retail management business plan

Retail Business Plan Template

Written by Dave Lavinsky

Retail Business Plan

You’ve come to the right place to create your retail business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their retail companies.

Retail Business Plan Template & Sample

Below is a retail business plan template to help you create each section of your retail store business plan.

Executive Summary

Business overview.

Artisan Home & Decor is a startup retail shop located in Pasadena, California. The company is founded by Joyce Hernandez, a retailer who has worked as a store manager of a local home decor store for nearly a decade. Joyce has recently graduated from California University with a Bachelor’s degree in Business Management. Now that she has gained real-world experience managing a store and the education on how to run a retail business, she is inspired to start her own company, Artisan Home & Decor. Joyce is confident that her ability to effectively manage employees, customer relationships, and retail operations will help her establish a profitable retail store. Joyce plans on recruiting a team of highly qualified sales associates, accountants, and buyers to help manage the day to day complexities of retail – marketing, sales, budgeting, sourcing, and purchasing.

Artisan Home & Decor will provide uniquely curated home decor products created by local artisans. The home decor shop will be the ultimate choice for customers in Pasadena who value one-of-a-kind pieces for their homes. Artisan Home & Decor will provide its customers with a refreshingly personalized shopping experience they can’t get anywhere else. The shop’s sales associates will be able to help customers find the perfect pieces to suit their individual preferences and styles.

Product Offering

The following are the products that Artisan Home & Decor will provide:

• Lamps & Lighting
• Throw Blankets
• Photo Frames
• Cookware Sets
• Kitchen Gadgets
• Kitchen and Bathroom Fixtures
• Waste Baskets
• Soap Dispensers

Customer Focus

Artisan Home & Decor will target home decor shoppers looking for a personalized experience and unique pieces in Pasadena. The company will target boomer, millennial, and gen z  consumers looking for unique decor for their homes, apartments, or condos. They will also target businesses looking for special pieces to furnish their corporate offices, waiting rooms, and lobbies. No matter the client, Artisan Home & Decor will deliver the best communication, service, and high quality products.

Management Team

Artisan Home & Decor will be owned and operated by Joyce Hernandez, a retailer who has worked as a store manager of a local home decor store for nearly a decade. Joyce has recently graduated from California University with a Bachelor’s degree in Business Management. Now that she has gained real-world experience managing retail stores and the education on how to run a retail business, she is inspired to start her own company, Artisan Home & Decor.

Joyce Hernandez has recruited her former assistant manager, Melissa Jacobs to come on board to help her manage Artisan Home & Decor. While Joyce will oversee the employees, day-to-day operations, and client relationships, Melissa will be the Inventory Manager. She will be in charge of sourcing, purchasing, and pricing all inventory. Melissa will work directly with suppliers to stock the retail shop with unique artisan pieces.

Melissa is a graduate of the University of California with a Bachelor’s degree in Interior Design. She has been working at a local retail home decor company for over a decade as an assistant manager. Melissa has an eye for design and keen organizational skills that will allow her to effectively manage Artisan Home & Decor’s one-of-a-kind inventory. Her communication skills will enable her to establish and maintain working relationships with artisans and suppliers.

Success Factors

Artisan Home & Decor will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly qualified team of sales associates and interior design experts that are able to provide a personalized customer experience and help each client find the right home decor pieces to suit their preferences.
• Artisan Home & Decor will bring fresh inventory into their retail store on a regular basis so there will always be something new for customers to check out. In addition to in-store sales, the company will sell pieces online through its website.
• Artisan Home & Decor offers one-of-kind pieces created by local artisans to suit a wide variety of home decor styles and tastes. By purchasing from the shop, customers are supporting these local artisans and getting fresh decor that no one else will have.

Financial Highlights

Artisan Home & Decor is seeking $210,000 in debt financing to launch its retail business. The funding will be dedicated towards securing and building out the retail space and purchasing the initial inventory. Funds will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs for print ads, website and SEO marketing initiatives, and association memberships. The breakout of the funding is below:

• Retail space build-out: $25,000
• Retail store shelving, displays, equipment, supplies, and materials: $40,000
• Three months of overhead expenses (payroll, rent, utilities): $120,000
• Marketing costs: $15,000
• Working capital: $10,000

The following graph below outlines the pro forma financial projections for Artisan Home & Decor.

Company Overview

Who is artisan home & decor.

Artisan Home & Decor is a newly established retail company in Pasadena, California. The new home decor shop will be the ultimate choice for people looking for uniquely curated one-of-a-kind furniture and other home products crafted by local artisans. Artisan Home & Decor will provide its customers with a refreshingly personalized shopping experience they can’t get anywhere else. The shop’s sales associates and experienced interior designers will be able to help customers find the right pieces to suit their preferences and styles.

Artisan Home & Decor will be able to provide a personalized shopping experience for serving customers in-store and online. The team of professionals and sales associates are highly qualified and experienced in interior design, home decor, and the customer experience. Artisan Home & Decor removes all headaches and issues of the home decor shopper and ensures all issues are taken care off expeditiously while delivering the best customer service.

Artisan Home & Decor History

Artisan Home & Decor is owned and operated by Joyce Hernandez, a retailer who has worked as a store manager of a local home decor store for nearly a decade. Joyce has recently graduated from California University with a Bachelor’s degree in Business Management. Now that she has gained real-world experience managing retail stores and the education on how to run a retail business, she is ready to start her own company. Joyce is confident that her ability to effectively manage employees, customer relationships, and retail operations will help her establish a profitable retail store. Joyce has begun recruiting a team of highly qualified sales associates, accountants, and buyers to help manage the day to day complexities of retail – marketing, sales, budgeting, sourcing, and purchasing.

Since incorporation, Artisan Home & Decor has achieved the following milestones:

• Registered Artisan Home & Decor, LLC to transact business in the state of California.
• Has a contract in place to lease the retail space.
• Reached out to numerous local artisans to advise them on the upcoming retail shop in order to start getting supplier contracts.
• Began recruiting a staff of sales associates, interior designers, an accountant/bookkeeper, marketing director, and assistant manager to work at Artisan Home & Decor.

Artisan Home & Decor Services

Industry analysis.

The retail industry in the United States is valued at over $4T currently and is forecasted to reach $4.9T by the end of 2022. This is up from $3.8T in 2019. After a decade of retail decline between 2010 and 2020, the market is rebounding at a surprising rate. There were twice as many store openings as closings in 2021 alone. The number of brick-and-mortar retail establishments is increasing even as ecommerce shopping has grown by 70% in the last three years.

The role of retail stores is evolving and industry operators are discovering in-store experiences are still vital from the customer perspective. Successful brick-and-mortar industry operators are incorporating ecommerce into their business models. Trends include providing ship-from-store and buy online, pickup in store options to give customers more flexibility in the way they can shop. Key success factors include the level of customer satisfaction, product selection, prices, and convenience.

Customer Analysis

Demographic profile of target market.

The precise demographics for Pasadena, California are:

Customer Segmentation

Artisan Home & Decor will primarily target the following customer profiles:

• Millennial customers looking for one-of-a-kind home decor
• Boomer customers looking for one-of-a-kind home decor
• Gen z customers looking for one-of-a-kind home decor
• Businesses looking for unique decor for their offices, waiting rooms, or lobbies

Competitive Analysis

Direct and indirect competitors.

Artisan Home & Decor will face competition from other retailers with similar business profiles. A description of each competitor company is below.

Pasadena Home Decor

Pasadena Home Decor provides high-end home decor for the conscientious consumer. Located in Pasadena, California, the home decor retailer is able to provide a tailored shopping experience for its customers. The store’s list of products includes tables, chairs, wall hangings, rugs, vases, photo frames, candles, office decor, and paintings by local artists. Pasadena Home Decor sells online and in-store to give customers flexibility.

Pasadena Home Decor’s promise is to deliver high quality pieces that will stand out. Customers who purchase furniture and home decor from Pasadena Home Decor will be delighted with the customer service, cleanliness of the store, and personalized design services the company offers.

Home Shoppe

Home Shoppe is a California-based home decor retail store that provides outstanding pieces for discerning clientele. Home Shoppe stocks unique furniture and other decor items that are 100% hand-crafted. The owners of Home Shoppe are experienced craftsmen themselves, so they know how quality furniture and home decor pieces should be made. Clients can depend on their selection of products for durability, style, and eco-friendly materials. Choose Home Shoppe for your next home decor project and let the sales team take the stress out of the redecorating process by helping you select the best products for your home.

Redecorating For You

Redecorating For You is a trusted Pasadena retail company that provides superior home decor products for shoppers in Pasadena and the surrounding areas. The shop offers an extensive inventory of home decor items in a variety of styles so there is something for every taste. Redecorating For You is able to provide premium pieces that fill every space with elegance and style. The shop also eases the stress of redecorating by providing in-store pickup and delivery options for busy customers.

Competitive Advantage

Artisan Home & Decor will be able to offer the following advantages over their competition:

• Artisan Home & Decor will bring fresh inventory into the store on a regular basis so there will always be something new for customers to check out. In addition to in-store sales, the company will sell pieces online through its website.
• Artisan Home & Decor offers one-of-kind pieces created by local artisans to suit a wide variety of home decor styles and tastes.

Marketing Plan

Brand & value proposition.

Artisan Home & Decor will offer the unique value proposition to its clientele:

• Artisan Home & Decor will make redecorating easy for customers by providing in-store shopping, pickup, delivery, online shopping, ship-from-store, and buy online-pickup in store options.
• By purchasing from the shop, customers are supporting local artisans and getting fresh decor that no one else will have.

Promotions Strategy

The promotions strategy for Artisan Home & Decor is as follows:

Social Media Marketing

The company will use various social media platforms such as TikTok, Instagram, Facebook, LinkedIn, YouTube, and Snapchat to promote the shop, feature artisans, and show off new pieces. The marketing director will oversee the social media marketing activities to grow the customer base.

Professional Associations and Networking

Artisan Home & Decor will become a member of professional associations such as the National Retail Federation, California Retailers Association, and the Home Furnishings Association. The company will focus its networking efforts on expanding its network of clients, designers, and artisans.

Print Advertising

Artisan Home & Decor will invest in professionally designed print ads to display in programs or flyers at industry networking events, in home decor publications, and direct mailers.

Website/SEO Marketing

Artisan Home & Decor’s marketing director will be responsible for creating and maintaining the company website. The website will be well organized, informative, and list all of the products currently available for purchase online.

The marketing director will also manage Artisan Home & Decor’s website presence with SEO marketing tactics so that any time someone types in the Google or Bing search engine “Pasadena home decor retailer” or “home decor store near me”, Artisan Home & Decor will be listed at the top of the search results.

The pricing of Artisan Home & Decor will be premium and on par with competitors so customers feel they receive value when purchasing the one-of-a-kind products.

Operations Plan

The following will be the operations plan for Artisan Home & Decor.

Operation Functions:

• Joyce Hernandez will be the Owner and Manager of the store. She will oversee all staff and manage day-to-day operations. Joyce has spent the past year recruiting the following staff:
• Melissa Jacobs – Inventory Manager who will be responsible for sourcing, purchasing, pricing, and maintaining the inventory.
• Robert Brown – Staff Accountant/bookkeeper who will provide all store accounting, tax payments, and monthly financial reporting.
• Bill Johnson – Marketing Director who will provide all marketing and sales activities for Artisan Home & Decor including maintaining the website, social media, print advertising, and promotions.
• Julia Smith – Lead Sales Associate & Designer who will manage all sales associates and provide design services for customers.

Milestones:

Artisan Home & Decor will have the following milestones complete in the next six months.

9/1/2022 – Finalize contract to lease the retail space.

9/15/2022 – Finalize personnel and staff employment contracts for the management team.

10/1/2022 – Finalize contracts for suppliers.

10/15/2022 – Begin networking at industry events and implement the marketing plan.

10/22/2022 – Begin moving into the Artisan Home & Decor shop.

11/1/2022 – Artisan Home & Decor opens for business.

Artisan Home & Decor will be owned and operated by Joyce Hernandez, a retailer who has worked as a store manager of a local home decor store for nearly a decade. Joyce has recently graduated from California University with a Bachelor’s degree in Business Management. Now that she has gained real-world experience managing a store and the education on how to run a retail business, she is inspired to start her own company, Artisan Home & Decor.

Melissa is a graduate of the University of California with a Bachelor’s degree in Interior Design. She has been working at a local retail home decor company for over a decade as an assistant manager. Melissa has an eye for design and keen organizational skills that will allow her to effectively manage Artisan Home & Decor’s one-of-a-kind inventory. Her communication skills will enable her to establish and maintain working relationships with suppliers.

Financial Plan

Key revenue & costs.

The revenue drivers for Artisan Home & Decor are the retail fees they will charge to the customers in exchange for their products. The shop will charge a healthy margin to make sure artisans are paid well for their products while ensuring a solid profit for the business.

The cost drivers will be the overhead costs required in order to staff a retail store. The expenses will be the payroll cost, rent, utilities, store supplies, and marketing materials.

Funding Requirements and Use of Funds

• Store shelving, displays, equipment, supplies, and materials: $40,000

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average number of items sold per month: 300
• Average sales per month: $90,000
• Retail space lease per year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, retail business plan template faqs, what is a retail business plan.

A retail business plan is a plan to start and/or grow your retail business. Among other things, it outlines your business concept, identifies your target market, presents your marketing plan and details your financial projections.

You can  easily complete your retail business plan using our Retail Business Plan Template here .

What are the Main Types of Retail Businesses?

There are a number of different kinds of retail businesses, some examples include: Specialty Store, Off-Priced/Used Goods Store, Department Store, Convenience Store, Drug Store/Pharmacy, Discount Store, Hypermarket, and E-commerce.

How Do You Get Funding for Your Retail Business Plan?

Retail businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

A solid retail business plan with comprehensive financial statements will help show investors your are well-prepared to start your own business.  A retail business plan template will help you quickly and easily get started.

What are the Steps To Start a Retail Business?

Starting a retail business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Retail Business Plan - The first step in starting a business is to create a detailed retail store business plan that outlines all aspects of the venture. This should include supporting market research, your potential market size and target customers, the services or products you will offer, marketing strategy, your competitive advantages and detailed financial projections.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your retail business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your retail business is in compliance with local laws.

3. Register Your Retail Business - Once you have chosen a legal structure, the next step is to register your retail business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your retail business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Retail Equipment & Supplies - In order to start your retail business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your retail business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Where Can I Get a Retail Business Plan PDF?

You can download our free retail business plan template PDF here . This is a sample retail business plan template you can use in PDF format.

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Retail Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their retail businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a retail business plan template step-by-step so you can create your plan today.

Download our Ultimate Retail Business Plan Template here >

What is a Retail Business Plan?

A business plan provides a snapshot of your retail business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Retail Store

Sources of Funding for Retail Businesses

With regards to funding, the main sources of funding for a retail business are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a retail business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. 

Venture capitalists will not fund a retail business. They might consider funding a chain, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could rarely achieve such results.

Finish Your Business Plan Today!

Retail business plan template example.

Your business plan should include 10 sections as follows:

Executive Summary

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of retail store you are operating and the status; for example, are you a startup, do you have a retail business that you would like to grow, or are you operating a chain of retail businesses.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the retail industry. Discuss the type of retail store you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of retail business you are operating.

For example, you might operate one of the following types:

• Speciality Store – a store with a tight focus (e.g., hip apparel for women)
• Off-Priced/Used Goods Store – sells massively discounted or used products
• Department Store – often located at a mall and offer tons of products (e.g., Macy’s)
• Supermarket – focuses primarily on food items
• Convenience Store – offers just the most popular items a supermarket offers in a much smaller location
• Drug Store/Pharmacy – primarily offer medicines and medical products
• Discount Store – offer large inventories at low prices (e.g., Walmart)
• Hypermarket – offer many food and non-food items often in large quantities at a discount (e.g., Costco)
• E-commerce – offers products for sale online (e.g., Amazon)

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the retail business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the retail industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards local retail businesses with online counterparts, it would be helpful to ensure your plan calls for a significant online presence.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your retail business plan:

• How big is the retail business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in your local market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your retail business. You can extrapolate such a figure by assessing the size of your niche’s market in the entire country and then applying that figure to your local population.

Customer Analysis

The following are examples of customer segments: college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of retail business you operate. Clearly baby boomers would want a different atmosphere, pricing and product options, and would respond to different marketing promotions than teens.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most retail businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other retail businesses. They are most likely local businesses who sell similar items to you.

Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. You most likely will have online competitors; companies that sell the same or similar items to you, but which operate online.

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. Look at review websites to gain this information.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior products or services?
• Will you provide products that your competitors don’t?
• Will you make it easier or faster for customers to acquire your products?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Product : in the product section you should reiterate the type of retail business that you documented in your Company Analysis. Then, detail the specific products you will be offering.

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the items you offer and their prices.

Place : Place refers to the location of your retail business. Document your location and mention how the location will impact your success. For example, is your retail business located next to a heavily populated office building, or gym, etc. Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate kiosks, detail the locations where the kiosks will be placed.

Promotions : the final part of your retail business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your storefront extra appealing to attract passing customers
• Social media marketing
• Search engine optimization
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites 
• Partnerships with local organizations
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your retail business such as serving customers, procuring inventory, keeping the store clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 5,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

Ideally you and/or your team members have direct experience in the retail business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in retail businesses and/or successfully running retail and small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your retail business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, you may need to purchase inventories now that you can’t sell (and get paid for) for several months. During those months, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a retail business:

• Location build-out including design fees, construction, etc.
• Cost of fixtures
• Cost of initial inventory
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Retail Business Plan Summary

Putting together a business plan for your retail business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert on retail business planning and know everything you need about writing a retail store business plan. You will really understand the retail business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful retail store.

Download Our Retail Business Plan PDF

You can download our retail business plan PDF here . This is a business plan template you can use in PDF format.  

Retail Business Plan FAQs

What is the easiest way to complete my retail business plan.

Growthink's Ultimate Retail Business Plan Template allows you to quickly and easily complete your Retail Business Plan.

Where Can I Download a Retail Business Plan PDF?

You can download our retail business plan PDF template here . This is a business plan template you can use in PDF format.

Don’t you wish there was a faster, easier way to finish your Retail business plan?

OR, Let Us Develop Your Plan For You

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How to create a retail store business plan

By Andrea Nazarian

A successful retail business starts with a well-thought-out retail business plan. While you may think you have your business ideas all figured out in your head, putting them down on paper in the form of a business plan is crucial for several reasons. 

In this post, we’ll explore what a retail business plan is, why it’s different from other business plans, what to include in it, common mistakes to avoid, and how to make your plan stand out.

What Is a Retail store business plan and why do you need one?

A retail store business plan is a comprehensive document that outlines your business model, identifies your target customers, and lays out a roadmap for turning your retail store or online shop into a profitable business. 

It’s a planning and forecasting tool that provides clarity and direction for your business. With a good business plan, you’re more likely to achieve success. 

Here’s why having a retail store business plan is essential:

Planning and forecasting

A retail store business plan helps you plan and set clear goals for your business’s short-term and long-term success.

Planning helps you set goals, allocate resources wisely, and stay on track. It ensures that day-to-day operations run smoothly. Forecasting, on the other hand, helps businesses anticipate future trends and challenges, allowing them to make informed decisions and adapt to changing circumstances. 

Together, planning and forecasting help you avoid costly mistakes, reduce labor costs , seize opportunities, and achieve both short-term and long-term objectives. In essence, they’re like a GPS for your retail business, guiding it towards profitability and sustainability.

Securing investment

A retail store business plan helps secure investment by demonstrating a clear and well-thought-out strategy. It shows potential investors that you’ve done your homework, understand your market, and have a solid plan for success. 

The plan outlines your business goals, target market, competitive analysis, and financial projections, instilling confidence in investors that their money will be used wisely. It also highlights your commitment and professionalism, making you a more attractive investment opportunity. 

Essentially, a strong retail business plan reassures investors that your venture is a sound investment with a higher likelihood of delivering returns on their capital.

Guiding business operations

A retail store business plan serves as a roadmap for guiding business operations. It outlines your business’s goals, strategies, and tactics, providing a clear direction for daily activities. 

It helps you make informed decisions about product offerings, retail staff scheduling , pricing, local business marketing , online marketing and staffing. The plan also includes financial projections and budgeting, ensuring you manage resources effectively. 

Regularly reviewing the plan allows you to track progress, identify areas needing improvement, and adjust strategies accordingly. Overall, it keeps the business focused, organized, and aligned with its objectives, making day-to-day operations more efficient and effective in achieving long-term success.

Get your team in sync with our easy-to-use, all-in-one employee app.

How is a retail business plan different from other business plans?

Retail businesses are unique in many ways, and your business plan should reflect that. Unlike other businesses, retail operations involve factors such as inventory management , supply chains, order fulfillment, deliveries, and customer returns. 

Here’s how a retail store business plan differs:

Inventory management

Unlike other business plans, retail plans must handle challenges like seasonal sales variations and predicting what customers will buy. Inventory management in retail business plans is about keeping the right amount of products in stock to meet customer demand while avoiding excess or shortages. 

They also need to explain how they get products, where they store them, and how they restock when items run low. In contrast, many other businesses don’t deal with these inventory issues.

Retail store business plans focus more on handling and controlling inventory to make sure they always have what customers want and don’t waste money on too much stock.

Marketing strategy

Marketing strategy in retail store business plans, compared to other business plans, often emphasizes attracting customers to physical or online stores, creating appealing displays, and running promotions like sales or loyalty programs. 

Retail plans typically prioritize reaching a broad consumer base and enticing them with visually appealing products. In contrast, other business plans might focus on more specialized marketing, like B2B partnerships or online advertising. 

Retailers also consider factors like store location and layout, which are less significant for many other businesses. So, simply put, retail business plans concentrate on tactics to draw in shoppers and make their shopping experience enjoyable and memorable.

Growth strategy

Growth strategy in retail store business plans, unlike other business plans, often centers on expanding to new locations, introducing new product lines, or attracting more customers. Retailers aim to increase sales by opening additional stores, going online, or diversifying their offerings. 

In contrast, some businesses may focus on improving internal processes or targeting specific niche markets. 

Retailers typically rely on broadening their reach to fuel growth, making strategies like franchising, adding new store branches, or exploring e-commerce crucial components of their plans. So, in simpler terms, retail business plans tend to emphasize expanding the business footprint and customer base as a primary path to success.

What to do before you start writing your retail store business plan

Research your market.

T horough market research is essential. Investors look for evidence of a healthy market and an unmet need that your business can address.

You’ll want to gather data on who your customers are, what they want, and where they’re located. Analyze your competition to see what makes your business unique. This research helps investors see that there’s a demand for your products or services and that your business can thrive in the market. 

It’s about proving that your idea is well-informed and has the potential to succeed. So, in simple terms, thorough market research shows investors that your business plan is based on a strong foundation of knowledge and understanding.

Understand your competitors

 Know your competition inside out. Understanding what sets you apart is crucial.

You need to know who you’re up against and what makes them tick. Research your competitors thoroughly: their strengths, weaknesses, and strategies. Identify what sets your business apart – your unique selling points. 

Investors want to see that you’ve done your homework and can explain how your retail store will outshine the competition. Maybe it’s better prices, superior quality, or outstanding customer service. 

