Every Thursday evening from 8 to 9pm ET, IBN hosts #HandmadeChat, a Twitter talk show to help handmade entrepreneurs sell more products and make more money. While the show is aimed mainly at members of business owners and artisans who make handmade consumer products, the topics and discussions can empower and encourage the growth of any small business.
Our chat was sponsored by Bramble Berry, handmade soapmaking supplies, molds, fragrance oils and instruction.
Last night’s topic was How to Open a Retail Store. Our guest was Lisa Stewart, an award-winning designer and illustrator whose work can be found in homes, galleries and shops nationwide. She recently opened a retail store in Raleigh, North Carolina, to serve as a showplace for her work, a place to sell her wares, and a location where she can grow her lifestyle brand. Here are some highlights from my interview of Lisa, including informative questions and answers and action steps you can take to grow your business.
Q1 WHAT SORTS OF THINGS DID YOU DO TO PREPARE YOUR BUSINESS FOR OPENING A STORE?
First, I built and established a product line and brand recognition. Both are critical to store success, and they helped me create good online traction and a customer service track record. In short, I built demand.
I listened to my customers tell me what they like and don't like over the years. I have participated in numerous galleries and juried shows over the years. This built brand recognition as I also patiently learned the art of dealing with people.
Q2 WHY DID YOU OPEN A RETAIL STORE WHEN YOU ALREADY HAD A SUCCESSFUL ONLINE BUSINESS?
I craved one-on-one customer interaction and feedback. You cannot get that online, and if you want it, a retail store is a great way to get it.
I wanted to host live events and private parties in my local area, and I was not able to do that in my home. Importantly, I wanted my customers to actually see and verify that our products really are handmade, in America. Finally, I am creating a lifestyle destination where my brand can grow and offer services to the public.
Q3 WHAT ARE THE FIRST STEPS TO TAKE WHEN LOOKING TO OPEN A RETAIL STORE?
Location is key. Locate in a place where your ideal customer already shops. Locate in a place where there is ample public parking or public transportation as the case may be.
Remember — foot traffic is nice, but the feet must belong to people who will pay the price you ask for your handmade products.
In other words, if you make and sell handmade, don't locate where the WalMart crowd shops. Try to locate where popular local events occur a regular basis. For example, First Fridays in my area is already popular, and my store is located right in the middle of it.
Don't forget to have your administrivia together — insurance, merchant account, sales tax certificates, signage. You know, the city and county have to get their due …
Q4 WHAT ARE YOUR BEST TIPS FOR FINDING AND NEGOTIATING FOR COMMERCIAL SPACE?
Make sure you need the space you lease. Nothing is worse than paying for unused space. Don't lease too much, but don't lease too little either. Customers do not like being cramped.
When you negotiate with your landlord, try to get as low a security deposit as possible. Check the lease carefully; you may even wish to hire an attorney to review it for you. Look it over line by line, and watch for what happens if you break your lease. Try to negotiate no penalty or loss of security deposit only in the event things don't work out and you have to leave before your lease is up. Look for what repairs and signage landlord offers.
Develop a good personal relationship with your landlord. Invest in your space — we painted and installed hard wood floors. We wanted our store to look nice, plus the investment we made shows commitment to our landlord's vision as well. It's a win/win.
Do not sign a lease for more than 12 months; try for less if you can.
Q5 ARE YOU CONFIDENT THAT RETAIL STORE OWNERSHIP WILL BE PROFITABLE IN THIS ECONOMY?
For me, yes. We have done enough shows to hear thousands of people ask, “Where is your store?” For years, we'd send people to our website and never hear from them again. Now, we can finally give them an address!
Human beings are tactile creatures and like to shop in person, especially when buying handmade goods. They can see, smell, touch …
Magic happens when people are in the presence of an artist.
They love the interaction, spend more money, have more fun. Being in our own space allows us to take time with customers and discuss how we can customize items just for them.
Q6 DO YOU FEEL THAT OPENING RETAIL STORE SPACE IS ESPECIALLY GREAT FOR HANDMADE BUSINESSES?
It depends. If you make and sell consumer products, it makes sense to consider retail store ownership. But it's not right for everyone.
Physical space involves additional risk, and perhaps more tax and licensing requirements. Check on this in your area. Assess your liability insurance needs. Ask a local agent to help you — what if someone slips and falls in your store?
If you're not a people person and/or cannot hire people persons to staff your store, it's not a good move.
Before opening a retail store, consider opening your existing manufacturing studio periodically to test the market first. Years of customer service is a confidence building exercise that translates into a seasoned shop owner.
You can learn to be a people person. Craft scripts to answer questions. Embellish with short stories.
Resist using negative words when describing anything. Instead lead with ‘We provide…” Never publicly compare your shop to any other. Let customers do that.
Q7 HOW DO YOU RECOMMEND PEOPLE PROMOTE A RETAIL STORE?
Definitely have a grand opening, tell everyone who will listen what your opening date is. Offer specials on opening day. I gave away free prints to first 50 customers who came in on opening day.
Alert the local media: papers, radio stations, etc. They sometimes cover store openings, and if they don't cover yours, at least you'll be in the cue for the future.
Employ your entire online marketing arsenal: newsletter, blog, FaceBook, Twitter, etc., to get the word out. Visit all of the local stores in the area and let them know you are opening. Print postcards with your store name and address and grand opening hours. Give them to everyone. (If you can't make postcards, or you forget to, just get a sticker printed and put it on your biz cards, or whatever.)
Q8 WHAT SORTS OF THINGS CAN YOU DO TO MAKE YOUR RETAIL STORE STAND OUT?
Definitely leverage good online marketing to promote the physical location. Decorate nicely, make it a nice place for your customers to come, and tell their friends. If you make handmade, create ways to give customers a glimpse of how you make what you make. They love that. Collaborate with other retailers to create events to leverage when there's most traffic in your area.
Q9 WHAT OTHER TIPS AND RESOURCES CAN YOU RECOMMEND FOR PEOPLE CONSIDERING OPENING A RETAIL STORE?
Dream big. Use historical shops as inspiration. For me: Harrods of London.
Remember that your shop is for your customer, not you. Design the shop that she would be comfortable in.
Utilize all 5 senses to build your shop. Smell is important … and underutilized. In my case, because I design and make leather goods, the smell of leather is an olfactory reward all its own. It's a definite plus if you make things that smell good!
Read Fascinate: Your 7 Triggers to Persuasion and Captivation, by Sally Hogshead. Take the test in the book to help you define your shopping space. For my store, “fascination” keys are lust and exclusivity.
Shop other stores as a customer. Look for: Service, layout, display. Pay attention to every detail.
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When Is The Next #HandmadeChat?
The next #HandmadeChat will be Thursday, November 15, 2012, at 8pm ET. Our topic will be How To Use Awards Programs To Grow Your Business.
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