center of town, but having your store off of Main Street certainly isn’t a recipe for retail disaster.
Myth #2: Online Shopping Will Replace Retail Stores – This is a very popular myth these days. While more and more consumers are shopping online, they aren’t solely shopping online. Online shopping can’t replace the experience of trying on clothes, perusing through the sale rack, holding a product in your hands, etc. Consumers’ desires to see, feel and hold certain products in their hands before buying just won’t go away. At this point in time, it was predicted that the mail order catalog industry wouldn’t exist anymore, and that’s obviously not true. And why? Because people still enjoy sitting down and looking through the pages of catalogs. Sure, it’s not quick, fast or efficient, but just like retail shopping, people enjoy the experience!
Myth #3: Small Retail Stores Can’t Compete With the Big Chain Stores – Unless you are talking about opening a hardware store right next to The Home Depot, this just isn’t true. While it may be the case that small retail stores have a hard time matching the low prices of the big box stores, there are certainly other playing fields to compete on. What about the uniqueness of your products, top-notch customer service and a warm and friendly atmosphere?
Myth #4: The Bigger, The Better – This theory says that the larger the advertising campaign, the bigger the inventory, the higher the sales and profits. While in some cases that might work out to be true, it’s certainly not a fact for all (or even most) retailers. It’s more important to be better than bigger. And, as long as your customers are loyal and your sales are steady, then growth is a natural, good thing. It’s more important that your business is strengthened by its success first, rather than trying to force success with bigger this and more of that.
Myth #5: If You Relocate, You Will Lose Customers – The truth is, moving to a new location can sometimes be the best thing for a retail business. Maybe it gives more space to a crowded store or a better location to a store on the outskirts of town. Give your current customers an incentive to visit you at the new store – like a discount coupon – and be sure to advertise your move well in advance with postings in your store and flyers included with every shopping bag.
There are plenty of other retailing myths out there so be aware and double-check everything you hear. It might just save your retail store from going in the wrong direction!