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Tag: Retail Businesses

  • Mom’s Creative Side Hustle Grew to $570,000 a Month: Penny Linn | Entrepreneur

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    This Side Hustle Spotlight Q&A features Krista LeRay, the 34-year-old founder of needlepoint store Penny Linn. She lives with her husband and two children in Westport, Connecticut. Responses have been edited for length and clarity.

    Image Credit: Courtesy of Penny Linn. Krista LeRay.

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    What was your day job or primary occupation when you started your side hustle?
    Before starting Penny Linn, a new-age needlepoint store offering hand-painted canvases, accessories and more, I was a full-time influencer running my blog, Covering The Bases. I started the blog in 2013, but I only took it full-time about a year before starting Penny Linn. While managing the blog, I had a corporate career at Major League Baseball, where I worked on the social media team for over five years.

    Related: He Spent $36 to Start a Side Hustle. Now the Business Earns 6 Figures a Year — With Just 1-2 Hours of Work a Day: ‘Freedom.’

    When did you start your side hustle, and where did you find the inspiration for it?
    I initially learned to stitch from my grandma, who inspired the name of the business, and then I really got into it in college at the University of Kentucky. I picked it back up again in 2018 when I started stitching custom belts for my dad and husband, and a ring bearer pillow for my wedding in 2019. Little did I know that this would be the perfect hobby to fall back in love with as the pandemic approached.

    As I got back into stitching, I quickly stitched through my stash of canvases and was disappointed with both the in-person and online needlepoint shopping experiences. It felt antiquated; there weren’t many sites with a good user experience, a handful of the shops made you call to order, and the designs felt very mature. I found myself wishing there were more fun and better accessories and canvases, so I started making them after my search came up short.

    Image Credit: Courtesy of Penny Linn

    What were some of the first steps you took to get your side hustle off the ground? How much money/investment did it take to launch?
    When I started painting my own canvases, I wasn’t even in the mindset of starting a business; it was still just a hobby for me. I probably spent under $100 buying a blank canvas on Etsy and paint at Michaels, and painted the infamous Ralph’s Coffee cup for myself. When I shared it on my Instagram, I had an overwhelming number of followers ask to buy one, so I knew my followers were also interested in needlepoint.

    As I began searching for cuter accessories for myself, I found that many custom items had a 100-item minimum. At the time, I had a business bank account for my blog, so I used that money to order the inventory and knew that I could at least sell 90 of them to my followers who also needlepointed. After making a few canvases and seeing the demand, I realized I had enough ideas to launch a larger collection online. So I bought the smallest Shopify package, started sourcing needleminders and project bags, and recruited my friends and family to help paint canvases.

    All in all, I spent about $5,000 on the initial inventory for our accessories and an additional $2,000 on shipping materials, canvas tape, etc., but none of this accounted for my time painting the canvases one by one, which was the biggest investment.

    Related: These 31-Year-Old Best Friends Started a Side Hustle to Solve a Workout Struggle — And It’s On Track to Hit $10 Million Annual Revenue This Year

    If you could go back in your business journey and change one process or approach, what would it be, and how do you wish you’d done it differently?
    Looking back on how I built my business, it’s a catch-22; if I had known what I know today, I might have done it differently. However, having my hands in every aspect of the business has brought me a great deal of knowledge and appreciation that continues to shape the business.

    In the beginning, I hand-painted nearly every canvas, which took many, many hours, but it kept costs low since my labor was essentially free and gave me control over my inventory. If I had known that people outsourced painting, it would have saved me so much time and energy, but doing it myself taught me the value of a hand-painted canvas.

    Similarly, I wish I had hired people at the beginning to take more off my plate, but by doing it all, I learned valuable lessons and knew how I wanted every aspect of the business to run. I don’t think Penny Linn would be such a thoughtful and impactful brand today if I hadn’t had my fingers on every aspect of the business in the beginning.

    Related: I Interviewed 5 Entrepreneurs Generating Up to $20 Million in Revenue a Year — And They All Have the Same Regret About Starting Their Business

    When it comes to this specific business, what is something you’ve found particularly challenging and/or surprising that people who get into this type of work should be prepared for, but likely aren’t?
    The reason Penny Linn has been so successful as a business, and also in reviving the cultural love for needlepoint, is that we brought much-needed innovation to the industry. I never expected the amount of pushback from vendors and industry vets I received. Across the board, people pushed back on our ideas and how we ran our business.

    Today, we have found partners who believe in our growth and are building with us. When we launched our acrylic line in 2022, there was so much chatter online that it wasn’t innovative or unique, but today we hold a patent for the design, and it’s one of our bestselling lines. We also take a slightly smaller wholesale margin than the industry standard because I believe in making needlepoint accessible. Our wholesale partners were initially adamant that it wouldn’t be successful, but it has proven otherwise. I developed a thick skin while blogging and learned to shut out the noise, which has followed me into Penny Linn as we continue to shake up the industry.

    Image Credit: Courtesy of Penny Linn

    Can you recall a specific instance when something went very wrong? How did you fix it?
    I vividly remember one of our first bag launches, which did not go as planned. It was a beautiful project bag with leather and PVC that we sold through so quickly! As I was packing them, I tested a few of the zippers and was very disappointed to find that they stuck and were difficult to open, despite the samples working perfectly. I reached out to each customer who had ordered them and let them know that the bags weren’t up to our standards. I offered them a full refund if they wanted to return the bag or a discount if they wanted to keep it.

    This became one of my biggest rules in business: When anything goes wrong, I need to take ownership and work to rectify it immediately. Our community was beyond appreciative of how proactive we were, and most ended up keeping the bags. We put the rest of the bags on clearance and now work with our team and vendors to ensure we have quality control measures in place.

    How long did it take you to see consistent monthly revenue? How much did the side hustle earn?
    In the first six months after we launched, the only consistent revenue was what we generated during launches. Everything would sell out so quickly that we wouldn’t have any inventory left until the next launch. We would often have a day or two without sales in between launches, which wasn’t a sustainable way to run a business. To prevent this, we started producing more inventory and introduced our Penny Linn Collective, allowing us to bring on designers who expanded our offerings. Our designer collective has been fruitful for us over the past five years, and we continue to grow it today.