This knowledge not only helps you stand out but also shows investors that you’re ready to face the competition head-on, which can boost their confidence in your business’s potential success.

Have a growth strategy

Define a clear growth strategy to demonstrate how your business will expand once it’s up and running. It shows investors that you’re not just focused on starting your business but also on making it grow in the long run. 

You can outline different growth strategies like market penetration (selling more to existing customers), product development (creating new products for existing customers), market development (selling existing products to new markets), or diversification (introducing new products to new markets). 

This helps investors understand your vision and how you plan to increase your business’s value over time, making your retail venture a more attractive investment opportunity.

What to Include in your retail store business plan

Business overview.

Provide a high-level description of your retail business, including your company’s structure, location, and the products or services you’ll offer.

Business goals

Explain your business goals, whether they’re related to market share, product ranges, or online expansion.

It should give a clear, simple picture of your retail business. Explain whether your business will operate in a physical store, online, or both. 

Mention the legal name of your company, where it’s located, and briefly describe the products or services you plan to sell. Keep it straightforward and easy to understand, so anyone reading your plan can quickly grasp what your retail business is all about. 

This section sets the stage for the rest of your plan, helping readers get a sense of your business from the get-go.

Your industry experience

In the “Your industry experience” section of your retail store business plan, it’s your time to shine. Tell the readers about your background and expertise, especially if you’ve held important positions in recognized retail businesses. 

If you’ve previously led successful growth initiatives or managed to open new stores that flourished, this is the place to mention it. Basically, this section is all about showcasing your qualifications and experience in the retail world.

It helps build trust and confidence that you’re the right person to turn your retail business idea into a thriving reality. Keep it concise but impressive.

The “ Marketing strategy ” section of your retail store business plan is where you paint a picture of how you’ll present your store to the world. Explain your store’s image, the strategy for your brand, and how you plan to market your products or services. 

Don’t forget to dive into the 4Ps of retail marketing:

• Product : Describe what you’re selling and what makes it special.
• Pricing : Explain how you’ll price your products and why.
• Place : Tell where you’ll sell your products, be it online, in-store, or both.
• Promotion : Detail your strategies for promoting your store and products.

This section gives a clear roadmap for how you’ll attract customers and make your business a success. Keep it straightforward and compelling.

Financial strategy and forecast

The “Financial strategy and forecast” section of your retail store business plan is where you show the money side of your business. Investors want to see the numbers, so include things like:

• Estimated capital requirements : How much money do you need to get started and keep going?
• Profit and revenue models : Explain how you plan to make money and what your sales goals are.
• Sales volume projections : Predict how many products you expect to sell.
• Financial statements : Include balance sheets, cash flow projections, and any other financial documents.

These details help investors understand your business’s financial health and potential. Make sure your numbers are realistic and based on careful research and planning.

Management structure

In the “Management structure” section of your retail store business plan, you’ll provide details on how you intend to organize your team and manage your business effectively. This section involves explaining several key aspects:

Firstly, you’ll specify the number of team members you plan to hire. This is essential to understand the size and scope of your workforce.

Secondly, you’ll describe the roles and responsibilities of each team member. This clarification ensures that everyone knows their specific duties and contributes to the smooth operation of the business.

Lastly, you’ll illustrate how each team member fits into your overall business plan. This section helps investors and stakeholders comprehend how your team will collaborate and work together to achieve the business’s goals and objectives. 

A well-defined retail management structure assures potential investors that you have a competent team ready to execute your business plan effectively.

Homebase offers user-friendly employee management tools to streamline team communication , time tracking, and scheduling , helping you refine your management structure. 

Common mistakes to avoid when making your retail store business plan 

A successful business plan is as much about what you leave out as what you put in. Here are some common mistakes to avoid:

Too much detail

Avoid long, rambling text. Use visuals and graphics when possible and attach heavy content as appendices.

Poor financial planning

Account for growing expenses, taxes, and market influences in your financial projections.

Poor spelling and grammar

Basic errors can undermine how partners and investors view your plan.

Strengthening your business plan

To strengthen your business plan, consider your audience, which may include potential investors, business partners, and financial institutions. Be transparent, avoid exaggerations, and demonstrate the value of your idea.

Conclusion: Finishing your retail store business plan

A well-crafted retail store business plan is more than just a guide; it’s a tool to attract investors, secure funding, and set the foundation for a successful retail business. Leveraging tools like Homebase can help you stay competitive and efficient in the retail industry.

Don’t delay writing your plan—it could be the first step towards realizing your retail business dreams.

FAQs about writing a retail store business plan

What is a retail store business plan, and why is it important.

A retail store business plan is a comprehensive document outlining your retail store business’s model, goals, and strategies. It’s crucial as it provides clarity, attracts investors, and guides daily operations for success.

How does a retail store business plan differ from other business plans?

Retail store business plans are unique due to their focus on inventory management, marketing tactics to attract shoppers, and growth strategies centered on expanding customer reach.

What should I include in my retail store business plan’s business overview section?

In the business overview, provide a concise description of your retail business, including its structure, location, and the products or services you intend to offer.

How can a retail store business plan help secure investment?

A retail store business plan demonstrates a well-thought-out strategy, outlining business goals, target market, competitive analysis, and financial projections. It reassures investors, making your venture a more appealing investment opportunity.

What common mistakes should I avoid when creating a retail store  business plan?

Common mistakes include excessive detail, poor financial planning, and grammar/spelling errors. To avoid these, focus on clarity, accurate financial projections, and proofreading.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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How To Survive and Thrive In Retail Management

By Kate Eby | August 29, 2017

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The demise of retail due to online competition and the digital revolution is greatly exaggerated. If anything, the recent acquisition of Whole Foods by Amazon is the latest evidence that brick-and-mortar retail is here to stay. Customer-centric experiences rule the day, and shoppers overwhelmingly prefer to have their cake (researched and ordered on a mobile app) and eat it too (in a hip location in the presence of friends). That’s not to say the rules are the same for retailers as they are for online entities. In order to survive and thrive in retail today, your retail management strategy must incorporate the digital and physical customer experience to create value.

This retail survival guide combines business theory with practical strategies for finding your place in the world of retail management. There’s something here for entrepreneurs, students, and retail professionals. Learn about the foundations of retailing, common challenges, new trends upending the industry, advice for growing a small to mid-size retail business, information on careers in retail management, and strategies for surviving the world of retail.

What Is the Retail Sector?

The retail sector buys or creates goods and services and sells them to customers. Retailers add a profit margin to the wholesale or production price of an item, then sell the products to customers to make a profit.

But the retail sector is not a simple business of intermediaries or middleman activities. The reality is that retail is a dynamic sector requiring a careful combination of creativity, business theory, skilled practice, and technology to create value for customers. Retailers find ways to create value in the form of experiences, convenience, service, and more. The value-creating functions described by author Michael Levy in his definitive, widely used retail textbook, Retailing Management , are as follows:

• Providing an assortment of products and services
• Breaking bulk
• Holding inventory
• Providing services

Creating value is important, and the examples Levy provides are the foundations of successful retailers around the world. However, the retail sector is undergoing rapid change and expectations regarding the role it plays in society are increasing beyond the traditional retail model. Customers scrutinize retailers today under a new set of value standards, including social responsibility, environmental impact, workplace safety and diversity, and the forces of globalization and trade.

Digital disruption has been and continues to be harsh on the retail sector. Amazon is in the news daily, and, fairly or not, many see the e-commerce giant as a symbol of this disturbance. How will retailers avoid being “Amazoned” out of business? According to The Wall Street Journal , Amazon controls 20 percent of online retail in the U.S., and 90 percent of U.S. consumers choose Amazon as their online retailer of choice. Like Costco and others, the company started selling its own products — AmazonBasics — and the recent acquisition of Whole Foods shores up a large competitive weakness the company had in the grocery category. Amazon has 800 approved or pending trademarks. An investigation by Quartz uncovered that Amazon features 19 brands that it does not clearly identify as its own. The company merely states that these products are “exclusively for Prime members.”

The Journal article highlights some good news for aspiring retailers and those already in business. Author Ruth Simon features companies that are fighting back against digital disruption with sound retail strategy. For example, Luxottica brands Oakley and Ray-Ban are moving to enforce strict minimum advertised prices (MAP). MAP is a hot topic in the retail industry and a useful tool against the threat of slimmer margins and e-commerce advantages. Manufacturers and distributors enforce pricing to keep smaller, local retailers loyal and competitive with online competitors.

The in-store customer experience is also an effective retail tool and source of strategy to combat e-commerce disruption. Running gear manufacturer Brooks partners with retail management to help cover the cost of using a treadmill-connected iPad to provide customers with a custom footwear recommendation based on a runner’s biomechanics. To succeed in the world of retail, you have to combine the right mix of business theory and sound retail management strategy. So, you will have to compete with technology and the retail giants.

A New Retail Industry in The Making

The world of retail is changing, not dying. Despite the disruption and constant change associated with digital technology and online retailing, physical stores are here to stay. According to a report from A.T. Kearney, a global management consulting firm, the retail industry is thriving at the intersection of digital and physical retail. Stats from the report "On Solid Ground: Brick and Mortar Is the Foundation of Omnichannel Retailing" highlight the growth of — and customer preference for — in-store retail experiences. According to the report, two thirds of consumers used a physical store before or after purchasing online. Surveys from the research show that customers overwhelmingly prefer a shopper’s journey that involves a brick-and-mortar presence. The results indicate that retailers with a physical presence capture 95 percent of all retail sales. That’s not to say that retail management strategy isn’t evolving or that you don’t need to pay more attention to the new rules of the retail playing field. On the contrary, it is evolving, and it’s crucial that you pay close attention to those new rules of the retail road.

Today, you must combine sound in-store retail strategy with digital strategy, or “physical with digital,” to compete. Retail sales grew almost four percent in 2016, and the National Retail Federation (NRF) predicts similar growth for 2017. (First quarter sales for 2017 are up four percent.) Existing retailers, new entrepreneurs, and those aspiring to careers in retail management must understand that change is upending the businesses that were slow to adapt or outmaneuvered by retailers that adjusted quickly to shifts in customer behavior and technological disruption. In the current digital era, retail management is all about business transformation. Today, the retail management strategies you use to succeed embrace technology and e-commerce.

The Strategic Challenges of Retailing

The challenge for retailers is responding to the economic, technological, and customer disruptions with sound retail management strategy. E-commerce is the component of today’s retail management strategy that garners the most media coverage. But technology and online customer behavior are not a threat to retail management; they’re simply a part of the overall picture. So, even if you choose to avoid the online channel for your retail business, the competition and economic trends from e-commerce still impact your ability to succeed.

Underperforming retail businesses close every year. Shifting retail management strategy to account for lower sales, changes in customer preferences, or economic recessions has always been, and will always be, a necessary part of retail. The good news for aspiring retailers is that, despite challenges to retail success, there is an opportunity in retail management regardless of whether the business operates online or in person. The NRF reports that 90 percent of all retail purchases still occur in brick-and-mortar stores. New retail space grew in 2016 despite the continued growth and transformation of online retail. Physical retail space increased by 87 million square feet, and companies invested billions of dollars in brick-and-mortar expansion.

Types of Retailers

Before you start developing a retail strategy, you must understand the competitive landscape of your market. The North American Industry Classification System (NAICS) lists more than 1.6 million business establishments in the category of retail trade (code 44-45). This category includes a variety of types of retailers based on the types of products and services they sell (e.g., food retailers, men’s clothing, shoe stores, and motor vehicle and parts dealers). The four main categories of retailers are:

• Hardlines: Cars, appliances, furniture, etc.
• Consumables: Clothing, shoes, cosmetics, etc.
• Food: Bakeries, coffee roasters, butchers, etc.
• Art: Bookstores, musical instruments, arts and crafts supplies, etc.

The variety and assortment of products and services play a role in categorizing the types of retailers. Understanding locations, pricing, promotions to attract customers, and the unique merchandise mix within categories helps retail managers unpack the strategies of their competitors. Ownership is a retail category for retailers: independent retailers, single-store establishments, corporate retail chains, and franchises. To compete in retail, start by understanding the retail markets and the competition within your category, and learn to differentiate between the products and services a company provides and the types of customer a company targets.

The Top 10 Retailers of 2017

According to Stores, the magazine of the NRF, the nation’s top 10 retail power players in 2017 are:

• The Kroger Co.
• The Home Depot
• CVS Caremark
• Walgreens Boots Alliance
• Lowe’s Companies
• Albertson’s Companies

(Ranking data provided by Kantar Retail )

Examining the nation’s largest retailers at the highest level of operation sheds light on strategies and trends that retail management needs to understand. These retail behemoths survive and thrive in the new era because they have embraced the digital transformation and implemented a retail strategy to address the changing needs of their customers. Target recently announced that cost-cutting measures and improved digital operations led to an increased profit forecast for 2017.

According to Ray Gaul, Vice President of Research and Analytics at Kantar Retail, the top performers deliver increaed profit per square foot because of the transformation of the physical retail environment to address two new “shopper missions.” These missions — “buy online and pick up in store” — join the original customer missions of discovering products in the store, selecting the right one, and transporting the goods home to form a new economic model. Gaul predicts retailers will undergo a further transformation with a balancing act of store closings and remodels to address the new shopper missions.

The Changing Face of the Retail Business and the Origins of Retail Management

To understand the importance of retail management today, it is important first to understand the origins of the industry. The retail industry evolved from antiquity to present times, laying significant historical foundations for modern economies and influencing the development of vital technology. Ancient merchants conducted commerce by bartering for goods and services. The introduction of money (in various forms) transformed the exchange of goods and paved the way for specific locations to ply your trade as a merchant. The term retail is derived from the French word retail — a noun that means “piece cut off, shred, scrap, paring,” according to the Online Etymology Dictionary. The practice of selling goods in small quantities (or “by the piece”) dates back thousands of years before French merchants and vendors lined the open-air markets in Paris.

In the U.S., retail’s history is one of westward-bound, European entrepreneurs settling in the country and setting up shop. Large stores and retail chains opened in the late 19th century to provide staples for pioneers headed west. Private merchants were unable to compete on price and convenience. Supermarkets opened in the 1930s, benefiting from bulk buying and the convenience of electric freezers and refrigerators that allowed mass storage. People could make ice at home and store more groceries, so business was good. Retail stores prospered as shipping and selling goods became more economical, and cheaper transportation created more growth opportunities. Markets and Main Street evolved into centers of commerce vital to the survival and prosperity of Americans during the period known as the Second Agricultural Revolution. The success of capitalistic markets and the economic prosperity of the U.S. introduced variety (and, as a result, competition) into products and services.

As retail outlets grew in size and capabilities, employed more people, and created more sophisticated business processes, retail management became an essential job. Retail managers were hired to oversee store management functions. Eventually, retailers empowered and trusted retail managers to make strategic decisions about their goals and policies. The retail sector is now the largest industry in the U.S. and employs millions, and many of the top publicly traded companies and wealthiest citizens started in retail. Today, the economic impact of retail is global and cannot be understated. The economic significance of retail management, the need for qualified talent in careers tied to the industry, and the importance of sound retail strategy and technological innovation have never been greater.

Retailing Trends and New Developments

It is critical for retailers to pay attention to and learn from trends in society, culture, and technology. Even if these trends originate with large, national retail companies, there is a real potential for a trickle-down effect on small and medium-size retailers. Proactively identifying retail trends is an opportunity to create unique customer value before the competition does. The primary force behind successful retail management operations is the customer value proposition. Creating value is the main function for retail businesses. It is also the component most critical to the industry’s long-term success. Paying attention to, learning from, and managing retail trends all create value.

The Consolidation of Retail Businesses

The consolidation of national retail businesses transforms the retail industry as a whole. Store closures and cost-saving labor cuts impact retailers within specific geographic regions of large companies undergoing mergers and bankruptcy. Local consolidation activity that results in new store openings and real-estate developments affects retailers on multiple fronts. Traffic concerns, changing customer demographics, and access to a qualified workforce are some of the reasons to track consolidation-related trends. In addition, the consolidation of different categories of retail business trickles down to retailers of all sizes as they compete for value propositions and customers. For example, Walmart purchased Jet.com to grow e-commerce business and compete with Amazon on shipping logistics and category expansion. Amazon responded by purchasing Whole Foods, a move to capture the grocery category, Walmart’s strongest category of growth.

The Use of Data and Analytics in Retail Strategy

Although the term big data is ubiquitous these days, it can be an incomplete approach to retail strategy when smaller retailers are trying to learn from the trends of the major omnichannel retailers. (That’s not to say you should disregard data analytics altogether - it is certainly a trend worth watching.) In the book Small Data: The Tiny Clues That Uncover Huge Trends , author Martin Lindstrom points out that “Big data is often compromised whenever humans act like, well, humans.” He makes the case that big data is accurate in generating correlations between millions of data points but often fails to provide the information necessary for, say, small retailers to pivot around successfully. Why? According to Lindstrom, big data fails to highlight why humans have certain habits and desires and, therefore, you “might find it hard to find meaning or relevance” without human insights.

Lindstrom highlights comments from Tom Adamski, CEO of Razorfish Global, at the 2015 Cannes Lions Festival. Adamski proclaimed that digital media and big data contributed to a “global decrease in brand loyalty” and that “brands are not treating us as individuals.” Adamski believes the failure to “market to me” is a result of “archaic” and “flawed” segmentation processes. Lindstrom notes that big data is behind the preoccupation with incomplete insights that fail to value the human touch. A combination of big-data analysis and small-data observations is preferable. For example, you can gather a small group of loyal and new customers and ask them about their in-store shopping journey, or you can survey online customers regarding their experience shopping on your website.

Generational Retail Customers

In the book Style and Statistics: The Art of Retail Analytics , author Brittany Bullard makes the case that retailers need to understand the importance of how different generations (baby boomers and millennials) mix. Bullard emphasizes the role that millennials like herself have played in the retail workforce, where retail management leverages analytics, automated business processes, and creative means for increasing efficiencies. By 2020, millennials will make up 50 percent of the retail workforce (70 percent by 2030). The direct impact that different generations have on retail stems range from how they perceive technology to how they might drive changes in retail management processes. Customer trends from generation to generation are important as well. Millennials and their predecessor, Gen Z, value individualism, creativity, and purchasing experiences over products. According to Bullard, the customer-centric retail strategy is more effective with millennials. They prefer to spend money with retailers who are engaged in social responsibility efforts, and they track the societal implications of retailer’s business decisions.

Mobile Is Key to Retail Strategy

On an average day, American consumers check their phones 45 times and spend more than three hours on mobile devices. That said, consumers still do more browsing than purchasing via mobile browsers, as desktop browsers still dominate conversion rates, according to the NRF. With the rising influence and purchasing power of millennials and Gen Z consumers in particular, retailers must account for the multichannel customer experience trends. Retail management strategies need to account for the click-to-brick trend (customers who research products and shop the competition on their phones) without losing focus on enhancing the in-store shopping experience. The rise of mobile retail channels places more emphasis on effective social media strategies for advertising and communicating with customers on the move.

What Is Retailing Management Strategy All About?

According to Retailing Management , “Retail strategy indicates how the [retailer] plans to focus its resources to accomplish its objectives.” Levy defines retail strategy with a three-part statement that identifies the following factors:

• The target market(s) in which a retailer focuses its resources
• The retail “format” (products and services, pricing, communications, location) that satisfies the needs of the target market
• How the retailer will build a sustainable (long-term) advantage over competitors

A thorough operating plan is necessary to accomplish the objectives of the retail strategy. Retail management requires ongoing strategic planning and incorporates the ideas and feedback of stakeholders at all levels before leadership decides on the final direction based on profitability. According to Levy, the retail strategy plan includes a sequence of seven steps:

• Defining the mission
• Conducting a situation audit
• Identifying strategic opportunities
• Evaluating the alternatives
• Establishing specific objectives and the allocation of resources
• Developing a retail mix to implement strategy
• Evaluating performance and making adjustments

Levy defines retailing as “a set of business activities that adds value to the products and services sold to consumers for their personal or family use.” Managing this activity involves leveraging business processes and strategy that add value to the customer and the products or services they desire. In order to cover costs and earn a profit, retailing management requires an understanding of the customer, their needs and wants, the goods and services they desire, and the preferred customer experience.

Surviving The Retailing Jungle

Coping with Retail Giants: Gaining an Edge over Discounters is author A. Coskun Samli’s manifesto for small independent retailers surviving the “retail jungle” full of behemoths. In the book, he advises following a “carefully constructed game plan” that is flexible enough to accommodate changing customer behavior. In the retail jungle, smaller independent businesses cannot win the “survival of the fattest” contest. Thousands of retailers try to do so without the competitive advantage that a flexible, strategic operating plan provides, and many end up disappearing in the jungle. Samli calls this effect “retail Darwinism.” To avoid getting swallowed whole by retail Darwinism, the competitive advantage, according to Samli, should generate customer value and brand loyalty. The retail advantage is not an “all things to all people” effort that sacrifices customer well-being and compromises your business - it is a retail management skill developed with a real strategy and a customer-centric approach.

Human Resources Retail Management Strategy

Retail is a labor-intensive industry driven by activities (buying, designing, marketing, engaging in customer service, and selling) performed by people. Employees play a significant role in retail management strategy and planning via decision making, entrepreneurial endeavors, and creative risks. Samli advocates developing human resources activities as a strategic tool. His argument for leveraging retail’s identity as a “people business” is based on the theory that large retail giants have a poor HR image. Large retailers consistently grab headlines for unfair compensation practices (Walmart), frequent burnout and high turnover (Amazon), and unsafe workplace conditions (Uber), providing the evidence for this perception bias strategy. Hiring the right people, training them well, and generating loyal, enthusiastic employees help modern retail managers succeed in the retail jungle.

Levy dedicates two chapters in Retailing Management to HR management. He views HR strategy for retail as a competitive advantage because of the cost-savings of low turnover and increased productivity, the benefits that happy employees have on the customer experience, and the difficulty competitors have duplicating these advantages. Levy highlights the use of technology in the workplace as an excellent opportunity to leverage the competitive advantage of HR strategy to create superior training programs. Smart retailers use technology like customer relationship management (CRM) software to identify, manage, and develop loyal customers. CRM technology is only as useful as the user, so invest in ongoing training for your sales force, and empower retail management with advanced analytics training to identify valuable trends in CRM data. Learn more about the basics of CRM, and find information on certification and training here .

Location, Location, Location: The Golden Rule of Retail Strategy

In what amounts to the golden rule of retail stores, physical location often ranks first, second, and third on the list of most important retail strategy decisions. There are a variety of options available for retail locations; for instance, a historical building that a retailer renovates into a hipster coffee bar/butcher shop/beard salon concept. Airport, shopping mall, town center, warehouse district, food truck — the options for strategic placement and demographic segmentation are vast. The location type must support the retail strategy. This means that the location must be consistent with the target market, the product and service mix, and competitive positioning.

Levy suggests that choosing a retail location is part science, part art. It involves a series of trade-offs including cost, customer traffic, environmental and economic factors, legal obligations, and more. Profitability is at stake, and retail management decisions don’t stop once the retailer selects the location. There are steps to evaluating the particular site location after selecting the area or region. The Huff Gravity Model predicts the probability of customers choosing a retail store, with convenience and selection size factored into the equation. Find more step-by-step information on how to calculate this consumer behavior .

