Rieker
How to open a shoe store and calculate everything. Seven mistakes when opening a store.
26.08.2013 70228

How to open a shoe store and calculate everything. Seven mistakes when opening a store.

Sometimes it seems that opening a shoe store is not so difficult: you just have to choose a suitable room, buy an assortment and hire sellers. However, this seemingly simple scheme has a lot of nuances, ignorance of which will sink your business ship in the first voyage. Julia Veshnyakova, General Director of the Academy of Retail Technologies, tells about the main mistakes that novice entrepreneurs often make before opening a store.

Mistake No. 1: A place for a store is evaluated without specific criteria. Everyone understands that for the success of the store, the place must be “good”. However, sometimes this quality is determined intuitively, without specific indicators and criteria. This approach creates a big risk for making a mistake, as a result of which the store will not be sufficiently visited. Remember that specific quality criteria should be used to evaluate a place, and for each individual store concept these criteria and their hierarchy of importance will be different. When developing such a list of criteria, be guided by the characteristics of your target audience, the situation of consumption of the assortment of your store and other important elements of the concept of a future outlet. Do not forget to take into account other indicators as well (see “List of parameters that must be taken into account before launching a new store”)

Mistake # 2: Customer flow characteristics do not match the concept of your store. If you rate a store location as good simply because it is located in a very walkable shopping center or on a busy street, it is likely that the quality of the customers does not match your concept. For example, you sell fashionable youth shoes on a business street with office centers, or offer expensive designer shoes in the area where not very wealthy people live and work. Suppose that in these places the number of people passing by your store will be large, but the proportion of your potential buyers among them can be very small. It turns out that you pay a high rent for the number of potential buyers who are not really those. To evaluate the quality of the customer flow, analyze your area and environment using the “List of parameters” given in this article.

Mistake # 3: It’s hard to get into the store or not easy to spot. It happens that the store is in the “right place”, but sales in it will not please the owner. One of the reasons for this is the inaccessibility or invisibility of the outlet. For example, in the case of a separate building, the barrier will be the entrance from the side of the building, and in the case of a shopping center, the third or ground floor. If your potential buyers drive, it is worthwhile to provide a parking place and evaluate how convenient it is to get to the store from the nearest highway: forty minutes through traffic jams before a turn and twenty minutes - the desire to get into your store from any motorist will be repelled. Also, the buyer should not be confused by the appearance of the store, more reminiscent of an office building or a bank than a mecca of fashionable shoes. All these obstacles need to be objectively assessed in advance so as not to waste money on promoting the store.

Mistake No. 4: The quality of the retail space does not allow providing sufficient comfort to customers. For example, there is not enough lighting in the room, there is no ventilation or air conditioning in the basement or in the one that faces the south side. Due to the lack of good ventilation in the room, it smells of food from neighboring establishments or from the utility rooms, where the staff warms up lunch. When deciding on a lease, entrepreneurs often do not pay attention to these factors, thinking that the presence of a large flow of people will outweigh all these "insignificant" disadvantages. However, this is not always the case: for a business to succeed, customers must not only go to the store, but also spend time in it - this is the only way they can make a purchase. It is noticed that in a stuffy, dark and uncomfortable trading room, where there is not enough oxygen in the air, the conversion rate seriously drops. And it’s hard for sellers to work in such conditions, so motivation in such cases doesn’t help much.

Mistake No. 5: There is no shop window at the commercial premises. Retail business experts have long appreciated the enormous impact of a well-designed storefront on the quantity and quality of customer flow. That is why well-known brands offering a franchise put forward a storefront in a potential store as one of the prerequisites. A showcase is the main tool for promoting a store and, very importantly, a free platform for your advertising. Do not deprive yourself of this additional opportunity.

Mistake # 6: The profitability of the future store has not been calculated or is calculated incorrectly. The right store location is one of the most important success factors. It is worthwhile to take the stage of selection of premises with all responsibility, because there is nothing worse than the need to change the place: when the store closes, the financial loss will be more significant than when it opens. If the place is chosen successfully, you need to understand how much money this object can bring to you. To do this, calculate the economic efficiency of the new facility using the following indicators:

· Number of outlet visitors: since you do not yet have the opportunity to establish a customer counting system, focus on an approximate indicator. It is known that visitors to your store can be no more than 3% of the total flow. Counting passers-by will have to be done on your own, but at the same time you will determine how popular your chosen place is. It should be noted that there are no exact criteria for determining the “popularity” of a particular place, however, some retail chains rely on the 100 indicator for people in 15 minutes. To determine the patency of the selected place, count all people passing on both sides of the store every day for at least one, or preferably two weeks. Follow the schedule and count passers-by every three hours in 15 minutes, for example, from 9.00 to 9.15, from 12.00 to 12.15, from 15.00 to 15.15, from 18.00 to 18.15 and from 21.00 to 21.15.