    We started seeing more consistent revenue in year two, doing just over $30,000 per month. The popularity of our launches started to level out, and we could better forecast inventory to keep our income steady. It was such a big deal for us at the time to reach these numbers, but we do that in a day now. Each year has been drastically different in terms of demand, and about every six months, we reach an inflection point where we need to increase quantities even more.

    Related: This Couple’s ‘Scrappy’ Side Hustle Sold Out in 1 Weekend — It Hit $1 Million in 3 Years and Now Makes Millions Annually: ‘Lean But Powerful’

    What does growth and revenue look like now?
    It’s been really exciting that Penny Linn has doubled or tripled each year. In 2024, we did $4.4 million in revenue, and we have already surpassed that and are on track to double it in 2025. We are currently averaging $570,000 per month. Whatever I think our ceiling might be, we come in and double it each year. Our growth has been so explosive that I do expect it to start leveling out in the next year or so, but there is still so much opportunity for the business.

    My mind is always racing with new ideas for the brand as we expand our product offering, launch new designers under the Penny Linn Collective and bring new accessories to market. Our store opening in Norwalk, Connecticut, earlier this year was a huge milestone for us, and now we are exploring what more stores might look like. I don’t see our growth slowing down anytime soon.

    Image Credit: Courtesy of Penny Linn

    What do you enjoy most about running this business?
    I honestly love what I do so much and find great fulfillment in it. I feel so much pride, excitement and joy thinking about what we’ve created at Penny Linn and the business I’ve built in under five years. It’s nothing I could have ever imagined as my career or what I expected Penny Linn to grow into. We haven’t seen many bumps in the road yet, and keep having success after success, which energizes me to keep going.

    I pride myself on the fact that Penny Linn is “by a stitcher for a stitcher,” and there is nothing more satisfying as a needlepointer to want something in my collection and to be able to make it. I’m privileged to have the ability to work with our vendors to create the products of my dreams, and it’s just as exciting to see how much our community loves them.

    I also find so much joy in the change we have brought to the industry and how we have been able to bring needlepoint to the forefront for a new generation. It’s crazy to sit back and think that my brand has revived a centuries-old tradition and built it into something that will continue to live on and evolve for generations to come.

    Related: These Friends Started a Side Hustle in Their Kitchens. Sales Spiked to $130,000 in 3 Days — Then 7 Figures: ‘Revenue Has Grown Consistently.’

    What’s your best business advice?
    The first is, “If you don’t ask, the answer is always no.” People are often scared to reach out because they are afraid of rejection, but my motto is always to ask, and if they don’t reply, it’s still not a no. If they don’t respond, it’s not the end of the world, but the opportunity for the answer to be yes is so much greater.

    My second is to learn the difference between constructive feedback and criticism. If someone doesn’t like you or your business, they will never have anything nice to say, and it’s not worth listening to. However, if they are a loyal fan and a frequent shopper, and they comment on how a product or process might be improved, it’s worth listening to. It’s easy to get lost in the negative feedback, but the faster you learn what is worth listening to, the better decisions you will make for your business.

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    Amanda Breen

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  • When Is the Right Time to Think About Your Holiday Inventory? | Entrepreneur

    When Is the Right Time to Think About Your Holiday Inventory? | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    It’s currently summer, so most people are thinking about attending barbecues and buying fireworks — not planning their holiday shopping season. However, if you run a brick-and-mortar store or ecommerce business, this is the best time to begin thinking about the holiday inventory.

    Successful planning in June and July will set you up for profitability in November, December and January. Here are six ways you can successfully plan for increased inventory demand during the holiday season.

    Related: July Is Just Early Enough to Start Planning for Holiday Selling

    1. Come up with a timeline

    The holiday season is the most profitable sales period for most retailers. According to the National Retail Federation (NRF), holiday sales exceeded $964 billion in 2023, a 3.8% increase from the previous year.

    So start by coming up with a timeline of key dates when you can anticipate increased sales and demand. These dates most likely include:

    Think about the shipping cut-off dates for each of these holidays, and add them to your calendar. That way, you can let customers know the last days to receive standard and expedited shipping on their orders.

    2. Determine what you’ll need

    Next, you’ll forecast the types and amount of inventory you’ll need for the holiday season. Having enough inventory on hand to meet customer demand will ensure you don’t lose out on business to competitors. It will also help you avoid overstocking items you don’t need.

    The best way to estimate holiday demand is by looking at previous sales data and taking note of customers’ shopping patterns. Of course, shopping habits can change slightly from year to year, so you also want to look at industry trends. For example, you can see what your competitors are doing and how they’re preparing for the holidays. And if you have an NRF membership, you’ll receive insights into consumer and retail trends.

    Once you’ve done adequate research, you can begin planning your holiday inventory. You can also start to think about when you should begin marketing and how much staff you’ll need to have on hand to manage the increased demand.

    3. Do an inventory audit

    An inventory audit involves regularly reviewing your inventory for accuracy. During an inventory audit, you’ll verify that your physical inventory matches what you’ve recorded in your financial records. An inventory audit can also help you spot inefficiencies in your supply chain.

    To perform an inventory audit, you’ll start by organizing your inventory to reduce the odds of miscounting items. From there, you’ll begin physically counting and recording each item into your inventory management software.

    Once the audit is complete, you’ll reconcile the count with your inventory records. If there are any discrepancies, you can investigate where they came from. You can also begin developing a plan to reduce discrepancies in the future.

    Related: You Should Be Planning Now for Holiday Sales — Here’s How

    4. Check in with your suppliers

    Once you know how much inventory you’ll need to meet the holiday demand, you should begin reaching out to your suppliers. Checking in early with your suppliers will ensure you’re on the same page and you’re not caught off-guard by changes to their order times or pricing.

    It’s also a good idea to ask if any of your suppliers offer pre-sale discounts or promotional pricing. It never hurts to ask, and some may be willing to give you a discount for large orders.

    5. Think about financing

    As you begin planning for your holiday inventory, one of the biggest issues is how you’re going to pay for everything. Many small businesses don’t have the cash flow to pay for a large inventory order, shipping supplies and the unexpected costs that come along with it.

    If you find yourself in this place, financing may be a good solution. Inventory financing is a one-time loan or ongoing line of credit you can use to purchase inventory for your business. The inventory purchased is used as collateral for the loan.