Locations in Online Retail

Location strategy is equally important for online retailers and e-commerce businesses. Where you choose to host your site, the partner websites and online brands you collaborate with, and the economic and legal obligations for global commerce are just a few considerations. Retail occurs at the intersection of physical and digital spaces. Where you choose to conduct your business online must fit in with your overall retail management strategy and business processes. For example, inadequate bandwidth, slow page loads, or, worst of all, security breaches of customer data, can all have a detrimental effect on your customer value and your ability to compete.  

There are numerous hosting platforms and e-commerce technology providers to consider.  According to its website, Shopify "is the leading cloud-based, multichannel commerce platform designed for small and medium-sized businesses.” The company took advantage of the demand for an online platform that could manage more than just digital marketplace transactions. Since Spotify released its platform in 2006, more than half a million businesses have sold $40 billion worth of merchandise through the site. Carefully consider your options for online retail locations, and partner with qualified technology consultants to decide where to host your site. Location-based strategy is crucial for omnichannel retailers who sell online.

Omnichannel Retail Management Strategy

The term channel describes a mechanism (such as catalogues, mobile apps, or kiosks) for reaching customers and connecting with them. The two retail channels that get the most attention are in-store and online. An omnichannel retailer seamlessly engages with its customers across multiple channels. One example of omnichannel retailing is the “buy online, pick up in-store” method of customer interaction. Digital technology expands the omnichannel experience and provides retailers and customers with a variety of channels to interact, including social media, mobile games, audiobooks, and podcasts. Customers are less loyal, and technology encourages a greater level of competition.

Omnichannel retail strategy is a way of combating this challenge, but it also presents its own set of difficulties. For example, the variety of options that customers have creates competition that impacts a retail manager’s inventory. For example: Where do you stock your products, and where do you invest capital to enhance customer experience and services? Will your target customer prefer the in-store experience of the brick-and-mortar location, the comfort of shopping at home and having the product transported by third parties, or a combination of buy online, pick up in-store? For some retailers, an effective omnichannel retail strategy is the difference between survival and success.

Financial Retail Management Strategy

Retail finance is a broad topic beyond the scope of this introductory article. At its core level, financial strategy in retail management starts with understanding the profit model of your business and the relationship to the other retail strategies presented in this article. Different retailers have different financial attributes. A variety of activities and factors based on a retailer’s type of operations determines financial performance in retail management. To get started, retail management professionals should understand standard retail math formulas, how to use them, and what they measure. According to The Balance, a financial website, retailers use standard formulas to track merchandise, measure sales performance, determine profitability, and help create pricing strategies.

Common Retail Math Formulas

Retail math formulas are crucial to the understanding and mastery of retail strategy. We’ve listed the most common ones here:

• Acid-Test Ratio = Current Assets - Inventory ÷ Current Liabilities: This formula determines credit-worthiness and helps investors determine risk based on liquidity. If sales stopped, how would a retail business cover short-term financial obligations?
• Average Inventory (Month) = (Beginning of Month Inventory + End of Month Inventory) ÷ 2: This calculation involves the price of merchandise minus discounts, plus freight and taxes. Find the average by adding the beginning cost inventory for each month in the period to the ending cost inventory of the last month in the period. To calculate seasonal inventory, divide by 7. To calculate annual inventory, divide by 13.
• Break-Even Analysis ($) = Fixed Costs ÷ Gross Margin Percentage: This calculation represents the junction where sales equal expenses. There is no profit or loss for your retail business.
• Margin Percentage = (Retail Price - Cost) ÷ Retail Price: This formula determines the amount of gross profit a business earns when it sells an item.
• Gross Margin = Total Sales - Cost of Goods: This is a formula to determine the difference between an item’s cost and the price it sells for.
• Gross Margin Return on Investment (GMROI) = Gross Margin $ ÷ Average Inventory Cost: This formula helps buyers evaluate whether they’ve earned a sufficient gross margin on the products that customers have purchased, compared to the inventory investment they require to generate the gross margin.
• Contribution Margin = Total Sales - Variable Costs: This represents the difference between total sales revenue and total variable costs. In retail, the contribution margin is the gross margin. This formula helps you decide which products to add or remove and at what price.
• Cost of Goods Sold (COGS) = Beginning Inventory + Purchases - Ending Inventory: This is the price paid for a product, plus additional costs, such as shipping and handling, to move the merchandise into inventory and have ready to sell.
• Initial Markup (IMU) Percentage = (Expenses + Reductions + Profit) ÷ (Net Sales + Reductions): This formula determines the selling price on an item in the retail store.
• Inventory Turnover (Stock Turn) = Net Sales ÷ Average Retail Stock: This calculates how many times a business sells and replaces inventory in a given period of time.
• Net Sales = Gross Sales - Returns and Allowances: This means revenue minus any returns and allowances. Net income is the income that remains after subtracting taxes, interest expenses, and depreciation.
• Open to Buy (OTB) = Planned Sales + Planned Markdowns + Planned End-of- Month Inventory - Planned Beginning-of-Month Inventory: This is the difference between the inventory needed and the inventory available. It includes inventory on hand, product in transit, and outstanding orders.
• Sales per Square Foot = Total Net Sales ÷ Square Feet of Selling Space: Retail managers use sales-per-square-foot data for planning inventory purchases. It is a rough calculation for return on investment, and managers use it to determine a retail location’s rent. It does not include storage or any areas where you do not display products.
• Sell-Through Rate = Units Sold ÷ Units Received: This is a formula to compare the amount of inventory a retailer receives to inventory sold.
• Stock-to-Sales Ratio = Beginning-of-Month Stock ÷ Sales for the Month: This formula calculates the quantitative relationship between the beginning of the month inventory and the amount sold that month.

Communications Mix Retail Management Strategy

Retail communications include the messaging, marketing, and advertising efforts to inform customers about brand image or the products and services a company offers. According to Levy, retail communications programs have long and short-term implications. An effective communications strategy builds a retail brand’s image over time and helps differentiate the brand from the competition in the long term. The short-term objectives of retail communications include the promotion of products and services through advertising and content marketing to increase sales over a particular period.

In his book Smart Retail: Winning Ideas and Strategies from the Most Successful Retailers in the World , Richard Hammond advocated keeping your retail communications strategy simple (2017, 4th Edition). “Marketing is about understanding who your customers are, where they can be found, what they need, and how much they will pay to satisfy those needs,” Hammond writes. He believes that answering a series of questions improves your decision making concerning promotions and advertising:

• Who might want to shop at a store like ours?
• What might they like about us?
• Which products would excite them?
• What kind of promotions do they like?
• Where can I find these people?
• What should I tell them?

You can’t just answer these questions with social media and digital marketing efforts. Hammond acknowledges that today, digital trends impact a retailer’s communications strategy. He’s optimistic that technology is finding its place and that “real and digital” are working together to “make life easier to enjoy.” Hammond’s theory that technology enhances the experience - but is not the experience itself - is consistent with his view that physical retailing and retailing online are not different.

“They’re the same thing,” writes Hammond. “All retailing is about customers, engaging people, creating experiences that make them want to shop, supporting these experiences after the sale, and putting ourselves into the customer’s consideration.”

Promoting to Endure in Retail

In Coping with Retail Giants , Samli makes the case that, especially for small, independent retailers, the communications process is essential for survival. “Being a well-kept secret in the marketplace is almost deadly for a retailer,” writes Samli. You must promote your retail store’s image, and Samli emphasizes a communications strategy focused on name recognition. The goal of this retail strategy is stimulating a “positive attitude in the marketplace toward the retailer . . .  and as a result, reinforce or improve the attitude of the target market toward, say, [the] store.” Retailers of all sizes use promotions as part of their retail communications mix, but one of Samli’s most important messages is the significance of promotional activity and consistent messaging activity for small retailers competing with retail giants.

Your communications strategy should leverage digital promotions via advertising and social media marketing as well as through live, promotional events, in-store promotions, and physical and emotional promotions of your brand image that utilize environmental strategy (music, scents, merchandise, location, etc.). In the Smart Retail chapter “Promote or Die,” Hammond recommends 30 promotions. Here are three promotions to consider for your retail communications strategy:

• Pop-Up Shops: Retail pop-up shops and space brokers, such as PopUp Republic, offer an innovative approach to your retail strategy by facilitating the creation of these concepts. Retailers use pop-up shops, restaurants, events, and other forms of physical marketing as a temporary and creative method to market their brand with a physical promotion of their product and service. The advantage — over strictly digital promotions — is a focus on the real customer experience that mimics the physical location and long-term brand image that the retailer is promoting, while providing a vehicle to sell high margin or featured merchandise over a given period. Or, as Constance Gustke put it in her New York Times piece on pop-up stores, “In cyberspace, goods can’t be touched.”
• Retail Collaboration: “Two brands are better than one,” says Hammond. He uses fashion and homewares as examples for the benefits of different brands (from different retail sectors) collaborating on promotions and messaging. H&M partners with designers and fashion icons to promote collections in their inventory and Target built their homewares reputation in partnership with Martha Stewart. The advantages of this promotional strategy are the essential role that technology plays in the collaboration. You can - and should - design digital advertising campaigns and social media marketing efforts around a shared audience to enhance the physical, in-store collaboration and overall results. If you are a small retail operation without an established audience online, or you are intimidated by social media and fear you don’t have the influence or recognition for active collaboration, consider leveraging a form of cooperation and communication strategy known as influencer marketing . Today, this type of collaboration plays a significant and often highly profitable role for smaller online retailers and distributors.
• Special In-Store Events: This type of promotion is a combination of Hammond’s suggestions, surveys and special nights. According to a report by Salesforce, 26 percent of survey respondents attended in-store events, and 58 percent reported they were more likely to make a future purchase in that store. Invite select customers (think strategically based on your target customer or the new market you wish to attract) to your location and promote the event with digital media. If appropriate for your market and customer, provide entertainment, food and drink, or a unique theme for the event that supports a charity or cause. Take advantage of the audience and your store environment to survey guests (offer an incentive) asking questions that answer the advice you seek or opinions that drive your future communication strategy. Soliciting customer insight based on the physical environment or your store, specific product merchandise, or customer experience is a promotional strategy that pays dividends on future retail communication activities (for example social media imagery or advertising sales copy).

Customer Experience Retail Management Strategy

Author Constant Berkhout encourages his audience to advance retail marketing to the next level of “shopper happiness.” In his book Retail Marketing Strategy: Delivering Shopper Delight , Berkhout covers different aspects of retail marketing (trade marketing, category management, and various models for shopper behavior). He concludes (“with no disrespect,” to previous achievements in the field) that achieving shopper happiness is the “ultimate goal of great retailing.” Recalling Hammond’s point that online and physical retail are the same, the “store” should apply to your website and the customer experience of your online operations, as well as the brick-and-mortar location. Berkhout advocates for customer-centric retail communications or “aligning everything retailers do . . . to delivering shopper happiness.”

To deliver a positive customer experience through retail marketing strategy, Berkhout uses an emerging trend in retail marketing: neuroscience research. He highlights two examples of retail marketing strategies retailers can apply that focus on the customer experience:

• Keep In-Store Marketing Simple: The store is not the ideal place to communicate complicated information. Neuro research suggests that sophisticated communications need to reach the customer before the shopping trip to connect effectively. Do not rely on signage, brochures, in-store videos, or your sales staff to communicate complex messaging. Use your retail communications mix (advertising, marketing, promotions, etc.) to craft proactive, intricate messaging before a new customer reaches your store. For example, an email drip campaign or monthly newsletter that communicates your overall mission to source products from socially responsible partners or profiles individual customer stories.
• In-Store Impulse: Some retail categories work great for impulsive shoppers, but overall, neuro research suggests a shopper’s overall impulsive behavior is low in store. Test which products work well on end-of-aisle locations, or “end caps.” Which products and services work well as “reminders” for your customer? Improve customer experience with expertise. Encourage your sales staff to guide the customer to products that enhance their purchase by asking questions and recommending items the customer may not have considered. Use “customers also purchased” suggestions and shopping cart tracking technology to send reminder emails when items are abandoned without purchase.

Berkhout cautions that neuro research is not a deterministic solution. Retailers should use findings about the customer’s subconscious brain and buyer behavior combined with traditional behavioral and psychological research to find insights on the customer experience.

Retail management is evolving to account for Berkhout’s emphasis on customer experience strategy. It is the “business of serving people” and not a pure managerial or logistical field of study or profession. Customers do not experience retail shopping, in-store or online, as a combination of individual categories. Rather, according to Berkhout, it is one journey. A mindset that “works towards shopper happiness and attempts to unravel the deeper emotional needs of the shopper” leads to “more human, sustainable, and fairer retail practice,” writes Berkhout.

What Is Retail Management?

In short, retail management is the process of running retail storefronts. It requires knowledge of real estate costs, pricing strategies, cost of goods sold, inventory availability, and logistics. Additional skills include customer service, efficient planning, and control of valuable resources.

The need for effective retail management is stronger than ever due to the disruption of technology, the retail giants, and shifting customer behavior. Customers are less loyal than any time in history because of seemingly unlimited choices. Efficient retail management is necessary in the world of omnichannel shopping and multi-billion dollar consolidation of technology and infrastructure by companies like Amazon and Walmart. Small to medium-sized retailers need to attract strong retail managers and implement effective strategies to overcome these disruptive forces.

Opportunities abound in the retail industry. According to the most recent census data, 1 in 5 U.S. workers are employed by retailers, and retail is the largest private employment sector in the U.S. Retail is also the leading source of employment for Americans age 16 to 24, and the unemployment rate of young Americans fell to its lowest level in 50 years in summer 2017. The size and economic impact of the retail industry create challenging and rewarding career opportunities.

Retail management is a dynamic career field. The popularity of retail management jobs makes sense once you understand the breadth of business expertise and knowledge required. For those looking to grow as well-rounded entrepreneurs, from small business to large corporate retail chains, retail management offers a unique path to becoming a business generalist. The retail management career field combines skills and attributes from HR, accounting, finance, creative design, information technology, and more.

Preparing for Retail Management Careers

According to the NRF, the retail industry offers retail management trainee positions for employees looking to advance. Large, well-known retail stores have formal training programs for managerial candidates and provide specific skill training required to excel within the company. If you don’t want to invest in school, consider growing your retail management career with a company offering in-house training and advancement. Keep in mind that without a college degree, however, you may need to start in entry-level sales or customer-service related positions.

It is easier to land a retail management job if you do have a degree. Here’s a sample of universities offering four-year undergraduate degrees in retail management (or related fields):

• University of Washington-Bothell : Retail Management, Bachelor of Arts, School of Business
• Syracuse University : Retail Management, Bachelor of Science, Whitman School of Management
• University of Arizona : Retailing and Consumer Science, Bachelor of Science, College of Agriculture and Life Sciences
• University of Arkansas : Retail, Bachelor of Science, Bachelor of Arts, Sam M. Walton College of Business

There are also alternatives to the traditional college degree route for working professionals or anyone interested in the flexibility and open participation of online education. Massive open online courses (MOOCs) allow students to explore retail management specializations in place of certification or degrees. MOOCs enable you to tailor your skill development and grow within the vast retail management field of study to address strategic issues, financial considerations, and store management related skills:

• Coursera : Course offerings include Marketing Mix Implementation Specialization and Channel Management and Retailing.
• Lynda : Course offerings include a Retail Manager Playlist and Data Fundamentals for Retail, Sales, and Marketing.
• Udemy : Course offerings include Fast Track Retail Buying and Merchandising and Retail for Business Analysts and Management Consultants.

Retail Management Career Opportunities

Retail is a competitive and challenging environment requiring a variety of skills and responsibilities. Retail managers engage in business activities such as capital allocation, purchasing, sales force management, accounting, warehouse management, and marketing activities such as advertising, promotions, and market research. Retail management professionals have a broad range of expertise and interests. Backgrounds in fields such as finance, accounting, human resource management, supply chain management, information technology, data and analytics, sales consulting, as well as marketing are well represented in retail management. In addition to retail management, a variety of related career opportunities exist. Some examples include:

• Retail banking consultants and analysts
• Retail salesperson
• Retail operations management
• Retail promotions, advertising, and marketing
• Loss prevention
• Retail store designer
• Commercial retail real estate
• Information technology for retail
• Warehouse distribution and logistics
• Human resources

Retail management is also financially rewarding. Indeed.com estimates an average annual salary of $47,000 for Retail Manager jobs in the U.S. There is a large growth opportunity in this field, and retail managers with more than five years of experience can expect considerably more earning potential depending on the size and pay structure of the company. Flexible compensation programs are standard for retail management jobs. Performance-based plans increase the earning potential of retail managers based on profit and loss related metrics or balance sheet management. It is also common for entrepreneurs from retail management backgrounds to start businesses that, if successful, provide significantly more financial freedom and earning potential. Some of the wealthiest people in the world made fortunes from retail management, including Phil Knight of Nike, Ingvar Kamprad of IKEA, and Jack Ma of Alibaba.

Essential Skills of Effective Retail Managers

Whether you are starting your own small business or working for a large retail chain, as a retail manager, you may act as a business strategist, HR manager, financial advisor, store designer, and more. Here’s a list of important skills in retail management:

• Personality: Retail management involves working with people. Your customers need motivation to buy your products and services, and your employees need motivation to create the appropriate customer experience. A positive attitude, patience, and active listening skills are critical to success.
• Experience: The highest level of retail management careers and entrepreneurship opportunities require growth. Earning job titles and accomplishments while climbing the ranks of large corporate retail chains is one example. However, learning how to problem solve through periods of prosperity and recession with a small business represents growth and value of experience as well.
• Time Management: Successful retail managers have responsibilities in multiple disciplines: brand image and store design, profit and loss budgets, customer service and sales force management, administration, and community service relations. Time management and proper planning are critical to success.  
• Leadership: Goal setting and reinforcing performance standards are essential in retail management. Effective leaders delegate important work and learn to coach for resultsto succeed in the performance-based retail industry.  
• Teamwork: The retail industry is diverse and demanding. Most operations, large or small, serve demanding customers and require odd hours such as weekends and evenings. Active retail managers must foster teamwork to accomplish goals and create positive customer experiences. A strong team is crucial in the stressful environments of seasonal retail operations.
• Managing Change: Customer’s attitudes change rapidly. Product shortages and inventory problems arise frequently. Seasonal retail operations require frequent adjustments to product lines. Change can create chaos in retail management. The profession demands flexibility, problem anticipation, and strong leadership to reduce resistance to change.
• Educate and Train: Retail management careers sometimes require frequent relocation, new store openings, and implementing new technology. The ability to educate and train staff on the latest product trends, service expectations, and company-specific goals are critical.

Profit Is the Point: The retail industry is a performance-based industry built on cost control and profitability. Management should have familiarity with the standard formulas for measuring profit margins, inventory, customer acquisition, etc. A firm understanding of balance sheet principles and basic accounting functions is crucial to succeeding in retail management.

What Is a Retail Management System?

A retail management system (RMS) is a combination of applications and hardware within the existing point-of-sale (POS) platform that a retailer uses to manage their business. It may include solutions for customer service, payment processing, ordering, inventory, and other processes.

For more information, check out our guide to retail management systems .

Recommended Reading: Essential Retail Management Books

Stay ahead of trends and learn strategies for surviving and thriving in retail management from business professionals, academics, researchers, and former retailers. Here’s a list of books every retail management professional should read:

• Retailing Management (8th edition), by Michael Levy and Barton Weitz
• Small Data: The Tiny Clues That Uncover Huge Trends , by Martin Lindstrom
• Style and Statistics: The Art of Retail Analytics , by Brittany Bullard
• Coping with Retail Giants: Gaining an Edge Over Discounters , by A. Coskun Samli
• Retail Marketing Strategy: Delivering Shopper Delight , by Constant Berkhout
• Smart Retail: Winning Ideas and Strategies from the Most Successful Retailers in the World (2017, 4th Edition), by Richard Hammond
• Retail 101: The Guide to Managing and Marketing Your Retail Business , by Nicole Reyhle and Jason Prescott
• Shopper Marketing: How to Increase Purchase Decisions at the Point of Sale , by Markus Stahlberg and Ville Maila
• Inside the Mind of the Shopper: The Science of Retailing (2nd Edition), by Herb Sorensen
• Cool: How the Brain’s Hidden Quest for Cool Drives Our Economy and Shapes Our World , by Steven Quartz and Anette Asp
• The Aisles Have Eyes , by Joseph Turow

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How to Write a Retail Business Plan That Succeeds

Running a solid business can be overwhelming. The initial thoughts of how you will succeed in a competitive world need advanced planning and feasible actions.

Commonly, the retail business owner is too busy to focus on the product, the pricing, and other essentials, the primary need to plan in advance is neglected.

This neglect results in poor management of the supply chain, misuse of the limited resources, and in the end, losing the profit margin of the business that was so hardly built. To avoid this undesirable outcome, we’ll take a look at the most practical and organized way to write your retail business plan. When you think about setting a retail business plan for your business, there are a few strong reasons why.

Let’s meet two retail professionals with different needs. We know that a suitable business plan format will develop by knowing their specific needs.

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Meet Ian and Julie before writing your business plan

His family has been running a retail store for more than 15 years. They know about their products and generate sales. However, by the year-end, they don't make enough profit. That’s why they need to replan their business structure for more profit.

Or, meet Julie. She is planning to open a brand new retail store, and she does not have any prior experience in retail. Thus, she wants to know the basic outline so she can cater to her business expectations.

No matter what triggers the interest, a well-prepared, and indeed, an executed business plan will change the course of your retail business. The business plan is essential in defining short-term and long-term business goals and how to succeed. It also gives you a perspective on your business besides the costs and effects of your decisions.

Now let’s try to imagine these two retail businesses. It’s important to treat your business plan as your business partner. Like every partnership, this one also depends on sincerity and open-mindedness. Think about how you’d tell your business to your partner, family, or potential customers.

You’d probably begin to ask some questions before writing your business plan.

Questions to ask before starting a retail business plan:

• Why did you start this retail business in the first place?
• What is the product or service you’re offering?
• Why does your retail business matter, and to whom?
• Who you’d want to see in your store as customers and why?
• How will you sell this product to your customers? (your main distribution channels, marketing strategies, or promotions etc)
• What is your pricing strategy, and your competitive advantage?
• What and who do you need to run this business? (Do you need to invest in new technology? Who will work at your store or who will manage your finances?)
• How much money you have, and how much you’d want to make if you sell your company at some point?

These essential questions will form the basis of your business plan. Now, get ready to take notes because you will prepare a business plan checklist by the end of this article to follow your progress.

What are the essentials of a retail business plan format?

A traditional business plan involves several headlines that fill the questions mentioned above. Here are some of them:

Executive summary

An executive summary tells your “audience” about the essence of your company and why it is/will be successful.

• Retailer 1, Ian , will tell how his company has the trust of its customers
• Retailer 2, Julie , will tell how she got into this business in the first place and what makes her product unique.

Thus, an executive summary should be a brief overview of your business plan .

A hint about the executive summary is, you may just leave it to the end . Fill out every other section in your plan, go through the details, finalize it, and then come back to the top and summarize it all. This way, you actually think about the specifics of your business and will build your way to the top, not the other way around.

