The Retail Start-Up Book

Successfully Plan, Launch and Grow a Business

Rowland Gee, Danny Sloan, Graham Symes

• Publisher: Kogan Page
• Year: 2019
• Print ISBN: 9780749484729
• eBook ISBN: 9780749484736
• Edition: 1
• Topic: Business
• Subtopic: Digital Marketing
• Index: Business

The retail market in the UK is worth more than £400 billion annually and employs over 3 million workers, while in the US 29 million people create over USD $4 trillion of revenue through the industry. Despite the challenge to establish stores and big-box retailers, there's a rapid increase in the number of retail start-ups and consistent growth in the independent sector. From beard shops and barbers, through cafes and coffee shops, to 'retailment' concept stores and boutique consumer-focused experiences, the specialist retail sector is booming. The Retail Start-Up Book provides clear guidance and advice on how to develop a winning retail strategy that seamlessly merges online and offline tactics. Introducing the science of shopping and how to understand customer behaviours and needs, it explores the essential steps of developing a business plan, marketing and promoting a business and advising on buying and visual merchandising. Building on years of retail experience nationally and internationally, in large groups and with independent retailers, The Retail Start-Up Book meticulously provide invaluable practical insights to help new retailers hit the floor running, or more established organizations grow their business and nurture their profits.

Part one

Getting to Grips with Retail

1. 01 The issues facing the UK retail trade today

01

The issues facing the UK retail trade today

Key points

• Financial statistics
• The online phenomenon
• Start-ups statistics and business size definitions
• VAT and the start-up
• Point of Consumption (POC) tax
• Retail space
• Household spending per head
• Charity shops

There are many factors to consider in the retail industry today, and in this chapter we will introduce some of the focus points you – as an early stage start-up retailer – should begin to gain a thorough understanding of. Looking first at statistics and trends for start-ups, we will also cover some of the biggest changes in the industry, including the rise of online retailing and what that means for retailers, the changing expectations around leasing arrangements for retailers who are considering opening a physical store, changing spending within the household and why you should be aware that charity shops account for a significant part of the retail landscape. We focus on retail sales that exclude food and fuel, as do our charts, although it should be noted that some of the UK’s largest food retailers now stock products other than food. Sales of food, however, accounts for more than 85 per cent of the UK’s largest food retailers’ turnover.

Financial statistics

In the UK, 10 per cent of the working population, amounting to 3.2 million people, work in the retail industry either online or in bricks-and-mortar stores. Some 10 per cent of the UK’s gross domestic product (GDP) is spent on retail. Of the UK’s 5.7 million private sector businesses (non-government run), 10 per cent operate in the retail space. That’s 570,000 businesses, of which 430,000 (or 76 per cent) are sole traders, half of which are registered for VAT.

Looking at a 12-month analysis of retail sales shows that in 2017 the amount of money spent in the retail industry (excluding fuel) increased by 4.7 per cent to approximately £366 billion, when compared with the previous year’s £350 billion. Also in 2017, online-only sales increased at a rapid rate, by 15.9 per cent compared to the growth in sales within stores by 2.3 per cent from the previous year. Despite the stronger online presence, consumers spent most of their money in shops and stores. The majority of online spending was done within non-store retail.

Figure 1.1 12-month analysis (excluding food and fuel) of UK retail sales £bn by sector breakdown, 2018

Source https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/previousReleases

The vertical axis shows the retail sales depicting the 12-month analysis (excluding food and fuel) in the U.K. ranging from 0 to 50 in increments of 5 and the horizontal axis shows different sectors.

Details of the retail sales in U.K. as a percentage of total sales excluding food and fuel are as follows:

1. Online as a percentage: 31 percent
2. Clothing and shoes: 47 percent
3. Gifts and variety: 47 percent
4. Home: 32.3 percent
5. Athleisure: 9.6 percent
6. Watches and jewellery: 5.5 percent
7. IT and computers: 5 percent
8. Flowers/plants/gardens: 4.8 percent
9. Books and magazines: 3.9 percent

Pharmaceuticals & beauty: 3.5 percent

1. Charity shops: 2.2 percent

Figure 1.2 Five-year analysis (excluding food and fuel) of UK retail sales £bn by percentage growth

Source https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/previousReleases

The vertical axis shows retail sales as percentage growth in the U.K. over 5 years by sector, depicting the 12-month analysis (excluding food and fuel) ranging from negative 15 to 30 in increments of 5 and the horizontal axis shows different sectors.

Details of the percentage growth over 5 years in the 12-month analysis are as follows:

1. All: 17 percent
2. Clothing and shoes: 11 percent
3. Gifts and variety: 16 percent
4. H...

Table of contents

• Introduction
• Part One Getting to Grips with Retail
• 01 The issues facing the UK retail trade today
• Part Two Creating Your Retail Marketing Plan
• 02 Analysing and positioning your retail business in the existing market
• 03 Generating a powerful SWOT analysis for your retail business
• 04 Planning your retail marketing strategy
• 05 Building your retail marketing mix
• 06 Winning in retail – know your market, know your customer
• 07 Understanding the basic principles of shopping
• 08 Attracting and retaining customers online, using on-brand content and social media
• Part Three Effective Finance Planning and Control
• 09 How to kickstart your retail business
• 10 Generating a results-driven business plan
• 11 A straightforward guide to sales, stock and profit
• 12 Selection and management of retail systems and controls
• Part Four Buying and Visual Merchandising
• 13 Step one to procurement and merchandising: Understand your business and the marketplace you will be entering
• 14 Efficient buying techniques to make money
• 15 Controlling and measuring product performance and establishing KPIs
• 16 Building and maintaining relationships in retail for long-term returns
• 17 Understanding customers’ behaviour and information overload: The need to make the product focused, visually clear and correctly price-positioned
• 18 Maximizing customer feedback and the visual experience
• 19 Visual merchandising: Managing space performance, layout and add-on selling to encourage purchase
• 20 Creating your global signpost through online merchandising
• Part Five Challenges for bricks-and-mortar retailers
• 21 Understanding your lease – and how local authorities can benefit you
• Part Six How Good Should Become Sensational
• 22 Why good today is not good enough in the current retail trade
• Conclusion: Your journey
• Glossary
• Appendix
• Index