    Financing can help you maintain consistent cash flow during seasonal fluctuations in your business. It will also give you the flexibility to respond to increased customer demand. If you’re interested in exploring your financing options, you should begin looking into this now so you’ll be well prepared come fall.

    6. Place your orders early

    Many customers begin their holiday shopping in September and October out of concern over product shortages and slow shipping times. So you want to place your inventory orders as soon as possible so you can capture those early shoppers.

    However, it’s impossible to forecast exactly how much inventory you’ll need, and you’re bound to run out of items. So you also want to have a plan for how you can quickly replenish out-of-stock items. For example, a good inventory management system will alert you when you’re running low on certain items and need to re-order.

    Related: Keep Calm and Holiday On: How to Plan for the Holidays Year-Round

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    Joseph Camberato

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  • Woman Goes Viral for Returning Costco Couch After 2 Years | Entrepreneur

    Woman Goes Viral for Returning Costco Couch After 2 Years | Entrepreneur

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    A woman who took advantage of Costco‘s generous return policy is going viral on TikTok.

    In a clip that’s been viewed more than two million times, Jackie Nguyen explained what happened when she decided to return a couch she’d owned for two-and-a-half years. Nguyen said she didn’t have a receipt for the couch and admitted she was nervous.

    “It is very intimidating going in there with a big giant purchase, and you’re returning it … it’s like very intimidating,” she said. “There’s a lot of people staring at you. But who cares? Return it, they have an awesome return policy.”

    @xojacckss Returning my couch to costco ✨ #costcoreturns #costcotiktok #costco ♬ original sound – JackieNguyen

    Nguyen explained that she remembered the date that she purchased the couch, which she was able to share with the Costco employee, who was then able to find her purchase record and accept the return — for a full refund.

    Related: Costco Members Have an Exclusive New Perk

    “[The employee] just asked me if there was anything wrong with it or if I just didn’t want it or like it anymore,” she explained. “And I said I just didn’t like it anymore, we just don’t like the color anymore. And they gave us our refund, full refund to [our] card.”

    In a now deleted post, Nguyen told viewers that when returning a large ticket item like that to Costco, you can only expect to be refunded for the amount you purchased it for even if the item increased in price from the time of the original purchase.

    In Nguyen’s case, she purchased the couch for $900, but it now sells for $1,500, so she was refunded $900, as reported by Daily Dot.

    Costco’s return policy states that the company will “guarantee your satisfaction on every product we sell, and will refund your purchase price,” with certain exceptions, including some electronics that must be returned within 90 days and a no-return policy on cigarettes and alcohol.

    Related: This Hack Will Get You Into Costco Without A Membership

    Costco was up nearly 38% year over year as of Friday afternoon.

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    Emily Rella

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  • Online Holiday Shopping Fraud: What Retailers Need to Know | Entrepreneur

    Online Holiday Shopping Fraud: What Retailers Need to Know | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    The last few months of the calendar are huge for any retailer. In the U.S., Black Friday, Cyber Monday and Christmas sales reached almost $937 billion combined just last year alone.

    It’s also typically the time when retailers see an increase in fraud, with an 82% higher rate of daily attempts in the long weekend between Thanksgiving and Cyber Monday last year. However, experts say that retailers should brace themselves this holiday season in particular, as many factors have combined to make it an even more opportune time for fraudsters.

    First, the combination of rising inflation and predictions of a recession in the next 12 months means that consumers with ever-tightening budgets are more likely to fall prey to false “deals.” Second, the latest technology such as generative AI enables fraud to be executed on a much larger scale than ever before.

    Finally, crime does indeed seem to pay for fraudsters, as they are rarely held accountable for their crimes. New regulations in the U.S. are holding merchants and banks accountable for fraudulent transactions, while those behind them usually go unpunished. Generally, banks are more likely to be liable when the fraud involves an actual card, and merchants are more likely to be stuck with the cost for card-not-present transactions, when just the card’s details are needed, like online payments.

    Here are four types of online fraud for which merchants should be on the lookout this holiday season.

    Related: How to Transform Your Company’s Website Into a Real Money Maker This Holiday Season

    1. Malicious generative AI

    AI is being used to turbo-charge fraud, with tools such as WormGPT and FraudGPT now available for free on the dark web, where they are used for malicious purposes. FraudGPT can create very believable phishing scams, in addition to launching viruses and malware from websites that look like trusted retail sites but are in fact false. WormGPT can use data from chats to mimic customer support agents / trusted retail brands and thus trick consumers into giving confidential information (e.g. their credit card details), as well as create fake products on online marketplaces, generate counterfeit coupons and promotions that seem legit, and create fake online reviews.

    Email security company SlashNext conducted an experiment wherein they asked WormGPT to generate an email intended to urge an unsuspecting account manager into paying a fake invoice. According to researchers, WormGPT’s email was not only remarkably persuasive but strategic and cunning, demonstrating its potential for sophisticated phishing attacks.

    What can merchants do?

    To defend against this latest threat, merchants should ensure that all cybersecurity training for their company, such as awareness programs, is continually updated to include the latest warning signs of fraud. These include things like language that implies urgency.

    2. Website spoofing

    Another type of online fraud that merchants should be aware of is website spoofing, or brand impersonation with the intent of launching phishing attempts to execute online fraud. Cybercriminals replicate a business site with an identical frontend to the original and a barely-changed domain name so that users are likely not to realize the site is fake and so to trust it with their personal data. In 2022, more than 4.7 million phishing attacks took place.

    As long as the impersonated site is up, it damages the brand financially and reputationally, leading to customer churn. Memcyco’s Ran Arad refers to this critical time as the ‘window of exposure’: the time between when a counterfeit website is detected by Threat Intelligence Solutions, and its eventual takedown. In Arad’s words, “During this critical period, unsuspecting customers can be easily lured to the fake site, leading to potential monetary losses, data breaches and the exposure of personal identities. Alarmingly, many companies currently lack the insight to determine how many of their customers have fallen prey to scams during this vulnerable window.”

    With the help of technology, brands can take these spoof sites down. However, the process can take too long to prevent customers being conned out of their money by fraud.

    What can merchants do?

    Instead, merchants should implement website fraud detection solutions that are able to identify fraud attempts in real-time. These will minimize the scope of damage and exposure of customer details as much as possible.