Company description

The company description part is where you tell your audience about what you do, who you are, the problems you solve for your customers, the competitive advantage you’re bringing, and your expertise. The company description is about what you and your assets are good at. Make sure you include:

• Business structure (sole ownership, partnership, family, etc.)
• Business model (B2C, B2B or other)
• The industry you’re in
• Your mission and vision statements: This part is one of the most undermined sections of a business plan. Your audience will want to know about your value proposition as much as your numbers and your businesses. Putting a compelling mission and vision statement in action is also crucial for you to think about what you are selling and, most importantly, why.
• Some history of your company or yourself
• Company culture & principles

Do not forget to add some local and numerical information such as where your company/stores are located at, the year your retail business started, and the number of employees you have/or plan to have.

When writing about your company objectives, it’s important to follow S.M.A.R.T format; specific, measurable, attainable, realistic, and time-bound.

Here is a brief example of these two retailer’s company description:

Retailer 1: “Ian’s Business” is a family-owned business operating since 1995 with 12 employees and third-party suppliers. We are the first retailer in Colorado to sell organic produce from local farms to hustling white-collar professionals to be delivered to their door. We value locality, state-of-the-art produce, and punctuality. Our target is to reach a wider audience and increase our market share by 20% by 2023.

Retailer 2: Julie is a solopreneur who has a passion for outdoor gear for moms. “Julie’s Business” picks the best gear from stores all around the world and sells them at juliesmomgear.com. We value gender equality and believe that more moms should enjoy outdoor sports with their children without thinking about safety. Julie’s Retailer believes in disruption and aims to be the first brand in the United Kingdom to mom gears with a market share of 60% by 2028.

Market analysis and competition

You would like to tell your audience about the people interested in your products and other people who sell them. This part will give you a broader perspective on your target customers.

Market overview

The size of your reachable market is where you’d like to begin. Your market is where you want to sell those products, so for Ian, it might be the whole Colorado region, and for Julie, it's the United Kingdom as a country.

Try to work with a market research company to gather this information, and if this is not possible for you, do your own little market research of the people who belong to your target customer group. It will give you a better view of the size of the market, your competition, and how far you should go to sell your products.

Remember that every little decision you make affects a wider objective in your business plan.

Competition

We all want to have some leadership in our industry. However, there are and will be others who we compete with. In today’s digitalized world, your competition is not limited to your neighborhood, your country, or even your industry. Retailer Julie may think that she is in the outdoor gear industry, but a significant baby clothing outlet can have a mom line that serves both needs.

So to define your competition, don't just consider your direct competitors but also think broadly to determine what service offering your target customer would fall for.

If it's easier for a mom to shop for outdoor gear while she is at a baby store, then that baby store is also on your competition list.

SWOT Analysis

The secret abbreviation that sounds like a Hollywood movie clearly defines your situation among your own proposition and the outside factors that affect your business. No matter how this four squared diagram may look easy, this analysis will guide you in more ways you can imagine in terms of your product and your market.

It helps you to focus your attention on your strengths and weaknesses, as well as your competitors’ or your market’s opportunities and threats.

Products and services (also customers)

In this section, you need to clarify your products that are your main revenue generators, and the services you offer around them. Include your primary selling proposition and what makes your product or service stand out in the competition.

For Ian , this would be the local produce that he’s collecting from farmers that also impacts the local economy.

For Julie , this is the rare offering of a mom outdoor gear, which can be hard to find in a typical outdoor gear store.

Do not miss the chance to explain your services, too.

At-home delivery, 24 hrs availability, or subscription services might be good examples to include.

Marketing plan

Even though we all realize that a marketing plan is subject to change in business progress, it’s preferable to plan and get the basics on how you'd like to market your products.

Retailer 1, Ian , may choose to opt-in a local news outlet and inform all the white-collar workers around Colorado that he’s selling fast delivery local produce.

At the same time, Retailer 2, Julie may launch an extensive online advertising campaign targeting her potential customers through social media .

No matter which marketing strategy you execute, you use a few essentials in your business plan.

Related: Digital Marketing for Retailers: Every Tactic and Channel You Must Know

As Elon Musk said,” brand is just a perception, and perception will match reality over time.”

Your customers want to be perceived by a good brand image and receive the offering as well. So you’ll need to include how you’ll brand your product in your business plan so that the audience will have a better understanding of your place in the market.

Related: 15 Creative Retail Display Examples to Increase Foot Traffic and Sales

The pricing can also differ depending on seasonality. However, the choice and the freedom to place your product in a segment are up to you. You can choose to be a low-cost retailer with a lot of sales but low margin, and you can also choose to be a high-end retailer that relies on flash campaigns to generate more sales.

Retailer 1, Ian , is probably suffering from being a low-cost retailer because he can't make enough profit in the end. So, he needs to restate this when he’s writing his business plan.

On the other hand, Retailer 2, Julie can be more transparent and tell the audience why she’s pricing her products the way she does while emphasizing her target audience and wallet share.

Retail offering

Your retail offering is where do you plan to sell your products, how many stores you’ll have, and your expansion plans. The more assets you have in terms of real estate or customer database, the more you need strategies to make them work financially and strategically.

Keep in mind that, especially if you’re looking for an exit strategy or a capital investment, your expansion means that you’ll reach a wider customer base, so it’s more attractive.

The customer data that you have as a retailer is one of your most valuable assets. So if you’re going to have a referral program, subscription services, or similar, you need to include them in your business plan as well.

Management & People

Explain how and with whom you’ll run this business. Try to give the audience a better view of your people know-how, your employees' expertise, and your family's partners to run this business. You can also include your staffing requirements, their daily or weekly shift. Remember that this will also give an idea of the customer traffic you’re expecting from your store.

If you need additional staff such as an outsourced accounting team, work with a third party to deliver supplies to your store, and a 24/7 customer service experience, these should be in your plan. You have to make sure that this section is about you and how well you do or will run this business with the perfect people management skills .

Related: 12 Things to Consider Before Hiring A New Retail Employee

After you carefully listed all your assets and liabilities, you can now plan the money-making process. There are various retail math formulas and terms you need to familiarize yourself with to do the proper retail calculation . Your final plan typically includes an income statement, a balance sheet, and a cash-flow statement . It may be meaningful to have a break-even analysis or a 5-year profit and loss projection if your business suits this kind of projection.

It would be best to consider what you already have as a financial asset for your store. This is your capital investment. Especially if you are planning to include a 5-year financial plan, this asset is the core investment your business will depend on.

Retail: 15 Key Metrics (KPIs) to Measure Retail Store Performance

Income statement

The income statement is your revenue and expenses over some time. This is advised to be planned in yearly projection and be updated as frequent as necessary -typically month by month-. By doing this, you’ll be more aware of your profit and loss and increase your ability to take necessary actions before it's too late.

Balance sheet

The balance sheet is the balance between your equity and your liabilities. This is where your capital investment will sit, balanced out by the assets you own. A retail owner will always want to keep this equity weighing more on the assets side so that s/he can build a financially sustainable business.

The cash flow statement is sometimes disregarded as there are many other sheets to follow. Still, this statement is where you pay the rent, employee salaries, and supplies. It is tracked more frequently than the other two because it helps you keep track of your investment and payment timelines.

With a simple analysis, you’ll know when you’ll receive cash, so you won't feel helpless if you are cash negative for some time. You can quickly identify the gap in your flow and adjust your operations as required .

Finally, just a few notes on how you should approach your business plan:

• Make sure you have a checklist
• Just write down as you’re talking to a friend/partner and then work on the structure.
• Look at samples or download templates to guide you.
• Take your time. It should be well thought and worked on.
• Do not rush when it comes to business plans.

Hi there! If you liked this post, please feel free to share it on social media to help us reach out to more retailers like you. You can also leave a comment below and let us know if you have any questions!

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JD enjoys teaching people how to use ZoomShift to save time spent on scheduling. He’s curious, likes learning new things everyday and playing the guitar (although it’s a work in progress).

• Feb 11, 2024

How to Create a Winning Retail Business Plan

You’re about to learn how to create a winning retail business plan. You can use this plan to either start or grow your retail business . Importantly, rather than simply learning the key sections to include in your plan, you’ll see below the strategic questions that, upon answering, can help your business soar.

Your retail business plan must include 10 sections.

1. Executive Summary 2. Company Overview 3. Industry Analysis 4. Customer Analysis 5. Competitive Analysis 6. Marketing Plan 7. Operations Plan 8. Management Team 9. Financial Plan 10. Appendix

Each section is discussed below in showing you how to create a business plan for your retail business.

Elements of a Retail Business Plan

1. executive summary.

Your Executive Summary gives a recap of your entire business plan. In addition to providing an overview of your retail business, you’ll briefly describe your customers, competitors, marketing plan, operations plan, management team and financial projections.

Importantly, winning retail business plans answer two key questions both in their executive summaries and in the other sections of the plan. These 2 questions are as follows:

Why is my retail business uniquely qualified to succeed?

There are many reasons why you could be uniquely qualified to succeed; perhaps you have the perfect location, or the best product mix, or special relationship with vendors or suppliers. Maybe you have an extremely loyal customer base. Or a management team or employees who are highly skilled and motivated.

What do I hope my retail business will look like in 5 years?

If you don’t know where you’re going, unfortunately you’ll never get there. As such, a critical strategic exercise to complete in your business plan is to set goals for your retail business in 5-years’ time.

The first question you should answer is this: what would you like your revenues to be in five years? Then, think about how your business would look if you reached that goal. For example, how many employees would you have? Would your management team be the same, or would you have added or replaced current members? How many customers would you be serving each day? Would you be operating new locations? What marketing strategies would have helped you reach your revenue goals?

2. Company Overview

Your company overview section gives background information on your company. But it can and should have strategic value to your company. Here’s how. Include your key accomplishments to-date in this section of your business plan. For example, list dates and accomplishments you’ve achieved so far such as the dates when you reached a certain level of sales, or hired your Xth employee.

Not only will documenting these accomplishments motivate you and others that read the plan, but think through the strategies you employed that allowed you to accomplish these goals. And make sure you continue to use these strategies that have worked well for you in the past. Conversely, too many companies keep trying new strategies while those they’ve already used successfully go by the wayside.

3. Industry Analysis

In the Industry Analysis section of your plan, document the size of your current market and trends that are affecting it. Ideally you can access third party research on your industry that includes this data. Typically trade associations conduct and publish such research.

Importantly, make sure your growth strategies are in line with these trends. For example, if there’s a trend towards ordering online and picking up in-store, make sure you offer this option to customers.

While you want to enjoy near-term success, you also want to realize long-term growth and success. So look at your industry’s trends and forecasts to ensure both your industry and your company are moving in the same direction.

4. Customer Analysis

Your customer analysis identifies your target customers and their wants and needs. By better understanding your customers you can a) better target them with promotions, and b) make sure you offer them the right mix of products and services.

So make sure your proposed strategies are in line with your target customers, or think through ways to reach new customer segments.

5. Competitive Analysis

The competitive analysis section of your retail business plan identifies your key competitors and their strengths and weaknesses.

Think through your competitors’ strengths and see how you can combat them. LIkewise, assess their weaknesses and see how you can exploit them. The goal of this section is to figure out if you have and/or how you can build lasting competitive advantage.

6. Marketing Plan

The marketing plan includes the “4 P’s” as follows: Product, Price, Place, Promotions.

• Product : here’s where you describe your current product/service mix and what products/services you need to add to reach your desired long-term goals.
• Price : here you’ll document your pricing strategy.
• Place : Place refers to the location of your retail business. Any store expansion plans would be discussed here.
• Promotions : Your promotions section details how you will reach new customers. There are numerous ways to do this, from pay-per-click ads to print advertising to social media marketing and customer referral programs. Document the strategies that you’re currently using, those that have worked well in the past, and those you’ll employ in the future to allow you to realize your growth goals.

7. Operations Plan

In your operations plan, you must document and detail your long-term and short-term milestones.

Start by identifying and documenting your 5-year goals in terms of sales, number of employees, customers served, store openings and/or other relevant metrics.

Then you need to work backwards. Identify the key goals you need to reach in each of the next 5 years to reach your ultimate goal. Finally, you need to get even more granular for the first year. That is, document your goals for each quarter of the coming year.

For example, if you currently have a headcount of 50 and your goal is to get to 500 employees, your goals might be to add 10 employees in the first quarter, 15 employees in the second quarter, 20 employees in the third quarter, 25 employees in the fourth quarter, 80 employees in the second year, 90 employees in the third year, 100 employees in the fourth year, and 110 employees in the fifth year.

Likewise, document your plan for employee retention , as losing key employees will hinder your ability to achieve your growth objectives.

By using this process, you can truly identify and then attain your goals.

8. Management Team

In this section of your plan you’ll document your management team.

Importantly, you need to think through whether your current management team is capable of growing your business to the desired level. Think about which management team members can grow with you. Think through whether you should invest in them to improve their skill sets. Also, figure out if you need to add or replace current members. If so, write a job description of the team members you’ll need to add and the dates you’d like to bring them on.

9. Financial Plan

The financial plan section of your business plan includes an Income Statement, Balance Sheet and Cash Flow Statement. It also lists the key assumptions you’ve used in deriving these 5-year projections.

Among other things, your financial plan will identify how much money is needed to execute on your plan. Likewise it will alert you to potential cash crunches. For example, purchasing new equipment or software might help your business grow, but it may require an investment that your bank account doesn’t currently support.

If you’re looking for outside funding to grow your business, banks and equity lenders will review your financial plan to ensure they will be repaid or get an adequate return on their investment. But even if outside funding is not required, developing your financial plan is critical.

One key benefit of your financial plan and forecasts is that they allow you to assess new opportunities. For example, you should be able to tell the cash requirements and potential returns for different strategies you might pursue. Use your forecasts to select only the best ones.

Finally, your financial projections will give you goals. They serve as a financial scorecard against which you should judge actual performance. Each month and quarter, judge your actual financial performance against your forecasts. See where you’ve succeeded and where you’ve fallen short. And if you’ve fallen short, strategize regarding what you can do differently to improve your success going forward.

10. Appendix

The appendix of your plan includes any supporting information. For example management team resumes or vendor agreements could be included if they bolster arguments stated in your plan.

Creating a business plan for your retail business puts you on the path to creating competitive advantage and enjoying long-term success. It starts with simply dreaming about what you’d like the future to look like. Then, you strategize to put plans in place to ensure that vision becomes a reality.

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The Ultimate Guide to Writing a Retail Store Business Plan

When you’re starting a retail business , the first thing to do is make sure that your plan includes details about what type of store and how it will be marketed. You need all these things if you want your biz to succeed.

What is your business plan? Who are you trying to reach with this product or service? How will they afford it and what do you need for them to buy from us instead of the competition. All these questions can help answer how we should structure our sales strategy.

In this post, you’ll learn the ins and outs of creating a plan for your retail business. We’ll discuss how having one will help boost profits and walk through the steps needed to make it.

Starting a retail business is never easy, but this post can help you find the right plan. Whether you’re just starting or looking for an investment in your existing store, we’ve got some helpful tips.

All You Need to Know About a Retail business Plan

A business plan is a document that outlines the need-to-know information about how your company will operate. It’s like a roadmap for understanding what kind of growth you’re looking to see and where it might happen.

The business plan is just a guide, but it should give people an idea of the inner workings.

Have a Strategy and Goals for Your Retail Business

Many entrepreneurs indeed start their businesses without a written plan. But if you’re going to be successful, it is vital to have a well-thought-out strategy and clearly defined goals.

It’s tempting to dive right in and start working your butt off, but sometimes you need a plan. If you are opening up an establishment with lots of moving parts like retail stores , it can be challenging without serious capital.

Don’t just think about these things in your head. Write them down. It’s important to formalize the plan and put it on paper for yourself and stakeholders.

If you are looking to start a business, it is essential that you create an initial plan Click To Tweet

. There are many benefits of having one including:

To provide clarity, you need to move ahead

If you have a business plan, it can serve as your roadmap for taking your business off the ground. However, it is overwhelming to figure out which steps need more attention and implement them.

The best way to plan a business is by writing down the steps you need to take and having an idea of how you will do them. It’s much easier than constantly feeling lost or unprepared.

To explore your business idea to see if it works.

A business plan is a necessary step in the process of starting your own company Click To Tweet

. It’s often an opportunity to explore potential issues with the idea you’re hoping will succeed.

As an entrepreneur, you want to spot problems as early as possible so that if the picture doesn’t work out, then at least it doesn’t take up too much of your time. You don’t want to invest all this effort into a business idea only for it not to turn out.

To get investors for your business idea.

It’s imperative to have a formal business plan if you’re looking for funding. Creditors and investors will want the information about your idea in writing to understand it, which then helps them decide whether or not to give you money.

Writing a Retail Business Plan

Now that you know what a retail business plan is and why it’s important, let’s talk about creating one for your company. It starts with identifying the different components of an effective business plan; these include goals, marketing strategy, financial projections.

Let’s dive in.

1. Business Overview

The executive summary is a crucial part of any business plan. It gives readers an overview and helps them understand why you started the company, your goals, etc.

One of the more critical aspects of your business plan is motivating and compensating employees . It’s essential to be aware that there are many different ways in which this can happen, but here’s a list:

Business synopsis

The name of my business is _____. I’m starting a maternity apparel boutique devoted to providing stylish clothes for pregnant women and moms-to-be.

You can start your business description with something like, “You’re looking for a company that is dedicated to making sure you have the right equipment and space. We know how important it is to make sure all of our customers are satisfied.”

Luxe Maternity is a high-end maternity clothing store that caters to affluent mothers. Luxe will sell top-of-the-line, expensive clothes for wealthy pregnant women.

We are proud to announce that we will be opening the first luxury maternity boutique in Neptune, CA. We hope this store becomes a destination for wealthy moms-to-be and capture 75% of their market share.

Your purpose for the business

It’s essential to explain the purpose of your business and what you hope it will become Click To Tweet

With Luxe Maternity, for example, their mission is ‘to provide parents with innovative yet classic pieces that are chic in design while also being comfortable.'”

It can be hard to find clothes that make you feel good about yourself as a new mom. That’s why the True Motherhood line is designed for stylish moms-to-be who want clothing that makes them look and feel beautiful.

Company goals

Continue to provide high-quality products and services -Utilize various marketing strategies, such as print ads or social media posts.

• To create a store environment that makes mothers-to-be feel comfortable, beautiful, and stylish
• To capture 75% of market share by 2020
• To gain a 50% profit margin after year 1

2. Business structure

Once you’ve covered the basics, it’s time to get into more detail about your business. This section will cover:

What is your company structure and ownership? 

If you’re the owner of a company, this is where to talk about how it works.

It would help if you also mentioned your company’s legal and business structure. Are you a sole proprietor or an LLC? It doesn’t matter, but be sure to include it in your retail plan.

What is your general location? 

While you may not have set up shop yet, it’s essential to let your audience know where you plan on opening. Luxe Maternity could mention that they plan to open in an affluent part of town.

What products are you offering? 

One of the essential parts of any business is what you sell. If your store mainly sells products, make sure that it’s evident in this section and tell people why they should buy from you.

Do you plan to make them yourself, or will you buy from a supplier?

3. Market survey

Your marketing plan should identify the types of customers you want to target and who will be able to buy your products. This must include a description of their kind of people, such as their age group or gender.

When you’re on the hunt for a new position, make sure to include these details in your resume.

What is the size of the market?

Do some research on the market size. Luxe Maternity, for instance, could look into how many pregnant women there are in Neptune every year and then use that information to figure out what kind of market they’re looking at.

Who are your competitors? 

Finding other companies in the same industry is also essential. Who are they? Where do they operate? Understanding these factors will help you make your plan.

What are the trends and forecasts in the market?

It is crucial to forecast where the market will be in 5-10 years, and for this, you’ll need to research how much your current customers are worth. It would be best to look at any notable news or movements that may affect the industry.

What is the demographic information of your target audience?

To find out about the demographics of your customers, you should have a list ready that includes: -Age group -Income level -Gender.

• Annual income
• Education level
• Where they live and work

What is the psychographic information of your target audience?

When it comes to customer motivation, you need to ask yourself what motivates them. What will make customers come back? How can I help meet their needs? If you find the answers, they are great for your business plan and good strategic decisions.

4. Marketing strategy

Now let’s talk about how you’re going to get your customers. You need a marketing plan that includes:

What is your position in the market? 

Now that I’ve looked at my competition, it’s time to make a plan. So far, the competitors are all targeting small-to-medium size businesses with their products and service offerings.

Luxe Maternity is a company that specializes in high-end maternity clothing and accessories. They have created their own positioning model, which would look something like this:

What is your competitive edge?

Be clear about your store’s unique qualities and how you plan to take on competitors.

What is your branding strategy?

It’s crucial to have a clear branding strategy and style before you even start writing your content. What is the goal of this article? Who are we targeting with our message? How should they feel when reading it, listening to it, or watching it?”

What is your pricing strategy?

What are your pricing plans? Readers of the business plan want to know how much you’ll charge and what profit margin will be acceptable.

Pricing is a significant part of your strategy. What will you be selling items for? Will they all cost the same, or does it depend on what typesizeetc.? It’s not too late to talk about this.

What are your promotional tactics?

As you get ready to start your business, readers must know how they can find out about what you’re doing. So tell them where people will see and hear from you.

What are your sales process and retail experience?

You’ve heard about how we’ll get them to your store, and now it’s time for us to tell you the steps that will convert those customers. Please tell me what sort of retail experience and sales process you have in mind.

When people walk into your store, what will they see? What will you do to get them from browsing around and looking at everything with their hands firmly in their pockets?

5. Management strategy

You should also include some information about your business. Who will you hire? What is the management structure of your company going to look like?

You should discuss:

What is your organizational structure? 

This section should include a flowchart of your company’s hierarchy. You might also want to list out the organization chart, but I’m not sure how useful that would be.

A person at the top of a company is usually answerable to someone else.

Who is your management team? 

If you have a management team already in place, this section talks about the members and their backgrounds. If not, it’s for outlining roles that will be available.

What is your staffing plan? 

If you’re looking to hire managers and associates, your business must be growing. If you need a few people or more than ten hires in the next year, we can help with recruitment strategies.

It would help if you also told them about the benefits and policies you plan to offer, as well as how many people they’ll be working with.

6. Financial projections

The most important part of your retail business plan is how you’ll make money and what it will be over a specific period. It would be best if you had this outlined.

To have a successful business, you need these three things: 1. A marketable product or service that meets the needs of your target customers and generates revenue from sales 2. A comprehensive marketing plan for promoting your products and services in an appropriate way

What are your capital and startup needs? 

This section should detail how much money you need to get started and where that money will be spent.

When I need to plan what my company will do with its capital, I create an account and list out everything we will spend it on.

It’s not essential to be exact with your numbers, but they need to make sense. You should spend some time looking at complicated things like break-even analysis and forecasts.

What is your break-even analysis?

You should perform a break-even analysis to determine when your company will start making money. It’s easy; just take into account the costs and sales projections.

Try drawing a chart if you want to make the most of this article. For example:

What are your sales forecasts?

One of the most important things to do when running a business is to estimate your profits and losses over time. How much money will you make in year one? What about years two, three, four, or five?

What are your cash flow projections? 