· Percentage of conversion of store visitors to customers, which is calculated by the formula "number of checks / number of visitors x 100%". In an still unopened store, it’s impossible to calculate the conversion rate exactly, of course, but you can accept an acceptable value that will be considered the norm for this outlet. The acceptable conversion rate for a store in a shopping center is 10%, and for a stand-alone store this indicator should be at least 20% (For more information on how knowledge of the conversion rate will help your business, see the article “Buyers Love Account” published in Shoes Report No. 106).

· Average check complexity that is, the number of units of goods contained in one check. It is clear that it is impossible to accurately predict this figure for a store that has not yet opened, but we can rely on the industry average. In shoe retail, the average complexity of a check is 1,8 - 2 units.

· The cost of the goods presented in the store.

So, let's try to make the necessary calculations: suppose that the attendance of the outlet in the shopping center of your choice is planned at the level of 300 people per day. That is, given the different traffic intensity on weekends and weekdays - approximately 10 000 people per month. It is known that the average conversion percentage for a store in a shopping center is 10%, so suppose that out of 10 000 visitors, only 1 000 people leave your store a month with a purchase. Taking into account the average complexity of the check in shoe retail, we get 2 000 units of goods sold per month. If a pair of shoes in your store is sold at an average price of 3 000 rubles, we calculate the revenue of a potential store: 2 000 units multiplied by 3 000 rubles = 6 000 000 rubles. Thus, taking into account all the costs that the company will incur during the reporting period (month or year), you can pre-calculate the profitability of turnover and refund. (A sample list of the monthly expenses of the outlet is attached to this article).

Error No.7: Incorrectly selected opening time. The ideal opening time for a shoe store is the beginning of the season - that is when the maximum demand from the buyer arises. Opening a store in the middle of the season or during the sales period, you will be faced with the fact that it will be very difficult to sell the product at full cost, and in a store that has just opened and has not established itself, it is almost impossible. The ideal time for opening is considered to be the end of July and the beginning of August for collections of the autumn-winter season and mid-February and early March - for collections of the spring-summer season.

List of parameters that must be considered before starting a new store:

  1. The total population of the settlement;
  2. The lifestyle of the target audience of the future store;
  3. The average monthly income of residents of the village / district in which the shopping center / freestanding store that suits you is located;
  4. The presence and location of shopping and entertainment centers with a pool of competing tenants within 5 km of your shopping center or store and the number of other shopping centers in the same radius;
  5. The number of direct competitor stores with free-standing stores within 5 radius of your store;
  6. The presence and location within a 5 km radius of shopping and entertainment centers with a pool of tenants who are not your direct competitors;
  7. Product-assortment policy of competitors present;
  8. Features of the selected area: sleeping area, city center, working area, cultural and tourist part of the city, etc .;
  9. The presence and location of offices, business institutions, universities in the area where the store is expected to open;
  10. The presence of existing shopping areas of the city in places of traffic intersections (the most visited “shopping streets”);
  11. The presence of transport interchanges in the vicinity of the proposed shopping center / store;
  12. The presence of transport stops (bus, metro, trains);
  13. The presence of a bus station, railway station within walking distance;
  14. Traffic (the number of people passing) on ​​the street where the shopping center / store will be located.

The main cost items of a retail store:

Required:

  • Rent
  • Assortment purchase costs
  • Wage Fund (must not exceed 7% of the total turnover)
  • Operating and household expenses
  • Logistics
  • Taxes
  • Bank services (loans and services)
  • Advertising Budget
  • Merchandising Department Budget
  • HR budget
  • Security Budget
  • Company overhead

Additional:

  • The budget of the IT department (in case the site is supposed to be created)
  • The budget of the control and audit department (if the audit and control of the preservation of material values ​​will be carried out by individual employees)
Sometimes it seems that opening a shoe store is not so difficult: you just have to choose a suitable room, buy an assortment and hire sellers. However, this seemingly simple scheme has ...
3.72
5
1
7
Please rate the article

Materials on the topic

Shoe business management in 2021: what to look for

The past year was a shock for most, a new starting point, the beginning of the end or a complete transformation of the retail business. One of the main results - 2020 literally pushed online retail, intensive digitalization of sales channels, ...
27.04.2021 1996

Marketing for a retail shoe store. How to incentivize customers to buy with gifts

In this article, SR expert, business coach Evgeny Danchev talks about how to conduct a marketing campaign that will be equally profitable for both the company and ...
19.01.2021 4563

How does mystery shopping help expose the gaps in your store's service?

Today, the lack of quality service and a customer-oriented atmosphere in the store is bad manners. Companies that did not care about their customers, did not think about their feelings and emotions before, during and after shopping - ...
19.01.2021 3368

Top trends in shoe store window dressing this fall and this winter

Autumn-winter season 2020/21 for fashion retail is special, which we will remember for a long time. Almost all companies were forced to revise their budgets - they cut current spending, cut costs as much as possible. AND,…
30.11.2020 7789

What changes are needed to make the work of sales staff and line managers more effective?

The results of shoe sales are now influenced by the factor of deferred demand: two and a half months of self-isolation is a very long period for buyers. Any market or consumption model of people on it is a system, and by all the properties of systems, they ...
13.10.2020 8110
When you sign up, you will receive weekly news and articles about the shoe business on your e-mail.

To the beginning