    Related: Retailers Are Going to Shatter Discount Records This Holiday Season — But You’ll Have to Shop the Right Way to Cash In

    3. Gift card fraud

    With gift card sales expected to reach $2 trillion by 2030, gift card fraud is also expected to increase — specifically around December time. Although there is an annual spike in gift card purchases in mid-December, Christmas Eve sees a staggering six to seven times more sales in gift cards.

    Gift card fraud occurs when fraudsters steal a user’s credit card information and then buy a gift card with it. This kind of scam is effective because it leaves very little trail for the victims to follow: fraudsters can make purchases with stolen gift cards without needing any ID. For consumers, it’s virtually impossible to get this money back.

    What can merchants do?

    Merchants can attempt to prevent gift card fraud by placing limits on the ability to make large or repeated gift card purchases. In addition, having an internal system for tracking individual gift cards helps prevent fraudsters from taking advantage.

    4. Bot attacks/account takeover

    Account takeover is an old threat in retail, but with a rise in ecommerce fraud rings it has taken on a new twist. Malicious actors are employing bad bots to facilitate credential-stuffing and brute force attacks, as automation can cycle through potential credentials quickly until successful. These attacks have the potential to lock retail customers out of their accounts, provide fraudsters with sensitive information, contribute to business revenue loss, and increase the risk of non-compliance.

    As bot attacks on ecommerce sites increased by 71% in 2022, merchants are caught in a double bind. On one hand, it has become increasingly challenging for merchants to keep user accounts safe. At the same time, failure to do so can harm their business through fraudulent transactions, payment fraud, user distrust, and a negative impact on their brand reputation.

    The sophistication of these cybercriminals and criminal rings is fast-increasing, presenting a significant threat to retailers. Ping Li, Signifyd’s VP of Risk and Chargeback Operations, highlights that at one point in 2020, the automated attacks on their Commerce Network increased by 146%: “We’ve seen fraud rings unleash bots for everything from credential-stuffing to breaking into accounts, to rapid-fire fraud attacks, to quickly buying up the inventory of hot products for resale.”

    What can merchants do?

    Merchants should invest in technology that identifies the newest emerging fraud tactics. Many of these tools use machine learning and artificial intelligence to defend against bot attacks by malicious actors.

    Related: What Every Small Business Needs to Know About Friendly Fraud

    Step up the protection of your business this holiday season

    As retailers brace for a surge in fraud during the holidays, many factors are rendering increased vigilance crucial. In these times of economic uncertainty, merchants must put additional protections in place, especially since they are now accountable for reimbursing the victims of successful fraud attempts.

    Fraudsters are also exploiting new and emerging technologies. Internal policies, including cybersecurity training and awareness, can offer increased protection. However, it is fraud detection technology — which identifies fraud attempts in real-time across multiple attack vectors, including websites — that should be the first line of defense for brands today.

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    Ralph Tkatchuk

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  • This Is the ‘Discovery’ Gen Z Wants to Make In Your Store | Entrepreneur

    This Is the ‘Discovery’ Gen Z Wants to Make In Your Store | Entrepreneur

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    Last week, I saw the sad news that one of my favorite shops was closing its doors after 22 years of business. Lulu’s Cuts and Toys, which sold kids’ toys and haircuts, was a mainstay in the Park Slope neighorhood of Brooklyn. I don’t have any children of my own, but Lulu’s was always go-to destination for my nieces’ and nephew’s birthdays and last-minute baby shower foraging. The place was stuffed with soft, surprising things — a cozy haven for unique and nostalgic discoveries: cute vegetable pun onesies, the classic whoopie cushion, stretchy rubber rainbow-colored ramen noodles, assorted Harry Potter wizard wands, etc.

    The business announced its closure with a note taped to the window (and its digital counterpart, a post on Instagram), signed by the owner Brigitte Prat, and her daughter Lulu, the store’s namesake. It read, in part:

    As a single mother and first-generation American, this community is not only where I grew my business’s roots, it is where I raised my daughter. Given the continued growth of big-box online shopping (Amazon, etc.), it is sadly no longer viable to keep our small business thriving with a storefront.

    We hope this serves as a reminder to support small businesses in the community. Their products may be $1 or $2 more than Amazon (but often, they are cheaper!), and in exchange, you get personalized customer service, more local jobs, more income circulating within the community (and out of multi-billionaires’ hands), a shopping experience that is better for the environment and a neighborhood that feels like a neighborhood and not a corporate strip mall.

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    Frances Dodds

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  • How to Increase Foot Traffic in Your Retail Store | Entrepreneur

    How to Increase Foot Traffic in Your Retail Store | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In today’s dynamic retail landscape, attracting and maintaining foot traffic is a critical element for the success of any brick-and-mortar store. The challenge is not only about increasing the number of visitors but also about ensuring that these visitors convert into loyal customers.

    As consumers seek to shop across multiple channels, physical stores must find innovative ways to captivate audiences and create memorable in-store experiences. This article explores key strategies to boost retail foot traffic, drawing inspiration from a valuable source of insights.

    Related: Why Brick and Mortar Is Here to Stay

    The power of visual merchandising

    An attractive storefront can draw potential customers inside your retail establishment. Utilizing captivating window displays and strategically positioned merchandise can pique the curiosity of passersby and entice them to explore your store further. Moreover, frequently updating displays can keep your store looking fresh and engaging.

    The potential of in-store events

    Creating a sense of community and belonging is a potent tool to bolster foot traffic. Hosting in-store events can achieve this goal effectively. From workshops and product demonstrations to launch parties and local artist showcases, numerous ways exist to bring people into your store and foster a sense of connection. Such events not only increase foot traffic on the day but also generate buzz and word-of-mouth marketing in the community.

    Related: The Rise of Click and Mortar — Why Online Businesses Should Consider Opening a Physical Store

    Mastering the art of customer engagement

    Every interaction with a customer can be a potential opportunity to convert them into a loyal patron. There is significance in engaging with customers by offering personalized experiences. Implementing a robust customer relationship management system (CRM) can help retailers gather insights about their customers’ preferences and shopping habits. Armed with this data, stores can provide personalized recommendations, discounts, and incentives that entice customers to return.