Creating a cash flow forecast is essential for any business, so be sure to consider how much money you’ll have coming in and going out on an ongoing basis. Figure out your projected balance at the beginning of each month. Then, use that figure with your expected sales figures to calculate exactly what kind of financial situation you’re in.

There’s a lot of work that goes into starting up your own business. You’ll have to do tons of research make plenty of calculations and projections.

When you create a well-developed retail business plan, your whole company becomes more explicit, and people will be eager to invest in it.

So get to work, start mapping out your plan for success and stop being lazy.

Now that you know how to write a retail store business plan, what are you going to do?

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Retail Business Plan Template [Updated 2024]

Retail Business Plan Template

If you want to start a Retail business or expand your current Retail company, you need a business plan.

You can download our Retail business plan template (including a full, customizable financial model) to your computer here.

The following retail store business plan template gives you the key elements to include in a winning plan for your own retail business. It can be used to create a business plan for a clothing store, an electronics store, a shoe store, or any other type of retail business.

In addition to this template, conducting market research for your customer base will help you identify potential market trends and customer segments to better understand the viability of your retail company and your potential competitive advantage.

Sample Retail Business Plan

Below are links to the key sections of a successful retail business plan:

I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

Download our Retail business plan template (including a full, customizable financial model) to your computer here.

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Retail Business Plan Outline

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We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

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How to Start a Retail Business: A Step-by-Step Guide

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

If you’re thinking about starting a business in the retail industry, you’re in good company. Although local retailers don’t get the same level of attention as nationwide brands do, small retail businesses actually make up the vast majority of all U.S. retail businesses.

In fact, researchers found that small retailers (with 50 or fewer employees) made up 98.6% of all retail businesses in 2019. To break into this vibrant industry and open a store of your own, therefore, you first need to understand how to start a retail business.

To help you through the process, we’ll guide you through all the steps required to start a retail business, as well as offer additional resources to assist you on your startup journey.

How to start a retail business in 10 steps

These steps will have you running your retail business in no time. Let’s get started.

Step 1: Find your niche.

The first decision you'll need to make in order to learn how to start a retail business is figuring out your company's niche. You may already have an idea of the type of company you want to form, or you may still be grappling to figure out where to focus your retail company. To determine your niche market, we recommend:

Explore your interests and passions: Determine what you love doing or what you'll enjoy selling.

Brainstorm potential conflicts: No industry is perfect, but figuring out what obstacles or issues you could encounter in your niche will help you plan ahead and determine if an industry is a good fit for your business.

Consider profitability: At the end of the day, you want to make money from your retail business, so you'll need to find a niche that has the potential for profitability. Generally, if your niche has absolutely no competitors, it's usually a sign there's no demand, and therefore, your focus will not be profitable. Use our guide to learn more about the most profitable business ideas.

Research competitors: Once you've found a niche market using the above three steps, it's time to research your competition. Figure out how they're marketing and selling and determine what you can learn from them and how you can improve upon what they have to offer.

Retail business examples

Deciding on your niche can take a long time. It requires significant research and the passion to work within a particular market. To help you get started in identifying your niche market, here are a few retail business examples worth exploring:

Coffee shops

Apparel shops (eyewear, sports apparel, undergarments, outerwear)

Restaurants and bars (determine a theme, whether that's the cuisine, small plates, a canteen, etc.)

Game centers (board games, video games, etc.)

Monthly box subscriptions

Pet supply shop

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Step 2: Write a business plan.

We don’t doubt that you have an amazing idea for a retail store, but an idea alone isn’t enough to turn a dream into a reality. By writing a business plan, you’re providing yourself (and, potentially, future lenders and other stakeholders) a physical roadmap detailing every step you’ll take to open and run your retail business.

Therefore, when you're crafting your business plan for opening a retail store, you can start by answering essential questions about your business model:

What kinds of products are you selling?

Will you open a brick-and-mortar location, an e-commerce website , or will you take an omnichannel selling approach?

Who is your target market, and how will you market to them?

How will you set your store apart from your competition?

You’ll also need to dig into details related to your processes, answering questions such as:

Who are your vendors? How will you store your inventory?

How much staff will you need?

What will your hiring process look like?

What will your startup costs be?

How much money will you need to launch?

How long will it take for you to break even?

How long will it take for you to make a profit?

Keep in mind, however, that your preliminary business plan is exactly that—preliminary. You can always return to your retail store business plan to make changes, updates, and additions as you gain experience with starting and running your business.

Create a business budget

Along the same lines, you should also create a business budget, to the best of your ability, well before you’ve opened your doors. At this stage, you should be paying especially close attention to your startup costs.

Unfortunately, if you're wondering how to start a retail business with no money, you're going to find it's extremely difficult. Although there a variety of ways to cut costs—selling online instead of opting for a physical location, for example—there will always be a handful of costs associated with starting and launching your retail store.

This being said, in addition to standard startup costs like equipment, business insurance, and payroll, if you’re opening a brick-and-mortar retail store, you’ll have to cover some specific costs, like a down payment, potential renovations, and monthly rent and utilities for your store. You’ll also be responsible for purchasing your merchandise, shipping and delivery costs, and storing excess inventory.

And don’t forget about the other tools and software you’ll need to run your business, including a POS system, retail accounting software, and a security system to monitor shoplifting and theft.

Step 3: Register your business.

With your business plan and budget in hand, you can now move onto the next step involved in learning how to start a retail business—making it official.

Come up with a business name

If you haven’t already, you’ll first need to come up with a business name. Choose a name that reflects your business’s purpose and brand identity, allows you room to grow, and, perhaps most importantly, is actually available for use.

Once you’ve landed on your dream business name, run your moniker through a Google search to make sure another entrepreneur isn’t already doing business under that name. Then, check for trademark filings in the U.S. Patent and Trademark Office, and conduct a Secretary of State business search to make sure there isn’t another business in your area with your potential name.

Once you’ve established that your name is free and clear, you'll want to buy your domain name and create social media accounts with your name. That way, you can build a business website and launch your marketing strategy ASAP.

Determine your legal structure and register your business

Next, in order to register your business, you’ll first need to decide on your business’s legal structure. Your business structure determines how you’re taxed, the degree of legal protection you’re afforded, your business’s ownership structure, and your ability to receive business funding (in addition to allowing you to register your business in the first place).

There are lots of business entities to choose from—all of which we overview in detail in our guide to types of business entities. Additionally, we’d highly recommend consulting a business attorney or accountant to guide you through this crucial step.

Once you’ve landed on a business entity type, you can go ahead and register your business through your state’s Secretary of State website. After that, head over to the IRS' website to apply for an EIN (employer identification number) online. Your EIN is a bit like your business’s social security number, and it’ll help the government identify you for tax purposes. You might also need an EIN to apply for a business loan down the line.

Step 4: Obtain licenses, permits, and business insurance.

Some states require a general business license, while others require licenses and permits at an industry level. You may also need to acquire local permits and licenses, so consult your county or city clerk’s website for their particular requirements, too. The SBA is an excellent resource for licensing and permitting information at both the federal and local levels.

For those learning how to start a retail business, you’ll likely need to obtain multiple retail licenses related to your field, including a resale certificate, seller’s permit, and a certificate of occupancy. We also recommend partnering with a trusted business attorney during this step.

Additionally, you won't want to forget about business insurance. As a retailer, you should consider general liability insurance, a business owner’s policy, and business crime insurance; and as an employer, you’re likely required by law to carry workers comp insurance, health insurance, and unemployment insurance for your staff.

Take a look at our guide to small business insurance for more information on the types of coverage you need.

Step 5: Find a physical location and build an online store.

If your retail business will include a physical store, finding the right location is arguably the most important aspect of this process. Your location can make or break the success of your business: If you’re located in a heavily trafficked area, then your marketing efforts are practically built-in. If it’s in a tough-to-find location, or if parking is limited, then your bottom line might suffer.

The right location for your business depends largely upon who your target market is and where they hang out. If you’re opening an upscale boutique, for example, you probably want to choose a neighborhood that skews less toward students and cash-strapped millennials, and more toward people with some discretionary income to burn.

Of course, you’ll also have to keep in mind how much space you need for display areas, a back-office and break room for your staff, dressing rooms, and an inventory storage area. Your location will also depend largely upon how much room you have in your budget for renovations, store design, remodels, updates, a down payment, and your monthly rent and utility bills. That may mean opting for your second or third choice location to protect your budget.

Build an e-commerce store

Even if you always dreamed of a brick-and-mortar store with in-person transactions, we also recommend opening an online store to give your retail business as much exposure as possible.

Luckily, building and managing an online store is incredibly easy with an e-commerce platform. Here are a few recommendations to get you started:

Shopify: This platform provides an infinitely customizable, standalone store that you build and manage entirely on your own.

Squarespace or Wix: These business website platforms are simple to use and offer e-commerce functionalities.

Etsy, Amazon, or eBay: These popular marketplaces will provide you with plenty of built-in traffic and handy seller tools. On the downside, you won’t have as much control over your branding, customer relationships, or fulfillment process as you would with your own e-commerce store.

The combination of e-commerce and in-person retail is sometimes referred to as "bricks and clicks." You can use our guide to learn more about the bricks and clicks business model.

» MORE: How to start an online boutique

Step 6: Establish relationships with vendors and suppliers.

This is the next step to learning how to start a retail business—and beyond your store’s location, arguably one of the most crucial aspects of your potential success—is finding trustworthy vendors and suppliers. Your vendors might become your most valuable partners and a great vendor can present you with new merchandise, determine which products will sell best, and cut costs for you.

There are a few considerations to keep in mind as you’re searching for vendors.

Budget: Your vendors need to work within the supplier budget you’ve established.

Quality: The quality of their merchandise is crucial.

Reputation: You want to work with a supplier who is guaranteed to deliver your agreed-upon items on time and in good condition—every time you place an order.

Customer service: Remember that you’ll be working closely with your vendors, so their service team must be reliable, personable, and easy to contact in case you run into any issues.

We recommend establishing relationships with several vendors. Even if your vendor of choice is stable, reliable, and cost-efficient, you need to have a contingency plan in place—without merchandise to sell, you won’t have a business to run.

Step 7: Hire staff.

If you’ve never hired an employee before, take a look at our guide on how to hire great employees who’ll stick with you for the long run. When hiring for a retail position, make sure to interview as much for their attitude as you are for their experience. While you can train your employees to use your POS system and manage your inventory, you can’t teach them to be kinder, friendlier, or more trustworthy than they innately are.

In advance of hiring your first team member, make sure you understand your state-regulated employer requirements. Your state might require that you buy certain types of insurance for your staff. Additionally, you’ll probably need to complete some other steps, like creating a state withholding account for payroll, reporting new hires, and verifying your potential new hire’s employment eligibility as well.

Step 8: Find the right POS system.

Your POS system just might become your retail business’s best friend. It’ll certainly become your employees’ best friend—assuming you choose an intuitive, easy-to-use model, of which there are tons on the market right now.

A point of sale system combines hardware and software that enables your business to accept and process all kinds of payments. Most POS software is loaded with valuable back-end capabilities, like inventory management, employee management, CRM tools, sales reports, and vendor tracking.

If you’re opening a brick-and-mortar location, you’ll need a POS system that can accept cash, checks, contactless payments, and both chip and swipe cards. In addition, you’ll need a barcode scanner, receipt printer, and cash drawer.

For more flexibility, you might want to look into a POS system that allows on-the-go payments, too. For example, Square (and most other POS systems) has mobile card readers that plug into your phone or tablet so you can accept payments from virtually anywhere, whether that’s at a pop-up shop, craft fair, or trunk show.

Similarly, Clover also has a fully equipped, handheld POS device so you or your staff can ring up your customers from anywhere in your store.

Ultimately, you have options—a lot of them. To help you navigate the selection process, consult our guide on the best retail POS systems.

Step 9: Organize your finances.

As we mentioned earlier, it's nearly impossible to figure out how to start a retail business with no money—so, whether you have a large amount of startup capital or are operating on a tight budget, it's extremely important to organize your finances.

First, you'll want to open a business checking account . If you’re happy with your current bank, you may want to open a business bank account there. It’s logistically easier for you to maintain all your finances with the same institution. In addition, many banks offer discounts and other incentives when consumer clients open business accounts. If you want to compare your options, we recommend looking into our best business bank accounts guide.

Next, you'll want to get a business credit card . Most credit card companies allow business customers to apply for a business credit card online—which makes this step even easier than opening a business bank account.

If your business is too new to have any financial data, you can provide your personal financial information on your application. If you’re approved, you’ll receive your card in the mail in about a week or two. Use it for your business’s smaller, daily expenses, and be mindful of only using it for business-related purchases to maintain personal and business financial separation.

Get funding

Most entrepreneurs need a little (or a lot of) financial help to get their businesses off the ground. That may be especially true of retailers and brick-and-mortar business owners, who have a few extra startup costs to contend with.

Although it can be difficult to get a business loan as a startup, there are a variety of alternative options you can consider, especially as you start to run your retail store and become more established.

Finally, don’t forget to sign up for a good business accounting software solution, which will streamline, automate, and organize your business’s finances.

Step 10: Market your retail business.

At this point, you've learned the most important pieces of how to start a retail business, and now, you're ready to open your doors and get to work.

Of course, to get the word out about your business, you need to develop a small business marketing strategy, which provides you with an opportunity to get a little creative. The best marketing strategies, especially for brick-and-mortar stores, use a combination of SEO, social media, email marketing, paid online marketing strategies (if their budget allows for it), and analog marketing efforts.

At the very start of your venture, your time is best spent building a business website and creating social media accounts. Squarespace and Wix provide users with tons of customizable, professionally designed templates and built-in SEO tools. For social media, focus on creating diverse, high-quality content, posting regularly, and responding promptly to your followers’ comments and DMs—both the positive and the negative.

As a brick-and-mortar store owner, in-person marketing tactics are also important. We recommend:

Getting active in your local retailer community, networking with your fellow business owners, and participating in craft fairs and other events showcasing local businesses.

Partnering up with a local business whose target market is similar to yours and putting on an event together, or hosting pop-up shops or trunk shows in each other’s locations.

Using good sales incentives—like BOGO deals, giveaways, and free trial periods—to draw even more customers into your store.

To boost your marketing strategy, it's important to take some time to develop your brand identity. Establish your messaging, market positioning, and how your unique business can provide your customers with what they’re looking for—then create the materials to reflect those core values.

Start Your Dream Business

The bottom line

As you navigate the business formation steps, be careful not to lose sight of why you’re opening your retail business in the first place. If you remember the passion that inspired you to launch your business, you might even enjoy the finer points involved in the process—who knew finding a POS system could be so fun?

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

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Here is a free business plan sample for a retail store.

Are you eager to launch your own retail store but unsure where to start your journey?

In the content that follows, we will present to you a comprehensive sample business plan tailored for the retail industry.

As an aspiring entrepreneur, you're likely aware that a strategic business plan is a cornerstone of any successful venture, providing a clear outline of your business concept, objectives, and the tactics you'll employ to achieve them.

To streamline the creation of an effective plan, you're invited to utilize our retail business plan template. Additionally, our specialists are on hand to offer a complimentary review and refinement of your plan.

How to draft a great business plan for your retail store?

A good business plan for a retail store must be tailored to the nuances of the retail industry.

Initially, it's imperative to provide a comprehensive overview of the retail market you're entering. This includes up-to-date statistics and an analysis of emerging trends, similar to what we've outlined in our retail business plan template .

Your business plan should articulate your vision clearly. Define your target demographic (such as families, young professionals, or students), and establish your store's unique selling proposition (USP), whether it's competitive pricing, product variety, exclusive items, or customer service excellence.

Market analysis is a critical component. You need to thoroughly understand your competitors, the local market dynamics, and consumer behavior patterns.

For a retail store, it's vital to detail the range of products you will carry. Describe the categories - clothing, electronics, home goods, etc. - and explain how these selections cater to the preferences and needs of your intended customer base.

The operational plan is key. It should outline the location of your store, the layout of the shopping and inventory space, supplier relationships, and inventory management systems.

In retail, it's crucial to highlight your procurement strategies, inventory turnover rates, and loss prevention measures.

Then, delve into your marketing and sales strategies. How do you plan to attract shoppers and foster loyalty? Discuss promotional tactics, customer service policies, and potential ancillary services (like personal shopping or in-store events).

Embracing digital strategies, such as an e-commerce platform or a robust social media presence, is increasingly important in the retail sector.

The financial aspect is another cornerstone. This section should cover the initial investment, projected sales, operating expenses, and the point at which you expect to break even.

In retail, product margins can vary widely, so precise financial planning and a solid understanding of your cost structure are essential. For assistance, consider using our financial forecast for a retail store .

Compared to other business plans, a retail store's plan must pay closer attention to inventory management, customer traffic patterns, and peak shopping seasons.

A well-crafted business plan is not just a roadmap for the store owner; it's also a tool to attract investors or secure loans.

Lenders and investors are looking for a thorough market analysis, realistic financial projections, and a clear plan for day-to-day operations.

By presenting a comprehensive and substantiated business plan, you showcase your dedication and readiness to make your retail store a success.

To streamline the process and ensure you cover all necessary points, feel free to utilize our retail business plan template .

A free example of business plan for a retail store

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a retail .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market data and figures.

The retail industry is a cornerstone of the global economy with significant impact and reach.

As of recent estimates, the global retail market value stands at approximately 25 trillion dollars, with projections indicating continued growth driven by e-commerce and evolving consumer behaviors.

In the United States alone, there are over 1 million retail establishments, contributing to an annual turnover of nearly 5 trillion dollars. This underscores the retail sector's vital role in the American economy and its influence on consumer lifestyles.

These figures highlight the retail industry's expansive nature and its capacity to adapt to changing market dynamics.

The retail landscape is witnessing a transformation, influenced by technological advancements and shifting consumer expectations.

E-commerce is on the rise, with more consumers opting for the convenience of online shopping. This trend has been accelerated by the global pandemic, leading to a surge in online retail sales.

Sustainability is becoming a priority, with an increasing number of consumers preferring products that are eco-friendly and ethically sourced. Retailers are responding by incorporating sustainable practices into their operations and product selections.

Personalization is another key trend, as retailers leverage data analytics to offer tailored shopping experiences and curated product recommendations to their customers.

Omnichannel strategies are being adopted to provide a seamless shopping experience across various platforms, from brick-and-mortar stores to mobile apps and online marketplaces.

Lastly, the demand for contactless transactions and digital payment options has grown, offering convenience and safety for both consumers and retailers.

These trends are shaping the future of retail, with businesses adapting to meet the evolving needs and preferences of modern consumers.

Success Factors

Several factors contribute to the success of a retail business.

Product assortment is critical; retailers must offer a diverse range of high-quality products that cater to the needs and desires of their target market.

Customer experience is paramount, with successful retailers providing exceptional service, convenient shopping solutions, and a pleasant store atmosphere.

Location remains a key factor, as a strategically placed retail store can attract significant foot traffic and visibility.

Adaptability is also essential, as retailers must be agile in responding to market trends, economic shifts, and consumer behavior changes.

Effective supply chain management ensures that products are available when and where they are needed, minimizing stockouts and overstock situations.

Lastly, embracing digital transformation and innovative technologies can help retailers stay competitive and relevant in an increasingly digital world.

By focusing on these success factors, retailers can position themselves for growth and longevity in the dynamic retail landscape.

The Project

Project presentation.

Our retail store project is designed to cater to the increasing consumer interest in eco-friendly and sustainable products. Situated in a high-traffic shopping district or near eco-conscious communities, this retail store will offer a diverse selection of environmentally responsible goods, ranging from organic clothing and reusable household items to biodegradable personal care products and zero-waste accessories, all sourced from ethical suppliers and crafted with sustainability in mind.

The emphasis will be on the quality, durability, and environmental impact of the products to provide a responsible shopping experience.

This eco-conscious retail store aims to become a go-to destination for sustainable goods, thereby contributing to the promotion of environmentally friendly lifestyles and practices.

Value Proposition

The value proposition of our eco-friendly retail store project is centered on providing a curated selection of sustainable and ethically produced goods that cater to the needs of environmentally conscious consumers.

Our dedication to offering products that minimize ecological footprints offers a meaningful shopping experience, while contributing to the preservation of our planet.

We are committed to fostering a community where individuals can find eco-friendly alternatives to conventional products and aim to educate our customers about the importance of sustainability and conscious consumerism.

Our retail store aspires to be a cornerstone of the community, offering a tangible solution to the environmental challenges we face and improving the quality of life of our customers through responsible consumption.

Project Owner

The project owner is an entrepreneur with a strong passion for environmental conservation and sustainable living.

With a background in retail management and a deep commitment to eco-friendly practices, they are determined to create a retail store that stands out for its dedication to sustainability, ethical sourcing, and community engagement.

With a vision of inspiring change and promoting green alternatives, they are resolved to provide products that support a sustainable lifestyle while contributing to the well-being of the planet.

Their commitment to environmental stewardship and their zeal for innovative retail solutions make them the driving force behind this project, aiming to empower consumers to make choices that benefit both themselves and the environment.

The Market Study

Market segments.

The market segments for this specialized gluten-free retail store are diverse and multifaceted.

Firstly, there are individuals with gluten intolerance or celiac disease who require gluten-free products as a necessity for their health and well-being.

Additionally, there is a growing demographic of health-conscious consumers who opt for gluten-free products to support their lifestyle choices.

The market also caters to those who are exploring gluten-free options out of curiosity or for the perceived health benefits, even without a medical need.

Healthcare professionals, including dietitians and general practitioners, represent another segment as they often recommend gluten-free products to patients with sensitivities or dietary restrictions.

SWOT Analysis

A SWOT analysis of the gluten-free retail store project highlights several key factors.

Strengths include a specialized focus on gluten-free products, a knowledgeable staff trained to assist customers with dietary needs, and a robust supply chain for sourcing high-quality gluten-free goods.

Weaknesses may involve the niche market limiting the customer base and the potential for higher pricing due to the specialty nature of the products.

Opportunities can be found in the increasing awareness and popularity of gluten-free diets, the potential to expand product lines, and the ability to create a community around health and wellness.

Threats include the entry of larger retailers into the gluten-free space, price competition, and the volatility of prices for gluten-free ingredients.

Competitor Analysis

Competitor analysis in the gluten-free retail sector indicates a competitive landscape.

Direct competitors include other specialty health food stores, supermarkets with dedicated gluten-free sections, and online retailers specializing in gluten-free products.

These competitors vie for the attention of a discerning customer base that values product variety, ingredient transparency, and convenience.

Potential competitive advantages for our store include a highly curated product selection, personalized customer service, community engagement, and loyalty programs.

Understanding the competitive landscape is crucial for carving out a unique position in the market and for customer acquisition and retention.

Competitive Advantages

Our gluten-free retail store's competitive edge lies in our unwavering dedication to providing a wide array of gluten-free products that meet the needs of our customers.

We offer an extensive selection of gluten-free groceries, from staples to gourmet items, ensuring that our customers do not have to compromise on choice or quality.

Our knowledgeable staff are trained to offer guidance and support to customers, whether they are new to a gluten-free diet or seasoned gluten-free shoppers.

We are committed to transparency and education, helping our customers make informed choices and fostering a sense of community among those who shop with us.

You can also read our articles about: - how to open a retail store: a complete guide - the customer segments of a retail store - the competition study for a retail store

The Strategy

Development plan.

