We’ve all heard the statistic before: 80% of new businesses fail within the first 18 months.
For retailers specifically, only 47% of new retail concepts are still operating after 4 years.
While this isn’t exactly earth shattering news considering that competition in the retail segment has always been especially fierce, it does beg the question as to why this happens.
Why do so many new concepts fail?
The quick answer that probably immediately comes to top of mind is that they run out of money.
And if that’s what you thought, you would be right – but only on a surface level.
The biggest reason that most concepts fail goes much deeper than that. It starts with the foundation.
A study conducted by Dunn and Bradstreet found that 90% of small businesses fail because of a lack of skills and knowledge. To me, this means that most people are missing the one key element that makes everything else fall into place.
Do You Know Who Your Customers Are?
As an emerging or new concept I’m sure you’ve done your homework, but do you know the answer to the most important question? Do you know who your customer is and why he/she is going to shop with you?
The best retailers know that everyone is not their target audience and that they need to have a narrow focus. They know who their customers are, who they aren’t, and why those customers are shopping with them.
By having a complete understanding of their customer, they are then able to pick the best site locations by finding areas that are rich in their core customers and potential customers, communicate to customers better by learning their language and likes and dislikes, and also pick the best products or services to offer based on customer needs and demands.
How To Get To Know Your Customers
So how do you get to know your customers? How do you get to know them so well that you know everything from their lifestyle choices and behaviors to their values and shopping habits?
Well, the short answer is through customer data and analytic solutions.
With the right analytic solution, you can profile your customers and build a solution that will help guide your expansion plans, even if you’re just beginning your growth process and don’t have customer data.
The Bottom Line
Growing your brand is a daunting undertaking with no shortcuts and plenty of pitfalls that can end up costing a fortune or even completely derailing your business venture.
Given these risks, it’s crucial that emerging brands are ready and able to create a spot for themselves and connect with consumers.
If you’re interested in finding out more about how customer analytic solutions can help you find your best customers and help you with your growth strategies, then we need to talk.