    Creating an omnichannel shopping experience

    In the digital age, the line between online and offline shopping is blurring. Integrating online and offline channels can be retailers’ game-changers. A seamless omni-channel shopping experience allows customers to browse online, make in-store purchases, or even order online for in-store pickup. By offering multiple touchpoints, retailers can cater to the preferences of a diverse customer base and ensure they can shop in a way that suits them best.

    Amplifying social media presence

    Social media has become an indispensable tool for retailers to engage with their audience and drive foot traffic. Retailers can leverage platforms like Instagram, Facebook, and X (formerly Twitter) to showcase their products, share customer testimonials, and announce special promotions. Engaging content and customer interactions can build a loyal online following that translates into increased in-store visits.

    Embracing loyalty programs

    Loyalty programs are a tried-and-tested method to boost foot traffic and keep customers returning for more. By offering rewards, discounts, or exclusive access to events, retailers can incentivize repeat visits and build a loyal customer base. These programs also allow retailers to collect valuable data on customer behavior, helping tailor offerings to individual preferences.

    Related: 5 Proven Customer Loyalty Programs That Pay Actually Off

    Perfecting store layout and customer flow

    The layout and flow of a retail store play a pivotal role in shaping the customer experience. A well-thought-out layout can encourage customers to explore different sections of the store and discover new products. It’s essential to create a welcoming and intuitive store environment that makes it easy for customers to navigate and find what they need. Regularly evaluating and optimizing the store layout can lead to increased foot traffic and higher sales.

    Staying in tune with trends

    Retail is an ever-evolving industry, and staying ahead of trends is essential for sustained success. Retailers should stay informed about industry trends, technology advancements and consumer preferences. By adapting to changing market dynamics and embracing innovation, retailers can position themselves as leaders in their niche and attract a discerning customer base.

    The success of a physical retail store hinges on its ability to attract and retain foot traffic. By implementing the tactics discussed, retailers can employ a range of strategies to achieve this objective. From the visual appeal of the storefront to the integration of online and offline channels and from engaging in-store events to personalized customer experiences, each of these strategies contributes to a holistic approach to increasing retail foot traffic.

    As the retail landscape evolves, adaptability and innovation will be the keys to thriving in this competitive environment. By consistently implementing these strategies and keeping a finger on the pulse of changing consumer preferences, retailers can ensure that their stores remain vibrant, relevant, and enticing to a growing base of loyal customers.

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    Ana Wight

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  • Why Amazon, Zara and H&M Are Gambling Away Their Customer Loyalty — and Paying a Very Costly Price. | Entrepreneur

    Why Amazon, Zara and H&M Are Gambling Away Their Customer Loyalty — and Paying a Very Costly Price. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Why risk obliterating customer trust for a few dollars? That’s the high-stakes gamble that’s plaguing the business landscape as companies increasingly implement return fees. In a bid to curb a burgeoning problem of product returns, businesses have inadvertently stepped into a loyalty minefield. The trend, prevalent yet contentious, warrants scrutiny through the lens of behavioral science to grasp its long-term ramifications.

    So, here’s the conundrum: businesses are hemorrhaging money on returned goods. Happy Returns, a logistics company, released a survey that found 81% of retailers have implemented some form of return fee in the past year alone. On the surface, charging return fees seems like a logical step. It’s a move aimed at deterring frivolous returns, and according to many companies, it’s working.

    Amazon, H&M, and Zara, retail giants in their own sectors, are among many that have started charging return fees and are promoting in-store returns. Amazon levies a $1 fee for shipping returns through United Parcel Service, while H&M charges $5.99 for returns sent through the U.S. Postal Service. Zara takes $3.95 off your refund for mailed returns.

    Related: Amazon Is Now Charging a Fee For Some UPS Store Returns

    On one hand, these fees are modest, but they are potent enough to disrupt the shopping experience. Consumers are savvy; they calculate the entire cost of shopping, including the hassle and expense of potential returns. Happy Returns also found that about a third of companies surveyed lost customers due to these new fees. According to their survey, more than 80% of consumers check a retailer’s return policy before making a purchase with a retailer for the first time and 55% of the consumer population surveyed have abandoned a shopping cart if the return policy wasn’t convenient.

    Blue Yonder, a supply-chain software provider, further substantiates this in a different survey, revealing that 59% of consumers are deterred from making a purchase if they’re faced with tighter return policies. So, while you might stop the bleeding in the short term by charging return fees, you’re creating a less hospitable shopping environment that drives customers away in the long term.

    The intricacies of cognitive biases in return fee decisions

    While financial metrics and logistics often dominate corporate decisions about return fees, cognitive biases play an underrated but influential role in this complex equation. Recognizing these biases not only sheds light on why businesses might opt for such fees but also offers insights into how these choices can adversely affect customer behavior.

    First, consider the cognitive bias of hyperbolic discounting. This bias explains our natural propensity to opt for immediate rewards over future benefits. When a business is dealing with the costly logistics of managing returns, the immediate relief provided by implementing a return fee can be overwhelmingly tempting. It’s a quick fix that shows immediate results, thereby satisfying shareholders and seemingly tightening up a leaky supply chain process. However, by focusing so intently on the here and now, companies often overlook the long-term consequence, which is the gradual erosion of customer loyalty.

    Next, let’s delve into the empathy gap. This cognitive bias refers to the difficulty of understanding and predicting the emotional states of ourselves and others in situations that are different from the present. When board members discuss implementing a return fee, they may find it challenging to fully comprehend the emotional toll such a fee takes on consumers. Often encapsulated in corporate bubbles, decision-makers may not grasp that for many consumers, the fee is not just an economic cost but an emotional one. It feels like a betrayal, a breaking of the tacit trust between consumer and brand.

    Finally, we must discuss the anchoring effect, where we grow used to a certain anchor and feel that it’s the normal and appropriate state. For years, many consumers have grown accustomed to a no-fee return policy, viewing it almost as a retail standard. When they’re suddenly confronted with return fees, even seemingly nominal ones, their reactions can range from surprise to betrayal. This anchoring effect — where customers have mentally pegged their shopping experience to the absence of return fees — means that the introduction of such fees creates cognitive dissonance and a negative emotional response.