Our three-year development plan for the specialized gluten-free retail store is designed to be progressive and responsive to market demands.

In the first year, our goal is to establish a strong foothold in the local market by offering a diverse range of high-quality gluten-free products and exceptional customer service.

During the second year, we plan to expand our reach by opening additional locations in key shopping districts and residential areas to increase accessibility for our customers.

The third year will focus on enhancing our product line with exclusive gluten-free items and collaborating with suppliers to offer unique products. We will also explore online sales channels to broaden our market reach.

Throughout this period, we will prioritize customer satisfaction, product excellence, and innovative retail experiences to solidify our brand as a leader in the gluten-free retail sector.

Business Model Canvas

The Business Model Canvas for our gluten-free retail store is centered around serving individuals with gluten sensitivities and those who prefer gluten-free products for lifestyle reasons.

Our value proposition lies in providing a wide selection of gluten-free goods, convenience, and a knowledgeable staff to assist customers in making informed choices.

We will operate through our physical retail locations and an e-commerce platform, utilizing our key resources such as our relationships with gluten-free product suppliers and our retail expertise.

Key activities include inventory management, customer service, and community engagement.

Our revenue streams will be generated from the sales of gluten-free products, while our costs will be mainly associated with inventory procurement, store operations, and marketing initiatives.

Access a comprehensive and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on differentiation and customer engagement.

We aim to distinguish ourselves by offering an extensive range of gluten-free products and by providing a shopping environment that educates customers about the benefits of gluten-free living. Our marketing efforts will include in-store promotions, loyalty programs, and educational workshops.

We will also establish partnerships with nutritionists and health influencers to endorse our products and store.

Additionally, we will leverage social media platforms and online marketing to increase our visibility and attract a wider customer base, while emphasizing the quality and variety of our gluten-free offerings.

Risk Policy

The risk policy for our gluten-free retail store is focused on mitigating risks associated with product sourcing, inventory management, and customer satisfaction.

We will implement strict quality control measures to ensure all products meet gluten-free standards and maintain strong relationships with reputable suppliers to guarantee product availability and quality.

Regular training for staff on gluten-free products and customer service will help maintain high standards. We will also adopt a conservative financial approach to manage costs effectively.

Comprehensive insurance coverage will be in place to protect against potential liabilities. Our commitment is to provide safe, high-quality gluten-free products while ensuring a positive shopping experience for our customers.

Why Our Project is Viable

We are committed to establishing a retail store that specializes in gluten-free products, addressing the increasing demand from health-conscious consumers and those with dietary restrictions.

With our dedication to offering a wide range of products, exceptional customer service, and a focus on education and community, we believe our business is well-positioned for success in the growing gluten-free market.

We are enthusiastic about the opportunity to enhance the lives of our customers through our offerings and are prepared to adapt to market changes to achieve our objectives. We are optimistic about the future prospects of our gluten-free retail store.

You can also read our articles about: - the Business Model Canvas of a retail store - the marketing strategy for a retail store

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a retail and our financial plan for a retail .

Initial expenses for our gluten-free retail store include costs associated with leasing a retail space in a strategic location, outfitting the store with appropriate shelving and display units for gluten-free products, purchasing initial inventory from certified gluten-free suppliers, training staff on the importance of cross-contamination prevention, as well as expenses for branding and targeted marketing campaigns to attract customers with gluten sensitivities or preferences.

Our revenue assumptions are based on a thorough market analysis of the demand for gluten-free goods, taking into account the increasing number of people adopting gluten-free lifestyles for health and dietary reasons.

We expect a steady growth in sales, beginning with conservative estimates and expanding as the reputation of our gluten-free retail store strengthens in the community.

The projected income statement outlines expected revenues from the sales of gluten-free products, cost of goods sold (including inventory procurement and handling), and operating expenses (lease, marketing, staff wages, etc.).

This leads to a forecasted net profit that is essential for assessing the long-term viability of our retail business.

The projected balance sheet will display assets unique to our retail operation, such as store fixtures, initial product inventory, and liabilities like loans and projected operational costs.

It will provide a snapshot of the financial condition of our gluten-free retail store at the end of each fiscal period.

Our projected cash flow statement will detail the cash inflows from sales and outflows for expenses, helping us to predict our financial needs. This is crucial for maintaining adequate cash reserves to handle day-to-day business transactions.

The projected financing plan will enumerate the various sources of funding we intend to tap into to cover our initial costs, including potential loans or investor capital.

The working capital requirement for our gluten-free retail store will be diligently tracked to ensure we have sufficient funds to support everyday business activities, such as restocking inventory, managing accounts receivable and payable, and meeting payroll obligations.

The break-even analysis will pinpoint the sales volume required to cover all our costs, including the initial setup expenses, and begin generating profits.

It will signal the point at which our retail operation becomes financially sustainable.

Key performance indicators we will monitor include the gross margin on our gluten-free products, the current ratio to evaluate our ability to meet short-term liabilities, and the return on investment to gauge the efficiency of the capital we have invested in our retail venture.

These metrics will assist us in gauging the financial performance and overall success of our gluten-free retail store.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a retail store .

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Strategic Retail Planning Process: The Right Way To Do It

Get ready to chart a new course in the retail industry! The waters are rough, with economic uncertainty, consumer expectations shifting, and game-changing megatrends like e-commerce, sustainability, and digitalization shaking up established business models.

The traditional approach to strategic planning is no longer enough to steer you to success. But don’t get discouraged just yet! 

In this article, we'll explore why the usual approach is falling short and reveal a proven, highly effective 6-step retail strategic planning process. We’ll show you a real-world example of a strategic plan from one of the largest global retailers. 

We'll also arm you with a comprehensive retail strategic plan template to help you create and execute a winning strategy that will gain your organization a competitive advantage and unlock growth potential. 

Here’s what we’re going to cover:

Why the Traditional Approach to Strategic Planning in Retail Falls Short

• 6 Steps of Highly Effective Strategic Retail Planning  
• Retail Strategic Plan Example + Template 
• The Key to Retail Success in 2023: An Execution-Ready Strategic Plan

Today's retail market demands a different approach to strategic planning, as long-term planning cycles and spreadsheets are no longer effective. This traditional approach is disconnected from day-to-day operations and business leaders focus too much on planning and perfecting their strategies instead of executing them. As a result, their strategies are bound to fail before they even hit the ground.

Here’s why:

• Dynamic market conditions and global supply chain disruptions: The retail industry is constantly changing, making it hard to stick to a long-term plan.
• Digitalization and technology disruptions: Digital transformation requires quick action and rapid adaptation across all levels of the organization, but the traditional approach can’t break through organizational siloes and keep up with the pace of change. 
• Increased consumer expectations: With customers' expectations constantly shifting, relying on the slow and rigid approach to strategic planning can result in a market share loss. 

These factors highlight the need for a more flexible, adaptable approach to the strategic retail planning process and retail operating model. By adopting an execution-first mindset, data-driven, and flexible approach to retail strategy, retailers can accelerate their digital transformation , stay ahead of the competition and deliver profitable growth. 

📚 Recommended read: Strategy study: How Costco's Unique Business Model Resulted In Global Success

6 Steps of Highly Effective Strategic Retail Planning   

In the steps below, you’ll discover how to develop a retail strategy on a corporate level, connect the dots between strategy and day-to-day execution, and integrate fast adaptability into your retail operations. 

Let's unpack how you can get it right:

1. Start with a situational analysis

The first step of effective strategic retail planning is conducting a thorough situational analysis. This strategic analysis involves evaluating both internal and external factors that may impact your retail business.

One useful tool in this process is a SWOT analysis , which evaluates the strengths, weaknesses, opportunities, and threats of your retail business. 

The internal analysis should look closely at your company's strengths and weaknesses, while the external analysis should examine the opportunities and threats in the competitive landscape , economic conditions, industry trends, and broader market forces.

You can also take advantage of other analysis tools for a more in-depth analysis of the external environment, such as PESTLE analysis or Porter’s 5 Forces . 

💡Here's a pro tip: Even if you’re planning at a corporate level, you shouldn’t neglect your key stakeholders in this step. These people will be responsible for bringing your retail business strategy to life, so it's important to get their input. Here are some examples: 

• Your retail marketing team will tell you more about your competitors, market segmentation, and target market demographics. Plus, they should give you insight into which growth and marketing strategies are best for different target markets. 
• Your merchandise management team can give you insights into merchandise planning and pricing strategies that work best to maximize turnovers. 

On top of that, when they're a part of the process, they'll feel more invested in making your strategy a success.

📚 Recommended read: How To Effectively Co-create Strategy At Your Organization (Recap of the workshop led by Ilana Rosen, Director of Strategy at Old Navy)

2. Get insights from your consumers

Consumer-centric strategies are one of the key factors in securing a successful retail business. Did you know that companies can reduce operational costs by 10 to 25 percent as a result of improved customer experience and digital transformation? That's why it's important to get insights from your consumers.

Your goal needs to be to have a complete, 360 view of your consumer. You can start by looking at demographics. What’s your target audience? What are their backgrounds, habits, and motivations? What does their typical customer journey look like? 

By informing your retail strategy with consumer insights, you’ll be able to ground your strategy in data and set your business up for success. Let’s look at Nike , for example. They realized that a large portion of their customers were young athletes who wanted more from their gear to enhance their performance. This insight led to the creation of Nike's innovative "Dri-Fit" line, which has become a staple for athletes around the world.

By conducting a comprehensive consumer behavior analysis, you will gain a better understanding of consumer behavior and their needs. With these insights, you can then identify areas for improvement, innovation, and strategic opportunities for growth. 

📚 Recommended read: How Nike Runs The Sportswear Game

3. Develop an overarching retail strategy, set objectives, and build a roadmap

In the second step of effective strategic retail planning, you'll want to outline general business intent, formulate your overarching retail strategy and build a strategic roadmap. This includes defining your strategic priorities and key retail objectives, and determining the measures of success. 

To help you with this process, you may find it helpful to use a strategic plan template, such as this one → Retail Strategy Template by Cascade . 

To create a robust strategy and roadmap, there are several key elements that you should include:

🔎Focus areas: Outline the specific areas of the business that your strategy will focus on. For example, a focus area for a retail business might be boosting digital growth, improving customer experience in-store, expanding into new markets, elevating customer omnichannel experience, or enhancing inventory management. 

📌Key Retail Objectives: Define specific, measurable, time-bound, and achievable objectives for each strategic focus area. For example, increasing customer satisfaction by 10% in the next 12 months, or launching a new e-commerce platform within the next six months.

📈Measures of Success: This defines how the success of your strategies will be evaluated. For example, a KPI (Key Performance Indicator) for a retail business might be customer satisfaction scores, the number of active loyalty customers, market share, or online sales growth. 

📤Action Plan: Break the overall strategic plan down into smaller, short-term, and specific actions or projects you need to take to achieve your long-term objectives and prioritize the most critical initiatives. This might include launching a new mobile app, investing in a new CRM system, hiring additional staff, improving on-shelf availability, or training employees on customer service.

📅Timelines: Establish deadlines for key milestones and deliverables to ensure you stay on track and meet your objectives.

😎Owners: Identify who will be responsible for executing each aspect of the strategy. This could include anyone from your senior management or division managers. 

💰 Budget: Allocate financial resources that will be required to implement strategies and keep track of the budget spent. 

By including these key elements in your retail planning strategy and roadmap, you'll have a clear understanding of where you want to take your business and how you'll get there. The roadmap will serve as a guiding principle as you move forward with the rest of your strategic planning process and strategy execution.  

👉 Here’s how Cascade can help you in this step: 

With Cascade’s strategic planning feature , you'll have a clear, visual representation of your strategic plan and roadmap, making it easy to see how each aspect of your strategy fits together and how you're progressing toward your goals.

Say goodbye to confusing and complex spreadsheets - with Cascade, you'll have all the information you need in one place. And, the best part? It's not just a pretty picture - Cascade helps you track progress and measure success, ensuring that you're always on the right track to achieving your retail objectives.

4. Align retail operations with the overarching business strategy

Step three is all about getting your people on board! Sharing the company strategy with your teams is crucial. Not only does it give them a clear understanding of what the big picture looks like, but it also helps ensure their daily efforts are connected to corporate goals.

However, one of the key problems in the goal-setting process , especially in larger, complex, and multinational organizations, is that it can become "opaque — with clarity diminishing" as goals are passed down through the hierarchy, according to the report Reimagining Performance Management from AICPA & CIMA and the World Business Council for Sustainable Development.

With Cascade, it's easy to cascade corporate goals and make sure everyone's focused on the right strategic initiatives to keep the business moving forward and delivering on the corporate strategy. 

👉 Here’s how Cascade can help you: 

With Cascade, you can easily link strategic objectives to individual business unit plans or departmental plans, so you and your teams can see the direct connection between their initiatives and their impact on corporate goals.

Plus, it makes communication and cross-collaboration between teams a breeze, so everyone is always in sync. Say goodbye to misaligned efforts and hello to a seamless, aligned strategy execution with Cascade.

5. Time to execute your retail strategic plan!

The fifth step is all about putting your plan into action! It's time to stop just talking the talk, and start walking the walk. You've developed a fantastic retail strategy, now it's time to share it with the world (or at least, your organization). Make sure everyone understands your overarching retail business strategy and how it fits into the bigger picture. Here are some tips to help you communicate it effectively:

• Make it accessible: Don't hide your strategy in a dusty PowerPoint presentation; make sure it's available in one easily accessible place for everyone in the organization. This will help you to keep strategy relevant and alive throughout the execution phase. 
• Lead by example: As a leader, you should set the tone and lead by example. Encourage everyone to take ownership of the strategy and be proactive in its execution.
• Use different communication channels: Different people prefer different communication styles, so make sure to use a variety of channels. Ankur Gupta, Principal of the Strategic Planning Office at FedEx, suggests regular town halls and announcements from the senior leadership. Try intranet sites, regular meetings, and daily standups. Or personally visit the company’s retail stores. This will help you to build trust with store managers and frontline workers and get buy-in into what needs to be done to successfully execute your strategy.  

By following these tips, you'll be well on your way to executing your retail strategy and achieving your goals!

Cascade creates a centralized place for your strategy and is easily accessible to everyone who needs to be involved in strategy execution. Plus, you can manage your organization's strategy in a secure hub, allowing only those with permission to access sensitive information.

6. Monitor and adapt as you go

In this final step of the strategic retail planning process, it's crucial to have an effective performance management system in place to monitor progress, analyze performance, and make data-driven decisions. The goal is to make sure the retail business stays on track to achieve its objectives and to make quick adjustments along the way. 

Here’s what you should do in this step to ensure successful strategy execution: 

• Move beyond manual reporting: Many retailers rely on manual methods of compiling reports, which can be time-consuming and result in missed opportunities. To access sales performance, cost, and profitability information in real-time, it's essential to embrace automation and end-to-end visibility in the strategic retail planning process and its execution.
• Establish an effective performance management system: Regular quarterly reviews, scheduled progress reports, a rewarding system, and one-on-one syncs with key team leaders can help ensure the retail business stays on track to achieve its objectives. Cascade provides a single source of truth that reveals in real-time if goals have drifted, making it easier to make any necessary adjustments.
• Connected data sources: Connect multiple disconnected business tools in one place with Cascade’s integrations , reducing context switching and maximizing efficiency.
• Live dashboards: Get real-time visibility into your business's performance with Cascade's live dashboards . Stay ahead of the game by monitoring critical metrics regularly and making data-driven decisions with ease.

• Progress reports: Get regular updates on how your retail strategy is performing with Cascade's progress reports. Track progress, identify areas for improvement, and stay on track to achieve your objectives.

Tired of spending hours and hours putting together reports for the management board? Tedious! Let's face it, manual reporting can be a real drag.

But with Cascade, you can focus on what really matters - analyzing business performance and making data-driven decisions. So, you can impress the management board with spot-on, accurate strategy reports that show how their business is doing. 

Retail Strategic Plan Example + Template

Ready to start crafting your own execution-ready plan? To make your strategic planning process easier, we’ve created a real-world inspired strategic plan based on Costco’s, the world’s third-largest retailer, annual report. 

Here’s what Costco’s strategic plan would look like following the strategic planning model we outlined in step 2 above: 

Focus area: Efficiency 

Objective: Reduce our costs without sacrificing quality

Actions: Expanding the in-country sourcing options / Acquire and develop cloud-based software to manage logistics of big and bulky items / Decrease the Cost Of Goods Sold (COGS) by 18%

Measures: Net sales, COGS, delivery time  

Here’s a preview of Costco’s strategic plan template:

When you sign up, you'll get instant access to a template pre-filled with Costco's examples. Now, keep in mind that this template is meant to be an inspiration. We encourage you to customize the template, fill in the elements, and align it with your retail strategy.

👉 Click here to get instant access to the strategic plan template pre-filled with Costco’s examples.

The Key to Retail Success in 2023: An Execution-Ready Strategic Plan 🚀

In the fast-paced retail world, having a solid strategic plan is crucial, but it's just the first step. The real game-changer is executing that plan flawlessly. That's where Cascade comes in to revolutionize the traditional approach to strategic retail management and strategic planning. With Cascade, you can turn your vision into a tangible and actionable plan that's ready to be executed.

So what are you waiting for? Get ready to soar to new heights and connect the dots between planning and execution with Cascade.

Start today with a free forever plan or book a guided 1:1 tour with one of our Cascade in-house strategy execution experts.

Retail Strategic Planning FAQs

What is the retail mix .

The retail mix is a combination of elements that retailers use to create a unique shopping experience and meet the needs of their customers. It includes seven elements, also known as the 7 Ps of retail marketing: product, price, promotion, place, people, process, and physical evidence. By examining each of the 7 Ps and considering how they align with the overarching business strategy, retailers can create a cohesive plan for growth and successful retail positioning.

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Your toolkit for strategy success.

Retail Dogma

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RETAIL EDUCATION & TRAINING SOLUTIONS

Starting a Retail Business

The definitive guide.

This is a complete guide on how to start a retail business (online or offline)

You will learn about:

• Staring a Retail Business
• Managing Your Business
• Growing the Business
• Monitoring Performance

Here we will talk about the process of starting a retail business

We will be covering in details :

• Choosing your product line
• Choosing brand name & logo
• Choosing site location & domain
• Finding suppliers
• Building Your Team

STARTING A RETAIL BUSINESS CHECKLIST

Before we start; we’ve compiled the most important tasks involved in starting a retail business in a free checklist, to help keep you organized. 

Starting a Retail Business Checklist Sections

That tasks are categorized into the following sections:

In this guide, we are going to go through most of those tasks into more details, as well as the areas you will need to know to start and manage a retail business

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CHOOSING A PRODUCT LINE

The most important thing when starting a small retail business is defining exactly what you want your brand or business to stand for. This applies whether you will operate as a boutique or you want to go private label. 

Many times entrepreneurs start with a small product mix and then keep branching out and adding to the product assortment until they reach a point where they are almost selling everything to everyone. In fact, some big retailers even fall into this trap.

If you really want to survive & compete in today’s hyper-competitive retail landscape as a small business owner, you want to have a solid brand positioning that will attach a certain group of customers to your brand, and make them think about your products every time the need arises for the particular features you have positioned for.

The way to survive in the current retail landscape is by building brand loyalty, and for this you need a strong positioning

Product lines examples.

• Clothing & Accessories
• Electronics & Gadgets
• Toys & Baby Gear
• Home Furnishings
• Beauty & Cosmetics
• Lingerie & Loungewear
• Pet & Pet Supplies

CHOOSING A BRAND NAME & LOGO

Another thing to consider while starting a retail business is to choose a brand name that will resonate with your targeted customer demographic and reflect your product line.

It goes hand in hand with the positioning concept we discussed before. When you choose the right brand name you will make it easy for your customers to connect that name to certain products and to remember it when they need those products.

You will want to make sure your brand name is easy to read and spell and also easy to be included into a logo design. If your brand name is too long it might be difficult to make a nice logo design of that name. 

You also need to make your research to ensure your brand name doesn’t already exist and is not violating any trademarks (we included the link to the U.S database below). Furthermore; you don’t want to choose a brand name that might have negative connotations in other languages or cultures where your customers might belong to.

Things to Consider

• Name Length
• Domain Availability
• Trademarks Infringements (Click to Check)
• Negative Connocations

CHOOSING SITE LOCATION & DOMAIN FOR YOUR NEW RETAIL BUSINESS

You will find everyone in real estate saying “Location, location, location” and this is really for a reason. Your store’s location is one of the most important choices that you will make when starting a retail business. It could literally make or break your business.

The reason the location is so important is that you want to be “found” by potential customers. You can’t expect to get all your customer by referring them through your website or social media. You want a constant flow of traffic that brings you new customers everyday who haven’t heard about you before.

The biggest consideration here while choosing the location will be the rent price. The best locations will always have high rents. But the question is: Is this rent feasible? 

You will find many times that some landlords overcharge for the store because it is in a very good location. However; when you start doing your feasibility and budgeting you will find that at this rent you can never turn any profits.

On the other hand, we strongly advice against renting a location only because it has a cheap rent. You will always have fixed costs in your retail business, and if the location you get is not bringing enough revenue to cover those costs you will be losing money every month.

The other consideration when it comes to the rent is the lease terms. Make sure you consult your lawyer before you commit to a rent agreement and always have an exit clause that will allow you to end the lease after a certain lock in period, just in case your business didn’t perform as expected.

The final thing you want to consider, especially if you are starting an e-commerce business, is the domain availability of your brand name. It would be perfect if you can choose a brand name that has a .com domain available. It is not easy to find, but if your brand name is unique and creative enough (which you would want anyways) you will find it.

When it comes to store locations, you really get what you pay for

• Lease Terms
• Domain Name

FINDING SUPPLIERS

Now that you know exactly what products you want to sell, it is time to go out in the market and find suppliers and manufacturers.

Always keep in mind that your suppliers are long term business partners and will have the biggest effect on your success. When you have this in mind your approach in searching for suppliers will totally change. 

You will not be focusing solely on price or payment terms , but rather on the supplier’s capability to fulfill your business needs over time in a timely manner and with great consistency.

Your suppliers are your most important business partners

The task you have to perform here is careful due diligence . You will have to examine your suppliers’ business, their history in the market, their other customers and if possible even travel to see their manufacturing facility. 

The last thing you want is to launch a product and then face customer dissatisfaction due to quality issues. Or launch a nice product and build a customer base for it and start spending on marketing, just to find that you are not able to get replenishment from your supplier because their business cannot handle the volume.

Finding suppliers is not a cheap process. You might need to travel to attend trade shows (which we have found to be the best way to find credible suppliers) or, as mentioned before, travel to see the factories. Don’t expect to do the entire process online unless you are expecting to be extremely lucky!

If you choose to do everything online though, then we recommend taking your time and ordering samples first. Take these samples and use them and expose them to normal wear & tear conditions and see how they hold. You will find that in many times, after you use the product yourself, you will drop that supplier from your list, because the product didn’t hold well and you don’t want to associate your brand to this quality level.

BUILDING A TEAM

Once you have secured the location and found the suppliers that will make your products, you should start building your retail team during the time the store is being fit out for trading.

If you will be managing the store yourself, then you will probably only need to hire sales associates and maybe one supervisor to be there in your absence.

