Retail has arrived. Well for me it arrived 10 years ago from when my battles to not only keep it just profitable but cash profitable has been an ongoing challenge. Here are my takes and you could call them learning by practice….
A Lean Startup Model works. For me the ongoing mantra is customer discovery, validation and the consolidation cycle. The best way forward is to choose a customer target group that is active on the Internet and customize your retail model for them. Tempt them, interest them, incentivize them and validate your model. Then, think about new customers. First the old ones then the new.
Traditional Retail understanding helps run Internet Retail better. Now whoever thought retail on internet is not about actually running a shop and being a shopkeeper. Frankly, we have learnt that Inventory management and Shop floor metrics which play a key role in traditional retail formats still apply to the Internet Retail model. It is only about understanding what those metrics are. If it is revenue per sq. ft. in Retail then it is revenue per category / page in Internet Models.
Demand Aggregation before Demand Generation. Know your customer an old adage. We have met success when we have understood our customers thoroughly. Understanding what their needs are, is important than what kind of customers you want coming online. You could focus on converting offline customers coming online and buying rather than investing monies creating demand from new market segments or target groups.
Metrics play a key part in making it profitable. No metrics, no data, no bankable way forward. Focus on metrics is especially easy, given that web analytical tools are standard now and the features they offer help us collect a lot of data that could be converted into dashboards to track and measure oneself. Here is my choice set for retail internet – – Gross Profit (Revenue – Cost of Acquisition) per customer; Customer Retention (Coversion Rate, Retained and Attrition Rate); Inventory to Sales Ratio.
All the best and speed up your journey to becoming the best shopkeeper on the web…