    This form of customer anchoring can have significant repercussions. Not only are these customers likely to reconsider future purchases, but their overall perception of the brand may also shift negatively. They may even become vocal critics, sharing their displeasure in reviews or across social networks, thereby influencing potential customers. Brands need to recognize that they’re not just introducing a new fee; they’re deviating from a consumer expectation that has long been anchored to a no-fee experience. This pivot can create ripples that extend far beyond a single transaction, eroding hard-won customer loyalty and affecting long-term profitability.

    By taking the time to understand these cognitive biases, businesses can arm themselves with the nuanced insight necessary to make better decisions about implementing return fees. It serves as a reminder that decision-making, especially on matters that affect customer trust and long-term loyalty, should never be taken lightly or made in a cognitive vacuum.

    Related: Want to Return Clothes? At this Fast Fashion Retailer, It Will Cost You

    The case for dropping return fees

    By analogy, consider Southwest Airlines. I love flying with them. Perhaps I’m revealing my age, but I started flying when airlines didn’t charge bag checking fees for less than two checked bags. When other airlines started to charge fees, I felt a real reluctance to fly with them. I tried to take Southwest everywhere it flew, not even checking other airlines if I had a decent option with Southwest. And I’m not alone. Many travelers like myself became anchored to no bag checking fees and won’t even consider other airlines if Southwest flies to their desired destination. Sometimes they – and I – end up paying more for a Southwest ticket, but the absence of baggage fees and the added layer of trust make all the difference. Southwest stands as a vivid example of how a company can benefit by not nickel-and-diming its customers.

    So, what’s a future-forward retailer to do? In a world where brand loyalty is the golden ticket, consider zigging while others zag. Instead of aligning with the immediate benefit of return fees, invest in enhancing the overall customer experience. In doing so, you’re not just retaining a customer for one transaction; you’re retaining them for life. Understand that businesses don’t merely sell products; they sell experiences. And you’ll steal the customers pissed off at the Amazons of the world who nickel-and-dime them over return fees.

    Conclusion

    In the relentless race to maximize immediate profits, companies charging return fees risk long-term loyalty, the cornerstone of sustainable business. While the initial numbers might seem favorable, they mask an undercurrent of consumer dissatisfaction that could eventually morph into a full-fledged backlash. In a landscape punctuated by volatile consumer sentiments, the question businesses need to ask themselves is simple: Is the immediate monetary gain from charging return fees worth the irreversible damage to customer loyalty? Southwest Airlines already has its answer. What’s yours?

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    Gleb Tsipursky

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  • How Tech Can Help Retailers Manage Product Returns More Efficiently | Entrepreneur

    How Tech Can Help Retailers Manage Product Returns More Efficiently | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Imagine if 10-30% of all the items you gifted this holiday season came back to you because the recipient didn’t want them. What would you do? Recycle them? Regift them? Trash them?

    Retailers face this 365 days a year. In-store purchases have an average return rate of 8-10%, while ecommerce averages can reach 30% or more. If a retailer struggles to manage returns processing efficiently, high volumes can drain money and resources, as well as burden the environment with extra packaging waste and transportation emissions.

    Returns management doesn’t have to be expensive, difficult or wasteful. Supply chain technology has significantly matured to address reverse logistics processes. Rather than returns driven by manual tasks, today’s tech-driven returns bring big gains in efficiency, profitability and customer satisfaction.

    Related: The Secret to Long-Term Customer Loyalty Is an Easy Return Policy

    Returns conundrum: A burden turned opportunity

    When a return is made, it’s usually seen as a negative experience for both the customer and the retailer. But technology can change this perception by making returns an opportunity to re-engage and delight the buyer.

    Customers expect an online customer portal for initiating returns, but intelligent returns technology can take it a step further: It can automatically refund the customer if certain conditions are met or even incentivize them to make the return at the nearest store rather than ship it.

    At the warehouse, returns technology automates tasks and helps the team process the return faster, which gets the customer their refund, credit or exchange sooner. Tech-driven returns are a win-win for all parties.

    The impact of inefficient returns

    A ReverseLogix study of eCommerce retailers found that 80% of respondents said the cost of managing returns is “significant to severe.” Returns also have a staggering impact on the planet: In the U.S., return shipping transportation creates the equivalent emissions of +3 million cars annually, according to Gartner.

    Return rates are growing faster than revenue rates for 91% of retailers, as reported by Appriss Retail. We’re at the point where returns are either a threat to the bottom line and customer loyalty or a positive differentiator that keeps costs low and buyer happiness high. Technology will decide the difference.

    Related: 4 Things to Know About Ecommerce Returns to Minimize Lost Profits and Keep Customers Happy

    Rise of tech-driven returns

    Retailers are already using technology to optimize warehousing, order management, transportation and every other part of the supply chain. Using tech to drive returns management, however, has mostly been overlooked. But with skyrocketing return volumes and customer demands for fast and easy (and free!) returns, new technology has burst onto the scene to address these specific issues.

    When a product arrives at the store or warehouse, the team member scans in the return. A product image appears on the screen with important identifying details like the serial number, which is important for verifying it isn’t a fraudulent return.

    Depending on the item’s condition, the software auto-routes the product to the store location with the highest predicted resale value. If it’s gently used or damaged, it can be sent to a re-commerce site to recoup some of the value. The customer is automatically notified about the status of their return, eliminating the need for calls and emails about their refund, credit or exchange.

    A fast and frictionless returns process is a game-changer for a retailer’s operations and for turning a frustrating customer experience into one that builds loyalty.

    Sustainable returns: A win-win for retailers and the environment

    Returns technology addresses the huge environmental impact of returns. If a customer lives within five miles of a store, for instance, they can be incentivized to return the item there rather than through the mail and learn how this saves emissions and packaging. Returns technology can direct a damaged item to be recycled rather than landfilled or a gently used item to go to a secondhand re-commerce site.

    Practical tips for retailers

    Adopting returns technology can be challenging because returns don’t usually fall under a single leader or pyramid. Instead, it’s a patchwork of facility teams, supply chain leaders and customer experience leaders. So, if you’re considering a returns technology project, form a team or name an individual to champion it. Ideally, organizations with high return volumes would create a Chief Returns Officer role to head this essential part of the supply chain.

    Work with your returns technology partner to identify your business goals. Do you want to create an easier process for customers? Do you need more automation because of workforce constraints? Do you need to support corporate sustainability goals? Identifying goals will help you choose the right returns technology and ensure it has features that address your needs.