Read our article on being a store owner and  managing retail store operations , for an idea on your daily tasks as the store manager and what to expect.

When you are ready to expand or step out of the business, it will be time to think about hiring a store manager and adding more members to the team.

USEFUL DOWNLOADS FOR STARTING A RETAIL BUSINESSES

In addition to the checklist for new retail businesses we shared here, we also have a set of free downloads and templates for retail owners.

These include:

• Retail Business Plan Template
• 4-5-4 Retail Calendar
• Store Layout in Excel

RETAIL MANAGEMENT 101

• Foundations of Retail Management
• Key Retail Functions
• Keys to Success

Relevant Resources

• What is Retail?
• Brick & Mortar Retail vs. Online Retail
• Private Label
• How to Start a Clothing Line?
• Supplier Bargaining Power
• Branding & Positioning Course
• Retail Operations Management Course

In this chapter we will cover the process of running your retail or e-commerce business

We will be explaining in details :

• Buying & Merchandising
• Generating & Reading Reports
• Understanding Retail Kpis

BUYING & MERCHANDISING

Now that you are very close to starting a retail business and probably will start selling to customers soon, you need to place your first order of merchandise from the suppliers you have found earlier.

The process of buying starts with creating a buying budget, also know as Open-to-Buy budget . The OTB is closely connected with your sales budget or sales forecast for the first year. The whole idea is to buy enough product to be able to achieve your planned sales, so that at the end of the year you will get the planned profits.

This process is very critical to master in retail, because it will directly affect your sales as well as your cash flow. You ideally want to avoid ending up in an overstock or under-stock situation, where you either have to clear merchandise at steep discount and lose margins or not having enough products to sell and lose customers over time

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After determining this budget you will start allocating those amounts to certain products and placing your orders with the suppliers. You don’t have to place all the orders at once, but rather based on their  order lead time .

You will start  pricing  your products to ensure you are getting enough  gross margin  out of your operation to pay all your other bills.

While setting your initial price take into consideration that you will be running different promotions and discounts throughout the year, and this will reduce your final margins.

Merchandising

The first thing to do while setting up your  merchandising  system is to create a  merchandise hierarchy . This is simply creating a map with all the product categories and classes that you plan to have in your store, so that when you start ordering and receiving those products you will assign each SKU to a certain hierarchy. This is your way to organize all the different kinds of products and also to help you in reading & understanding the reports in the future.

Now after you start receiving those products, you will start merchandising them in your store. Whether online or offline, merchandising is how you allocate these products to your stores and display them to ensure their availability to the customers at all times.

Read Also:  Inventory Allocation

You will start  visually displaying  those products in your shop and ensure they are replenished properly to avoid missed sales opportunities. This process can be automated on your system, so that you always be notified when some products are running low.

Read Also:  Replenishment Systems in Retail

Despite the automation it is also important to generate your merchandise reports periodically and review them to ensure no products are running low on stocks and you haven’t been notified. It is also important for the person doing the merchandising and allocation to visit the stores from time to time. This is because reports don’t tell the full story.

Every store is unique in its space, layout and customer profile. It is essential to link all those attributes to the merchandising strategy for this particular store, and this can not be done optimally without visiting the store.

Visual Merchandising

Another term related to merchandising is visual merchandising. It refers to the visual display of products in a way that maximizes their sales and creates a nice visual story in the store.

It usually starts with deciding about the store layout and fixtures, and then displaying the products as per a  planogram . 

Tip : Read our store layout article linked above for a simple and free way to create a layout in excel.

There are different store layout models, but the most popular are:

• Forced Path Store Layout
• Grid Store Layout
• Free Flow Store Layout

GENERATING & READING REPORTS

An essential part of managing a retail business is generating and reading the different business reports. 

These reports could be 

Sales Reports

Stock Reports

• Financial Reports.

You will generate these reports periodically, i.e weekly, monthly or quarterly, based on the type of report.

Your sales reports will show you your sales performance against your budget and through your KPIs reports you will get to know why you are above or below budget. Based on these indicators you will then start tweaking your sales strategy to catch up with your budget.

The Sales KPIs for a retail business include:

• ATV: Average Transaction Value
• IPC: Items per Customer

Your stock reports will show your stock levels, the age of this stock and the sell through of the different products or collections (Sell through means how much these products sold out of the initial ordered quantity). 

Stock KPIs will include:

• Stock Aging
• Stock Cover
• Stock Obsolescence 

When you read your stock reports you will then action a plan to clear certain stocks that have low sell through, order new stocks if products have sold quicker than expected or reconsidering future buying orders for products that are not selling as expected

Your stock levels are very dynamic and keep changing based on your sales patterns. It is very important to be on top of your stock situation at all times.

• Financial Reports

Your financial reports will show a bigger picture of the business. They show how the business is performing in terms of profitability, cash flow, working capital and assets & liabilities. 

RETAIL MATH FUNDAMENTALS

• Learn the key retail metrics
• Understand connections & applications
• Download the workbook & practice

Further Reading

• Retail Financials Benchmarks

In this chapter we explain how to grow your retail or e-commerce business.

• Marketing & Branding
• Digital Presence
• Connecting Online to Offline
• Retail Expansion

MARKETING & BRANDING

Marketing is an integral part of any business and retail is no different. In fact it is even more important in retail because retailing has a direct to customer approach.

We already discussed the importance of having a defined branding strategy before starting a retail business, so you can stand out & compete in the market. Here we want to link this strategy to other aspects of retailing.

You will want to make sure that your buying and product sourcing is reflecting your brand position and what you stand for. Typically retail brands are segregated into value brands, premium brands and luxury brands .

Value brands present a good value (in terms of price level) to the customers and generally attract people who search for bargains or the lowest price in the market.

Read Also : Everyday Low Price and Off Price Retailers

Premium brands present a different proposition. They offer products at a higher price and also a better quality. Their customers usually don’t focus much on the price they are paying or wait for the sale to buy the product. Their customers concentrate more on other aspects, such as newness, design, quality, convenience…etc.

Luxury brands target a different segment in the market and offer exclusivity. It goes without saying that the quality has to be good, but what is more important for the customers is the exclusivity aspect. They don’t want to see this brand being discounted in the market and made available to everyone at lower price after they had paid a premium for.

Read Also: What is Luxury Retail?

Depending on which market segment your brand is targeting you will then create your product offering to suit this segment. By product offering we mean the features of your products as well as the price level.

This is a very important step, because, as we mentioned before, you don’t want to be everything for everyone. Also to grow your business you need to start attracting more customers from the customer segment your brand is targeting. For this you need a clear branding strategy

• Market Segment
• Branding Strategy
• Product Offering

ESTABLISHING A DIGITAL PRESENCE

If you are starting a retail business you should create a digital presence from the start.

By digital presence we mean having at least a basic website that shows your store locations and social media profiles that showcase your product offerings. At later stages you might want to establish an e-commerce platform and fulfill directly from your stores, or have a click & collect ( BOPIS ) option.

When you think about social media it is important to identify the platforms where you think your target customers will be present. You will not be able to maintain a presence on all the social media platforms, so doing a research on that will save you a lot of time and efforts.

Some product categories are great for instagram and others are better suited for Linkedin. Some products shine on Pinterest and others have more following on Snapchat.

Decide on few platforms and start executing.

You will need a domain registrar to register your domain, a hosting provider to host your website and an image editor to create artwork.

To connect the digital world with the physical one if you are running a brick & mortar , consider listing your shop on Google My Business .

This will allow you to show up in Google Maps when people search for your business or for the products you sell. After you list it they will send you a verification code to your physical location and after that you will be able to manage that profile on Google and respond to customer reviews.

It is also a good practice to optimize your website for SEO for the products you sell in the area you are operating in. You can hire a freelancer to do it for you.

• Domain & Website
• Social Media Platforms
• Google My Business

EXPANDING YOUR RETAIL BUSINESS

If your first retail location starts showing signs of success and you have the resources, it might be time to think about retail expansion.

Retail businesses are very scalable, and usually more profitable when they expand.

 This is because, as you expand, you will build on your initial success and use all the established resources that you have created (brand identity, suppliers, customer base, team,..etc) and share them with the next locations.

You can check out our comprehensive course on retail growth and expansion on all the different ways to expand a retail business.

RETAIL GROWTH & EXPANSION

• The different strategies to grow a retail business
• Market & product assortment expansion
• Business model innovation
• From Brick & Mortar to Online
• Brick & Mortar Retail vs. Online: Cost Comparison
• Customer Lifetime Value in Retail & Ecommerce
• Strategic Management Course
• Retail Growth & Expansion Course

In this chapter we will discuss monitoring your retail business performance

We will cover in details :

• Budgeting & Forecasting

FINANCIAL REPORTS

Now that you have been in business for quite some time, it is important to know how you are doing financially.

After all, the ultimate goal of any business is to maximize shareholders’ value. In order to improve the financial performance of the business over time, you have to read and act on its financial reports.

These Financial Reports include:

• P&L Statement
• Balance Sheet
• Cash Flow Statement

The balance sheet statement will show the assets & liabilities and will give a better picture on the historical performance of the business.

The Cash flow statement will show the movement of cash in & out of the business.

The ultimate goal of any business is to maximize shareholders' value​

Budgeting & forecasting.

Now that your retail business is reaching its first year, you will need to start budgeting for the next year. Budgeting for your retail store will depend on how your store has been performing this year and how much you expect it to grow next year.

The retail budgeting process is very critical because you will plan your buying and your costs based on it.

The Steps include:

• Sales Budgeting
• Cost Budgeting
• P&L Budgeting

Based on the results you are getting this year you will start forming a plan for next year. You will see where your costs have shot up for example and try to rectify this in next year’s budget. You will also assess the trend of your business and might want to increase spending in some areas, such as marketing, if you can see a good potential & opportunity.

If you plan to expand the business next year, by opening a new store location and adding some related products, this is the time you start planning for that and allocating it in your CAPEX (Capital Expenditure) budget for next year.

RETAIL BUDGETING & PLANNING

• The step by step retail budgeting process
• Set monthly targets adjusted to seasonality
• Templates download & practice exercise
• Retail Budgeting Process
• Retail Financial Statements
• P&L Management
• What is Working Capital?
• The Balance sheet Explained
• Retail Cash Flow Management

STARTING A RETAIL BUSINESS IS A JOURNEY

Starting a retail business is an exciting learning journey for the retail owner.

You will find that you are learning about all the aspects of doing business, just by working on this project.  From setup, to marketing, operations, people management, supplier relationships, and even business financials. 

You will learn as you go, and perfect the process over time.

Check out our different in-depth  retail management courses  that will teach you all the foundations to become a retail business manager.

THE PROFESSIONAL RETAIL ACADEMY (PRA) ™

• In-depth retail management courses
• Learn the best practices of the industry
• Download ready-to-use professional templates
• Get certificates of completion for each course
• One membership = Access to all courses

Bottom Line

Starting a retail business is a very holistic process that will teach you a lot about different aspects of doing business.

To learn more about retail, feel free to browse Retail Dogma, read all the articles for more in depth knowledge about the different topics and use our free online tools.

Rasha has 14+ years of retail & ecommerce experience. She has started an ecommerce business in 2008, and later joined corporate retail and worked at H&M , Bath & Body Works,   Victoria’s Secret and Landmark Group in operational and end-to-end senior management roles . She’s lived in 4 different countries, speaks 3 different languages and holds a BSc. in Pharmaceutical Sciences and an MBA in Strategic Management & Marketing.

You can follow her on Linkedin

CONNECT THE DOTS

Learn how to manage a retail business end-to-end.

We’ve put together a curriculum, specifically designed for retail owners or retail professionals who want to advance into senior management roles.

Learn how to connect the dots of the business and take the basic knowledge to the next level of application . 

Starting a Business | Templates

4 Free Retail & Online Store Business Plans

Published December 13, 2019

Published Dec 13, 2019

WRITTEN BY: Blake Stockton

This article is part of a larger series on Starting a Business .

A retail business plan can help entrepreneurs analyze their business concept and explain why it will be successful. Many banks and investors like to see companies’ strategic plans before agreeing to provide funding. All business plans for retail and online stores should showcase their products and services, financial projections, and marketing strategies.

Before starting your retail or online store, it’s important to register it as a legal entity with the state in which it’s doing business. A legal business entity would protect the business owner’s personal finances if a lawsuit were to ever occur against the business. Rocket Lawyer is an online legal service that assists small business owners with the paperwork needed for legal entity registration. Register your business with Rocket Lawyer for $99 plus state fees.

Visit Rocket Lawyer

Retail Business Plan Templates

We’ve included four retail business plan templates below and separated them into different types, including one for retail product-based storefronts, retail service-based storefronts, retail companies with a storefront and an online store, and retailers that run their business completely online. To understand each section of the business plan template better, we recommend you read our step-by-step business plan guide . All of the templates below include the necessary sections to obtaining funding from a bank or investor.

We’ve included template copies that are in both Microsoft Word and Google Docs. To save the Word document, click on your desired template’s link below. Once it downloads, click “File” within the document, then “Save As” to save the template to your computer.

To save the Google Doc, click your desired template’s link below. Copy all of the words in the document, open a new Google Doc on your account, and paste in the template. The new template will automatically save to your Google Doc account.

Product-based Retail Storefront

Word / Google Doc

Retailers with Storefront And Online Business

Service-based Retail Storefront

Online Only Retail Store

How Retail Business Plan Templates Work

These retail and online business plan templates walk you through how to create a plan for your business. They all come with questions in each section and subsection to spark creative thinking and provide direction.

It’s important to note that some businesses will have information that fits into all of the template categories. For example, a bakery can sell products in person and online in addition to providing a service with educational classes to aspiring chefs. If your business happens to have diverse revenue sources like this, choose the template that applies to how the majority of your revenue is earned. For example, if the online store will only earn 1% of overall sales, you should choose the storefront-based business plan template.

Product-based Retail Storefront Template

This template is for a retail business with a storefront that primarily sells products rather than services to customers. Typically, these types of businesses have a local marketing focus. Additionally, inventory and sales staff are important topics to discuss in the business plan. Examples that fall into this business category include clothing boutiques, food businesses, and jewelry companies―essentially, any store that buys and resells items in small quantities, not in bulk like wholesalers.

Download the product retail storefront business plan in Google Doc or Microsoft Word format. PDF isn’t available, because the Table of Contents’ page titles and numbers won’t update after you add new information to the template.

Service-based Retail Storefront Business Plan Template

The service-based retail storefront template is right for anyone who primarily provides a service to its customers. This type of business has a local marketing focus. Additionally, hiring and managing quality staff are discussed in this business plan. Examples of service-based retail storefronts include massage therapist companies, nail salons, product repair, shops, and rental-based businesses.

Download the service-based retail storefront business plan in Google Doc or Microsoft Word . PDF isn’t available because the Table of Contents’ page titles and numbers won’t update when you add new information to the template.

Business Plan for Brick-and-Mortar Retailers With Online Stores

This template is for any retail business that has a storefront and is selling a product online as well. The business plan discusses ecommerce and online marketing strategy in depth. Examples of brick-and-mortar retailers with online stores include memorabilia or comic book stores in addition to shops that sell clothing, outdoor goods, and spices.

Download the retail storefront and online business plan template in Google Doc or Microsoft Word . A PDF version isn’t available, because the page titles and numbers within the Table of Contents won’t update when you add new information to the template.

Online Retailer Business Template

The online store business plan template is for retailers that primarily sell products online. The template emphasizes ecommerce, online marketing, and shipping. It’s best for niche businesses that cannot fund a storefront, such as stores that sell artisan soaps or custom items. Dropshipping businesses will also find the template useful.

Download the online retail business plan in Google Doc or Microsoft Word . A PDF version isn’t available because the Table of Content page titles and numbers won’t update when you add new information to the template.

What All Retail Business Plans Should Include

If you’ve looked at the above templates, you may have noticed that several sections are similar on all four business plans. That’s because no matter your type of business, when writing your business plan , bankers are looking for certain sections, including the Executive Summary, Company Summary, Market & Industry Analysis, Marketing Strategy, Financial Projections, and Appendix.

Executive Summary

This section is an overview of the business plan and is typically one to two pages in length. We recommend completing the executive summary last so that you know which sections are most important to emphasize and expand upon.

It’s important to make the executive summary as persuasive and compelling as possible. Interested investors often request the executive summary first to determine if they should spend time reading the rest of the plan.

Company Summary

The company summary highlights the company’s successes if already in business or why it will be a success if you have a new business. In this section, include information about what you need to purchase to start your business and how much it will cost. Additionally, briefly discuss the company’s ownership structure and its competitive advantage, which is the one big feature that gives your business an edge over competitors.

Market & Industry Analysis

In the market and industry analysis section, make your case as to why your business will be a success. Market analysis is a deep dive into research that you can use to show that there are sufficient customers who need your business. You should research the need in your local area, especially if you’re not operating online, to help prove your business can be successful. Use software like ReferenceUSA to research for free at thousands of local libraries across the United States.

For industry analysis, you need to show evidence that the industry in which you’re starting a business is growing, not shrinking. You can use a paid service like IBIS World to pull industry data. IBIS World’s industry experts update industry forecasts and data around every four months.

The marketing section is where you outline the marketing strategy for your business. The information in this section will vary depending on the type of business you own. For example, some businesses may want to showcase the quality of their interior buildout while others expand into their online marketing strategy. You may even want to discuss the high-quality materials you’ll be creating to promote the business.

Regardless of the marketing strategies you mention, we recommend including as many visual examples as possible. You may want to include one or two visual marketing materials in this section. If you have more materials to showcase or large graphics―a menu or interior rendering―place them in the Appendix ( discussed below ).

Financial Projections

The financial projections are the most important part of any business plan. Unfortunately, they are also the most difficult for business owners to create. In the financial projection section, you should predict how much revenue and expenses will flow through the business during its first three years in operation.

Calculating financial projections can be time-consuming, especially if you have a physical location because you have to research specific costs such as construction, inventory, and utilities. Software can also be a big expense. For instance, payroll tools like Gusto , accounting software like Intuit QuickBooks , cloud-based point-of-sale (POS) systems like Vend , and so on.

Additionally, it can be difficult to predict how much each product or service line will sell month-by-month over the first three years in business. Use software like Biz Miner to obtain yearly startup financials for your industry.

To organize your financial projections, you can use a free Excel workbook from the Service Corps of Retired Executives (SCORE). In the workbook, you’ll find tabs for financial statements that need to be completed, such as the Income Statement, Balance Sheet, and Profit and Loss Statement.

The appendix is optional but recommended for a business plan. This is where you will put supporting documentation for your business. Include items like marketing materials, licenses, permits, leases, purchase agreements, and illustrations.

When to Use a Template Alternative

An alternative to the more traditional retail business plan templates above is a more modern business plan called the Business Model Canvas (BMC) . The BMC is a visual business plan that can be used in a team-building exercise and completed by upper management. Additionally, you should note that if you’re pressed for time, you can complete the BMC in under an hour. The downside of the BMC is that most banks and investors won’t accept it as a business plan.

Many business owners find that creating a business plan is a daunting task. Staring at a blank screen can be intimidating. If you need an alternative to using the templates above, consider using a business plan software to walk you step-by-step through the planning process. LivePlan is an affordable and easy-to-use business plan software that provides more than 500 business plan examples from which to learn. Get started with LivePlan for only $11.66 per month.

Visit LivePlan

Bottom Line

Every retail business owner needs to go through the exercise of creating a business plan. The process helps the owner understand the strengths and potential weaknesses of their business. Use our business plan templates along with the SCORE financial projections workbook to obtain necessary funding for your retail business. You may find yourself struggling with portions of the financial projections. If so, contact an accountant for assistance or use a business plan software.

If you’re on a tight budget and need legal advice about your business, you can contact an online legal service. Rocket Lawyer provides affordable expert legal advice to business owners. Get started with a 30-minute consultation from a Rocket Lawyer attorney for $59.99.

About the Author

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Blake Stockton

Blake Stockton is a staff writer at Fit Small Business focusing on how to start brick-and-mortar and online businesses. He is a frequent guest lecturer at several undergraduate business and MBA classes at University of North Florida . Prior to joining Fit Small Business, Blake consulted with over 700 small biz owners and assisted with starting and growing their businesses.

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The path forward for the US retail industry

Today, months after COVID-19 first hit US shores, it’s increasingly clear that most retailers won’t be able to rely on their old strategies and business models to compete effectively in the next normal. In this episode of the McKinsey on Consumer and Retail podcast, McKinsey’s Steven Begley, Becca Coggins, and Steve Noble consider how the US retail landscape has changed and what companies must do to thrive in the postpandemic world. An edited version of their conversation with McKinsey Global Publishing’s Monica Toriello follows. Subscribe to the podcast .

Monica Toriello: Hello, and thanks for joining us today. We’re now three-quarters of the way through the year 2020, and it’s been a year like no other for people and businesses all over the world. In this episode, we’ll talk about one of the industries most greatly affected by the pandemic: the retail industry. We’ll focus today’s discussion on the US retail sector, but many of the lessons and imperatives we’ll discuss apply to retailers all around the world.

Joining us to share their perspectives are three McKinsey partners who have worked extensively with retailers from every subsector, including grocery, restaurant, and fashion. They’ve each written several articles on the retail sector, which you can find on McKinsey.com. Recently, the three of them coauthored an article titled, “ The next normal in retail: Charting a path forward .” Let’s meet our guests. First, we have Steven Begley, a partner in McKinsey’s New Jersey office. Also joining us is Becca Coggins, a senior partner based in the Chicago office and a longtime leader of McKinsey’s global Retail Practice. And finally, Steve Noble is a senior partner in Minneapolis who coleads McKinsey’s global work in retail transformation.

To start, I’d like to ask each of you for a short answer to my first question. One of the things that McKinsey has been tracking and that you’ve all been writing about is the shifts in consumer behavior , which have become evident over the past few months. What’s one way that your own shopping behavior has changed during this pandemic?

Becca Coggins: Monica, I might sound like a cliché. My shopping was already very heavily online. It has accelerated that way, but, like many Americans , what I buy has shifted a fair bit. I’m a bit of an apparel junkie, but that’s taken a backseat to new hobbies, new things for the home, and things to keep the kids engaged around the house.

Steven Begley: My grocery experience has gone completely digital. And my grocery experience has actually accelerated. I live in Manhattan, and I didn’t frequent grocery stores prior to the pandemic, but now I’m constantly purchasing groceries, and I only do it online. So it’s a different experience for me.

Steve Noble: I’ll break the rule of one thing, but I’ll be brief. One, my front porch looks like a warehouse full of boxes each day, so lots of online shopping. I no longer buy pants; I buy a lot more wine instead.

The migration to e-commerce

Monica Toriello: You’ve all brought up the migration to e-commerce, which has been one of the biggest and most obvious shifts during this period. What has worked there, and what hasn’t worked? In other words, as consumers have shifted more of their spending online, what are retailers getting right? And what are they still getting wrong?

Steve Noble: I’ve been impressed with how quickly retailers have adapted to this new way consumers are shopping—ramping up online and curbside delivery. I live in Minneapolis; Hy-Vee is one of the local grocers, and they’ve always had a curbside drive-through pickup. But that capability, as you might imagine, was quickly overwhelmed. While it wasn’t pretty, I was impressed with how quickly they mobilized to create more scale. They basically cordoned off a section of the parking lot and set it up with refrigerated shipping containers. You place the order online, and you give them an indication of when you’ll be coming. They don’t give you a slot; rather, you give them a slot. You pull up, they load the groceries in the back of your vehicle, and you drive off.