    Understand your existing tech stack: What supply chain systems do you currently have? How easily can returns technology integrate with them?

    Returns technology has a customer-centric advantage but also one that team members will adopt. It must be easy to train on and quick to learn, ultimately making their work faster and easier.

    Related: 5 Easy Strategies to Prevent Costly Retail Returns

    The future of tech-driven returns

    As the challenges of returns management mount, the features and capabilities of technology are accelerating to anticipate what’s next. AI is playing a big role in this.

    Virtual dressing rooms help consumers make informed buying decisions so they can avoid buying many sizes and colors (only to return most of their orders). AI-powered return policies can be flexible based on the customer profile, such as giving high-value customers more return options or a more lenient returns policy.

    For more sustainable returns, AI can compare a return’s condition against geography, seasonality and other factors to determine the best location for routing the return and capturing the highest resale value.

    The future of tech-driven returns is AI, and AI is happening now. Retailers that use returns technology are capitalizing on faster returns processing, lower costs, happier team members and customers who are delighted at every phase.

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    Gaurav Saran

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  • Walmart Reduces Starting Pay for New Store Employees | Entrepreneur

    Walmart Reduces Starting Pay for New Store Employees | Entrepreneur

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    Walmart, the largest private employer in the U.S., has reduced starting pay for new store employees in roles involving online order fulfillment and stocking shelves, The Wall Street Journal reported. Previously, new hires could make more than other store workers, such as cashiers, in roles that called for tasks like collecting merchandise for online orders. The retailer’s new pay structure means that most new hires will earn the lowest possible hourly wage for their respective store, regardless of the role they’re hired for.

    The new payment structure only applies to new hires, as current employees in these positions are not affected. About 50,000 Walmart workers received wage increases in July, a spokesperson told CNBC.

    In an official statement to the outlet, Walmart also added that pay adjustments aim to solidify a more consistent pay structure across various roles in the company.

    Related: Walmart Is Shutting Down 9 Locations (So Far) This Year — Is Yours One?

    “Consistent starting pay results in consistent staffing and better customer service while also creating new opportunities for associates to gain new skills from experience across the store and lay the groundwork for their career regardless of where they start,” the company said.

    Walmart’s revised pay structure comes after a period of wage hikes in the retail industry as a means to attract workers in a tight market. According to data from the Bureau of Labor Statistics, average compensation for retail workers was $23.11 an hour in 2022, up from pre-pandemic levels of $20.54 in 2019.

    Throughout much of 2021 and 2022, major retailers like McDonald’s, Target and Chipotle increased their starting pay to reel in employees amid hiring lags.

    Related: Costco Raises Wages to Remain ‘Extremely Competitive’

    However, the market has since cooled. A recent Labor Department report found that the job market shows signs of slowing, with the economy generating 187,000 jobs in August, down from the average monthly gain of 271,000 over the prior 12 months.

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    Madeline Garfinkle

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  • Dollar Tree Adopts Plans to Combat Store Theft, Profit Dips | Entrepreneur

    Dollar Tree Adopts Plans to Combat Store Theft, Profit Dips | Entrepreneur

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    Discount retail chain Dollar Tree is taking a “very defensive approach” to combat widespread theft in its stores, which the company said in an earnings call on Thursday partially contributed to a difficult quarter.

    The retailer’s last earnings report, which was released on Thursday, showed an overall increase in sales, but acknowledged that it is “not immune” to the ongoing “impact of elevated shrink.”

    Since 2022, Dollar Tree has been facing the issue of “shrink“ (inventory losses from theft, damage, and other factors) in its stores. Dollar Tree robbery arrests have occurred in states such as Florida, New York, and Pennsylvania.

    The company, which owns and operates Dollar Tree, Enterprise, and Family Dollar stores, saw an increase in same-store sales across its brands, but a 0.5% decline in its gross profit margin for the second quarter of 2023. On the call, CEO Richard Dreiling and CFO Jeffrey Davis partially linked the drop to increased levels of shrink. Despite efforts to address the ongoing issue, the shrink problem has worsened far beyond what it “had anticipated,” Davis said.

    Now, the retail giant is taking a more aggressive approach with measures ranging from increased items being locked behind shelves to discontinuing repeatedly sold products at certain stores altogether.

    Related: ‘Increasingly Serious’ Retail Crime Is Hitting Another Beloved U.S. Retailer Hard — and Its CEO Reveals a Bleak Trajectory

    “We are now taking a very defensive approach to shrink,” Dreiling said on the call. “We have several new shrink formats that we’ll introduce in the back half of the year, and it goes everything from moving certain SKUs to behind the check stand. It has to do with some cases being locked up. And even to the point where we have some stores that can’t keep a certain SKU on the shelf just discontinuing the item. So we have a lot of things in the works.”

    Dollar Tree isn’t the only retail giant combatting elevated levels of theft. According to the National Retail Federation’s 2022 report on organization retail crime (ORT), of 63 retailers — which operate thousands of stores across the U.S. — 70% stated that the prevalence of shrink has increased over the past five years. Furthermore, 89.7% of respondents said that their loss prevention departments are taking actionable measures to combat the phenomenon, making it part of their “goals, objectives or performance measures.”

    When accounting for the financial setbacks, the report found that the 1.4% increase in shrink accounted for $94.5 billion in losses in 2021.

    Related: Walmart CEO Doug McMillon Says Organized Retail Theft Could Lead to Stores Closing

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    Madeline Garfinkle

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  • 166-Year-Old Store ‘Gumps’: Holiday Season ‘May Be Our Last’ | Entrepreneur

    166-Year-Old Store ‘Gumps’: Holiday Season ‘May Be Our Last’ | Entrepreneur

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    John Chachas, a San Francisco resident and owner of the city’s 166-year-old luxury retailer, Gumps, is fed up with the city’s current environment. The high-end department store specializes in housewares, jewelry, and gifts, and has been in San Francisco’s Union Square area since 1861.

    Chachas took out a full-page ad in The San Francisco Chronicle on Sunday to voice his complaints, stating that it may be the “last” holiday season for the older-than-the-Edison-bulb retailer due to the “profound erosion of this city’s current conditions.”