It was a great experience, and I appreciated how quickly they adapted. I imagine that over time they will reimagine the look and feel of that experience. Because things, in many cases, were stood up so quickly, they weren’t done initially with, “How do you create a great customer experience ?” They were done with just, “How do you get the bare minimum in place?” Now there’s an opportunity to continue to think about how to make some of those delivery or fulfillment models better, more sustainable, and more enduring customer experiences.

Becca Coggins: It almost makes me think we’re in the foothills of what omnichannel-driven convenience will look like—and that there’ll be some big innovations that scale now that consumer expectations have been reset. That’s where we’ll start to see some more innovative models and some more interesting partnerships—as players try to think about new ways to meet those needs.

If you look at how many more consumers are using e-commerce—such as using curbside pickup and buying online and picking up in store—most of them like it and plan to stick with it after the pandemic. So you have the consumer need. And retailers have done a good job of standing up things, as Steve said, to be able to meet that need. The next challenge is figuring out how to do it as a more seamless experience—in a way that’s not temporary but that meets these emerging needs around convenience and speed, especially.

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A ‘shock to loyalty’.

Monica Toriello: Becca, you mentioned that consumers plan to stick with behaviors they tried for the first time during the pandemic and that they liked. Another shift you describe in your article is the “shock to loyalty”—a greater willingness among consumers to switch brands and retailers. As you say in your article, “The beneficiaries of this shift include big brands, which are seeing 50 percent growth during the crisis,” and private labels. “Some 80 percent of consumers who started buying private-label products during the pandemic indicate that they intend to continue doing so even after the COVID-19 crisis subsides.” A couple of questions about that. First, should we believe consumers? Will they indeed stick with big brands and private labels postpandemic? And what are the implications for retailers?

Becca Coggins: What’s interesting to us about this phenomenon is that it’s not just brand switches, it’s not just retail switches, it’s not just channel switches. It’s all of the above—to the point where three out of four Americans will change something meaningful about the way they shop, including relationships that were previously sticky and stable, like with your neighborhood grocery store, for example. Some of the examples you cited, Monica, are some of the ones that stick out. We expect these could still be dynamic—but on private label, for example, it’s a bit unsurprising, given that consumers are focused on value, and they’re buying more categories that are in essential consumption categories.

While some of these shocks to loyalty, whether it’s the shift to larger brands or the one to private labels, started out of sheer availability—“I went to the store and didn’t see the brand I typically buy, so I bought the alternative”—the reasons for the shift have started to evolve to reflect much more the shift around value and, on the retail side, where to actually get that omnichannel convenience you’re looking for. So now it’s all three of those things: availability, value, and convenience. We do tend to believe consumers. The private-label switch, for example, we’ve seen in prior recessionary periods pick up at about the same clip. Overall, the level of switching is something we haven’t seen in this era, so probably it could moderate some. But consumers are satisfied , and they’re continuing to shift some of those things.

The implications for retail are along the same lines of why consumers are switching. Are you providing available products, particularly in essential categories that are at the top of consumers’ shopping lists? Are you providing everyday value? And are you providing the type of convenience that balances consumers’ ability to get it when they need it but also in the mode that they want it—without having to navigate big crowded stores, et cetera? I think the implications are, very simply, how fast retailers can adapt to the new consumer reality, which is more focused on value  and convenience than even before the COVID-19 crisis.

Monica Toriello: The migration to e-commerce is happening at the same time as another one of the shifts that you’ve just pointed out, which is a focus on essentials and value. Talk about what that means for omnichannel pricing. Steven, in an article you wrote in February, before the pandemic, you observed that, at least in grocery, some retailers had online price-matching policies , whereas others didn’t: they had different prices online and in store. At the time, you said that the jury was out on which is the right approach. What’s your latest thinking on pricing?

Steven Begley: What we’re seeing is that retailers have had an opportunity to pull back on promotions as a result of the last couple of months because of the increased demand; consumers’ willingness to pay has been a lot higher. Fundamentally what we’re seeing, though, is at the end of the day, pricing is one of the top value drivers for why a consumer selects one retailer over another. Pricing will continue to be a core differentiator, a core pillar, in retailers’ strategies going forward. We’ll continue to see retailers experiment with the interplay between online versus offline pricing. But one thing we’re pretty confident about is that price matching will continue to be something that most or all retailers do.

Going beyond incremental thinking

Monica Toriello: Let’s talk about things that all retailers should do. In the article that the three of you coauthored, you name five critical areas for the next normal: revenue management, operating model, digital capabilities, capital investments, and M&A and partnerships. Those cover a lot of ground. Instead of elaborating on all five, I’d like each of you to pick one that you think retailers aren’t paying enough attention to or somehow not adequately addressing. Out of those five, which one are retailers neglecting or overlooking?

Steve Noble: I’ll start with revenue management. And I’d start with a perspective rooted in the financial crisis of 2008 and 2009. When we studied that crisis, we looked at what allowed some retailers to be resilient  and come through relatively strongly. One of the big drivers of resiliency and success through that period of disruption and crisis was, “Did you focus sufficiently on driving the top line and on the consumer in your business?”

Many retailers had the reaction, “We need to look first, second, and third at cost and take out every bit of cost we can, given the pressure on our business.” The retailers that were most successful certainly thought about cost—but they thought much more about, “How do we make sure we’re delivering a great customer experience? How do we make sure we’re driving the top line? How do we think through our pricing, our assortment, and our frontline sales model to deliver a great customer experience in the spirit of taking share?” If you then fast-forward to where we are today, much of the same will apply.

We’re not saying, don’t think about or take out costs where it’s prudent. But our belief is that retailers that will come through this the most successfully are those that are thinking about all the potential revenue levers  to drive their business and outcompete those they are positioned against. We of course know that some parts of retail are experiencing record growth and others are experiencing record decline, so this is not to say that everyone should be growing robustly. But it is a real time to outplay and go on the offensive relative to your competitive set—an approach that we believe will allow you to come out of this in a much better place in the long term.

Steven Begley: Monica, I’d say the five areas that we wrote about do cover, as you pointed out, a broad swath of capabilities across any retailer’s business. Now is a great time to put everything on the table and rethink it from the perspective of transformation—whether it’s finally pivoting your merchandising organization to be omnichannel and tech enabled or personalizing your customer experience to a level you’ve never seen before. Now is a good time to release those old constraints and prepare for the next normal.

That said, on the M&A point in particular, we tend to see a lot of M&A and partnership activity anytime an industry is disrupted, and we’re certainly in one of those times right now. We expect to see a lot of the traditional consolidation plays that you typically see: optimizing for COGS [cost of goods sold] and SG&A [selling, general, and administrative] opportunities. But there’s also a real uptick in channel expansion and making M&A or partnership plays  that allow retailers to buy into new capabilities.

A good example of this would be in the fulfillment value chain. It’ll be much easier and much more practical for folks to buy into some of these technologies—like microfulfillment, for example—versus trying to build them themselves. The same argument could be made for commercial analytics. For a lot of these advanced analytics algorithms that drive pricing and promotional decisions, it’s going to be much easier and much more efficient from a capital standpoint to buy these capabilities and embed them in the organization versus trying to build them from scratch. I do think we’ll see quite a bit of M&A and partnership activity, particularly on the capability-building front.

Becca Coggins: There is some good news, actually, on operating model, and I would start there. Many executives we talked to are, frankly, pleasantly surprised at how quickly and effectively their companies were able to pivot in the face of the biggest exogenous shock most of us will have seen in our careers. One of the examples I find inspiring is Best Buy. They stood up curbside pickup, when all of their stores were closed, in 48 hours nationwide. That process, for a retailer of that size and scale, would typically take several months of piloting to stand up and get the kinks out. But they had a high-quality, effective, customer-friendly solution available in a weekend.

The challenge side of that, and a place we think retailers need to be focused and introspective, is how to redesign the operating model to sustainably deliver these types of outcomes. That’s true for speed, it’s true for efficiency, and it’s likely true for ensuring that the operating model is delivering on what we’ve already described as new or accelerated consumer preferences and behaviors. Have you sustainably redesigned for speed  and for omnichannel and for efficiency so you can deliver the best value to your customers?

Steve Noble: I might just add a broader point that sits a level above the five specific topics we’re talking about. In retail, prior to six months ago, the mindset of most retail executives would be, “if I have a business that’s growing at a 2 percent same-store comp rate, and I can get that to 3 percent, I’m feeling pretty good. If my margin is 4.5 percent, and I can get that to 5 percent, I’m feeling pretty good.” The notion of the industry is that it’s a low-growth, low-margin business in general. That tends to foster incremental-type thinking: “I don’t need to get a big bump to actually feel pretty good about my performance.”

If you look at where things are now, what may have been a 2 percent or 3 percent comp-growth business is now up 20 percent or maybe down 20 percent. Likewise, margins are up and down dramatically. It is a good forcing function to break the mold of incremental thinking and rethink more fundamentally how you want to reach your customer. From stores versus online versus combined channels, how do you want to think about technology as a way to reimagine the customer experience and the labor and service model that you might be delivering? The amount of disruption happening right now does create some space to think pretty big and bold in a way that just wasn’t quite as typical of retail historically.

The battle for talent

Monica Toriello:  These areas that you’ve described all sound like they require new capabilities, especially in tech and digital and analytics—which leads me to a question about talent. Steven, again, in your February article, you say, “Digital talent may be the single-most-important determinant of a company’s likelihood to succeed in the grocery market in the next few years.” And that’s probably even truer now, right? You had offered up some steps for retailers to take, such as hiring a chief digital officer, rethinking location strategies, and looking beyond brand-name universities. But can you talk about the battle for talent today and what retailers can do to become attractive employers for the kinds of talent they need?

Steven Begley: The battle for talent  is real. And retail is not necessarily a sector that folks coming from data-science backgrounds and technology backgrounds would gravitate toward first. That said, we’re seeing the disruption play out in a space where we’re at just the beginning of the acceleration of many of the trends that we’ve talked about, so in terms of a sector that is primed for impact, retail is potentially the biggest one out there. What that means for retailers is, they need to be out in front of these populations of technologists and data scientists and statisticians and others, making the case for why retail is such an exciting place to be right now. I think all of us on this podcast would agree that it is.

We’ve seen a number of retailers shifting their digital businesses to more urban environments, trying to change their formats, and even changing the physical look and feel of their office structures to attract this type of talent. I think we’ll see more of that and a continued pitch to the industry, so to speak, on why retail is such a great place to be.

Becca Coggins: Now is the time for retailers to get aggressive about winning the war for this talent. We’re seeing, and will continue to see, a displacement of digital talent and analytics talent, certainly within the industry, where there’s been momentum versus decline, but also within adjacent industries. You can imagine a pretty big influx of talent—analytical talent, especially—from sectors like travel and hospitality into retail, as well as across different subsectors of retail.

Steve Noble: I agree. The war for talent is real, and now is an important time to play it aggressively. It begs the question, what allows one retailer to differentiate itself from the next in terms of winning that war? Certainly, part of it is whether they are investing in things that are exciting, et cetera. But maybe more than ever, there’s also a chance to see what a company’s “DNA” is and what its values are.

The nature of the crisis we’re in allows you to understand what different retailers think about caring for their people  from a health-and-safety point of view. What do they think about creating flexibility for a workforce that may have kids schooling from home or family members who need to be cared for at home? What do they think about diversity and inclusion ? There are a lot of different markers that we’re seeing more acutely now that allow you to stare into the soul of the company  a little bit. That will be probably as big a marker of which businesses win the war for talent as job descriptions and capabilities being built. Not to say those aren’t important, but I do think the balance between those is probably different than it was six months ago as well.

Becca Coggins: Interestingly, customers are starting to pay a lot more attention to those same attributes: how a company treats its employees, what kind of diversity and inclusion policies they have, and how that shows up to the market. We’ll start to see the whole ecosystem focus more on those things.

Steven Begley: One industry-wide example is that Eightfold AI and FMI, an industry association, came together to create something called the “Talent Exchange,” which we supported. It essentially matched retailers that had employees who needed jobs with those that had opportunities for them. And when the COVID-19 crisis first hit in March and early April, it was impressive to see the speed at which those organizations came together to create the Talent Exchange  and the speed at which retailers signed up to become a part of it. Companies like Macy’s, Walmart, and United Airlines quickly came to the table to put opportunities into the exchange and also to create opportunities on the exchange. I thought that was a great example of the industry coming together quickly to do something good for the community.

Monica Toriello: It’s been a tough year for many retailers, and it could be a long road to recovery. Last question: If a retail CEO says to you, “I want my company to thrive in the next normal. Give me your single-most-important piece of advice,” what would you say?

Steven Begley:  Chart out what your customers’ demands are going to be three years from now, five years from now. Create that vision, get your organization aligned on it, and work back from there to figure out the costs, the implications, and the investments you need to make. Focus on who that customer is going to be, and plan from there.

Becca Coggins: I think the same thing. Follow the customer. Understand what you can do distinctively for them, and orient your business to be able to do that.

Steve Noble: Given the uncertainty and volatility in retail, you need to plan in short cycles: what’s going to happen next week, next month, next quarter. But don’t forget to also plan for two or three years out. How does your business look fundamentally different on the backside of this than it did prior to the pandemic, or even now? So it’s that balance of being agile in the short term but also putting real thought into what comes out on the back end so you don’t end up with an answer two years from now that’s the amalgamation of a set of small choices. Instead, it’s an intentional view of creating a much better and different business.

Monica Toriello: Great advice. Thanks for spending time with us today, and thanks to all our listeners. Join us again in a few weeks for the next episode of the McKinsey on Consumer and Retail podcast .

Steven Begley is a partner in McKinsey’s New Jersey office, Becca Coggins is a senior partner in the Chicago office, and Steve Noble is a senior partner in the Minneapolis office. Monica Toriello , a member of McKinsey Global Publishing, is based in the New York office.

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The next normal in retail: Charting a path forward

The next normal: Retail M&A and partnerships after COVID-19

What matters now in the consumer sector

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1.15: Introduction to Strategic Planning in Retail Management

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What you’ll learn to do: Explain the concept of strategic planning within the retail management decision process

Even the best laid out plans can fail with the absence of a well defined roadmap.  Strategy is a vital component of any retail organization for several key reasons.  First, it allows you to understand your company as well as your history, your company’s history, and your overall industry.  A key component of strategy is to write them down and incorporate them into the policy, mission statement, and vision of the company.  You might have heard the phrase:  “The best-laid plans of mice and men often go awry.”  However, when things go awry the company can return to the initial strategy of the gap they are trying to fulfill within the marketplace.  This allows them to understand the competitive advantage they have in the industry as well.  In addition, it would allow them to understand the weaknesses and strengths they possess that would hinder or help growth within the organization.  Lastly, it would also help them focus on whether or not they are placing efforts and resources on those areas that will drive productivity and profitability.

Before we begin let’s take a look at Tesco, profit wise it is the third largest retailer, and how retail strategy benefits them.  Imagine the scope of a business with stores in seven countries.  Why is strategy imperative in a business this large?  We will address these questions in our next few modules.

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• Tesco's Sir Terry Leahy Talks Retail Strategy. Authored by : TheStreet: Investing Strategies. Located at : https://youtu.be/puFkfMcJW-Y . License : All Rights Reserved . License Terms : Standard YouTube License
• Introduction to Strategic Planning in Retail Management. Provided by : Lumen Learning. License : CC BY: Attribution

Retail Business Plan Executive Summary

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Matthew Hudson is the author of three books on retail sales and has nearly three decades of experience in the industry.

One of the most important aspects of any small business is to have a well-thought-out, strategic business plan. In my retail consulting , I find that less than 10% of independent retailers have an actual business plan. And those that do, it's because the bank required them to write one to get a loan. 

It's no wonder over half of all small businesses and retailers fail within the first three years—they have no plan. Sure, they have an idea and it might even be a great idea. And they have passion and they have the drive, but lacking a written plan, they have no map. Just like any destination, you need a road map to get there. In today's technology-driven society, we have become people of shorthand and cutting corners. We devalue the idea of a business plan; it takes too much time to write and develop and we want to get started NOW. 

The executive summary of a business plan is the "1-pager" of your idea. It challenges you to articulate your vision into one or two pages. If it takes 10,000 words to explain your vision for a retail store, it will never work. If it can be distilled eloquently in a page, then it has a chance. We call this page, the executive summary of the business plan. 

The executive summary features the highlights of the entire business plan. It grabs the reader's attention, explains who and what this business is all about and why he or she should continue reading. Just like the headline in an advertisement, the summary needs to make the reader desire to know more. 

What to Include:

When writing the executive summary, be sure to include the following:

• Business name and location
• Business concept
• The purpose of the business plan
• How and what products/services you plan to sell
• Projected sales and profits
• Who will operate the business
• What need you are trying to fill in the marketplace or What problem you are trying to solve for customers
• Any fact or news you don't want overlooked

Remember that this is a summary so be sure to offer a synopsis of each section of your business plan. However, just like the cover letter of a resume, it could be the only part of your plan ever read -so make sure you've included the most important points. Write to engage the reader and keep the tone positive and upbeat, but not lofty. It needs to be realistic. The executive summary should be no more than one or two pages. Remember, if you cannot attract the reader's attention in that amount of words, then you will have a bigger problem attracting the customer's attention.

After you have written your executive summary, share it with some friends. See if they can garner your vision from reading. Do they have a ton of questions? Do they have a lot of doubt? It may not be your vision, but your ability to articulate it. 

While it appears at the beginning of the business plan, it is recommended to write this part last. Spend your time agonizing over the idea, the strategy, and the details and then write the summary. It will help you craft a more compelling vision. 

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Retail Business Plan

The retail industry paves the way for an exciting way of life for millions of people across the world – providing goods and services that you and I need including food, home furnishings, medical supplies, electronic items, skilled labour etc., to name a few. Most new entrepreneurs dream of owning a small or large retail store; however, it is more important that you understand what you are in for. Retail business entrepreneurs, as in any business, should be willing to risk capital and invest time and hence make a living by offering customers something key to their daily needs. Consumers today have a plethora of options with an overwhelming sense of luxury and well-being. However, you should always keep an eye out for unexpected declines in demand due to market crashes or slowing economy which could result in curb buying behaviour of the consumers.

You may believe that your business has a distinct concept and is better than any other competitors, but are you sure about how you would launch your business into the market and satisfy the expectations of your customers? How would you drive your unique propositions to the target market? Therefore, one of the most important tasks that any entrepreneur who wishes to start a retail business should do is to create a business plan. Curating a business plan is crucial as it gives you a comprehensive one-stop view of your business and proves to you and others involved in your business idea would work or not work out in the target market and what needs to be modified.

What is a Retail Business Plan?

A business plan is a one-stop guide for your business and details all aspects of your business including what you would sell, how your business would be structured, what is your unique proposition, your target market and your financial plan. You can use your retail business plan as a roadmap that presents the growth plan of the business, its short-term and long-term goals, and how it plans to accomplish these.

The essential parts of a retail business plan include the following:

1. Executive Summary

This section offers the synopsis of your business with a description of all the key components of your business. This is where you capture the reader’s interest in your business.

2. Business Analysis

This section offers a description of the goods and services your business offers in the market, legal structure, location, target market, target customers and key competitors in the market.

3. Marketing Strategy

This section describes your key finding and analysis on your target market and customers, how you plan to penetrate your market, brand position and strategy, marketing plan etc.

4. Products and Services

This section describes what products or services you plan to provide, the supply chain network, how you plan to transport the goods or services offered, information about vendors etc.

5. Management Plan

This part includes details about your human resources, skills that you would require, explains how the store intends to be staffed etc.

6. Financial Plan

This part analyses and details the business profitability model and financial plan. It includes the cash-flow statements, income-expenditure sheet etc.

Importance of a Retail Business Plan

Apart from being a critical document for securing funding or loan from investors or banks, there are many other reasons for writing a business plan in the early stage of your business. Curating a business plan for most entrepreneurs is a splendid opportunity to take a step back and evaluate your business idea and vision, research it, understand your target market and customers and also understand the scope and strategy of your business model. Here we put down a list of reasons why you should sit down to curate a business plan for the success of your business:

1. Validate Target market and Customer Analysis

Before you take your retail business off the ground, it is imperative to get to know the playground you are in. This requires a deep look into your retail industry, competition, and geography. Defining your target market and drawing out the preferences, tastes and behaviour of your target customers enable you to see who your audience is and how you can market your products/services to them. All these details would need to be chalked out in the retail business plan so that investors would have a full overview of what your business is and where exactly it places you in the large retail market.

2. SWOT Analysis

This takes a shot at the strengths, weaknesses, threats, opportunities your brand can capitalize on and even help identify threats from nearby competitors. SWOT analysis in your business plan acts as a reference to isolate your strengths and weaknesses when making crucial decisions and enables you to stand out from your competitors.

3. Set Milestones

Writing a business plan ensures you layout milestones to shoot for in the short, mid, and long term. It defines your plan of action before you jump into setting impulsive goals at the spur of the moment. Defining your goals also ensures you conduct your business with greater agility and identify any changes you may need to make to accomplish these goals.

4. Organize Resources and Skills

Writing this section in your business plan helps you realize how feasible it is to open a retail store, hire required staff, what skills you would need for daily functioning and dive into operating costs. The business plan will serve as a primary guide to structuring your resource management and allocating staff for your retail business core processes. You will also need to chalk out your hiring processes? How do you plan to recruit staff? What are the key skills you would need to look for? What is the responsibility given for each role?

5. Validate your Financial Plan

Planning out your finances and charting them out in your business plan is one of the most crucial functions of this document if you are playing for a loan or looking into bringing on investors. A business budget is what every lender or investor would take a deep look at. You will need to detail out every nook and corner of your expenditure from our budget from insurance, rent, the expense for machinery, to your own salary. Defining your break-even analysis in your business plan at this stage, allows you to refer in the future to understand if your business is running on profits as planned. Your financial plan will include all essential documents that will help investors assess for themselves if you would be able to pay back your loan.

How YRC is helping retailers to build a sustainable business plan?

Once you are set on taking the bumpy road to grow your retail business into a huge success, your business plan would become your closest ally. If you would like to have a clearer perception of the path towards success but are unsure of how to achieve it, YRC can help guide you through the process. YRC experts shall validate your business vision and devise the critical pathways. YRC has helped bring out the best suited viable business models to many retail clients by reshaping how they look at their business. The experts at YRC work with the client and their partners in the planning stage to establish the necessary research to understand the trends affecting your business under the current market condition to lay the groundwork for and improve the potential for success.

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Process automation.

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

• Cataloguing your products
• Cataloguing your images
• Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
• Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

• How many cities or countries you wish to sell in?
• Where should your Warehouse be located?
• Should you have one warehouse in each country or city?
• Should you be having your own delivery team in your base city?
• Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
• How should I manage the logistics if my goods are coming from different countries?
• How should the goods be stored and barcoded?
• How much space do I require for warehouse?
• I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

• In-house Design Team
• Freelance Designers
• Outsourced Design Team
• Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.

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