    “San Francisco now suffers from a ‘tyranny of the minority’ — behavior and actions of the few that jeopardize the livelihood of many,” Chachas wrote in the ad.

    He went on to highlight the challenges being faced in the city due to remote work, decreased foot traffic, and the “destructive” city policies that have allowed the homeless to “openly distribute and use illegal drugs, to harass the public and to defile the city’s streets.”

    Related: Westfield to Give Up San Francisco Mall Due to ‘Challenging Operating Conditions’

    Chachas directly called on the governor, mayor, and city supervisors to take “immediate action” to clean up the streets, remove encampments, and enforce new policies.

    “San Franciscans deserve better than the current condition of the city,” he added.

    The response from Chronicle readers was mixed. “Read the tea leaves, Mayor London Breed and other elected officials. Do your job or we will find politicians who really care enough to make a difference,” James Hargarten of San Francisco wrote in a letter to the Chronicle.

    Gumps has been at 250 Post Street for 166 years. Liz Hafalia/The San Francisco Chronicle | Getty Images.

    Others disagreed with Chachas’ methods.

    “While I agree that San Francisco has work to do, his self-righteous tone reeks of the privilege that led the city down this path to destruction,” Michelle Vizinau, a resident of Stockton, CA, wrote in another letter to the Chronicle following the ad.

    Related: San Francisco Launches $6 Million Ad-Campaign to Lure Tourists Amid Retail Exodus and Drug Crisis

    Still, Chachas told The San Francisco Standard that he has heard overwhelming support since the ad ran.

    “No one’s told me, ‘Oh my, how uncaring you are toward the homeless,’” Chachas told the outlet. “I received multiple responses saying ‘truth to power,’ ‘You’re saying exactly what everybody believes.’ It’s just that no one listens.”

    Since 2019, 92 retailers have closed up shop in San Francisco’s Union Square area, according to The San Francisco Standard.

    Related: Nordstrom Is Closing Both Downtown San Francisco Locations: ‘Dynamics’ Have ‘Changed Dramatically’

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    Madeline Garfinkle

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  • How to Stop Online Marketplaces From Robbing Your Brand | Entrepreneur

    How to Stop Online Marketplaces From Robbing Your Brand | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Marketplaces have become extremely influential in ecommerce over the past three years. Major market players such as Amazon, Alibaba and JD attract millions of users, facilitating massive transactions across a wide range of product categories.

    They also generate a wealth of data on consumer behavior, preferences and trends. This strong market position gives them an advantage and the ability to charge unreasonably high commissions, basically robbing brands.

    The rise of marketplaces

    The journey of marketplaces goes back to the early days of the Internet when platforms such as eBay and Amazon pioneered the concept of online commerce. Founded in 1994 as an online bookstore, Amazon has evolved into a comprehensive marketplace offering a wide range of goods. eBay, launched a year later, popularized the concept of consumer-to-consumer online auctions. China’s JD.com and Alibaba also burst onto the market in the late 20th century.

    With the growth of ecommerce, niche and vertical platforms began to flourish. They focused on specific industries or product categories. A prime example is Etsy, a marketplace for handmade and vintage goods founded in 2005. And as technology has evolved, so have the capabilities of marketplaces. The introduction of secure payment systems, improved search algorithms and user-friendly interfaces have provided a new level of convenience, trust, and efficiency in online shopping.

    However, it wasn’t until after the pandemic that marketplaces took off. The year 2020 was a stellar time for them and e-commerce in general. Online platforms have become critical for brands to reach a broader customer base. In 2021, a whopping 42% of all online purchases were made through marketplaces. The convenience of shopping from home, the ability to compare prices and read customer reviews, and the seamless transaction process for customers have contributed to the rapid growth of online platforms. And in 2022, almost two-thirds of consumers said they were happy to be able to order everything they needed through one merchant.

    By 2027, third-party marketplaces will become the world’s largest and fastest-growing retail channel, accounting for nearly two-thirds of online sales. Amazon, Alibaba, Pinduoduo and JD.com are expected to generate $4.3 trillion in global sales, up from $2.5 trillion today. Experts say that the most successful retailers, both now and in the future, will operate third-party marketplaces, and consumer brands must align with them to flourish in this new retail environment.

    Although the concept of marketplaces itself is beneficial, including for brands, the strong position of online platforms has allowed them to dictate their terms to sellers and vendors and practically rob them.

    Related: 7 Revenue-Killing Mistakes for Ecommerce Retailers

    How online platforms make money on brands

    In the early days of marketplaces, when they needed to attract new suppliers to basically unknown platforms, contract conditions for vendors and commissions for sellers were usually based on a small percentage of the transaction amount. As marketplaces expanded and diversified, they introduced tiered commission structures to incentivize sellers with high sales volume. Those who achieved such volumes or met specific performance criteria could qualify for lower commissions, which offered a potential savings advantage.

    With time, marketplaces expanded their revenue streams by introducing additional services. They included premium placement in search results, featured listings, advertising options, and other services such as fulfillment, delivery, and marketing support. With these, marketplaces generate additional revenue while allowing merchants to increase their visibility. The problem is that though online platforms aim to increase the effectiveness of services and tools offered to sellers, their main goal is still to earn more by raising the penetration of those products, not optimizing sales for specific brands.

    As a result, Amazon, for example, now gets more than 50% of sellers’ revenue on average, compared to 40 percent five years ago. Sellers are paying more because Amazon has increased fulfillment fees, making advertising costs inevitable. The typical Amazon seller pays 15% per transaction, 20-35% for order fulfillment, and up to 15% for advertising and promotions. The cost of Fulfillment by Amazon, when Amazon stores, picks, packs, and ships orders, has been steadily rising, and there are few success stories of operating outside of this model. Advertising is optional, but it takes up most of the screen with the best conversions, so sellers inevitably have to buy Amazon advertising services to get noticed.

    The company has even been sued recently. According to the claim, Amazon penalizes sellers for failing to set the optimal price for their products by demoting them in search results and disqualifying products from the “Buy Box” feature, a white box on the right side of the Amazon product detail page, where clients can add goods for purchase to their cart.

    The power of AI

    With the growing influence of artificial intelligence, companies can now leverage AI to expand their presence, optimize operations and ultimately generate more revenue. We estimate that the global retail AI market will be worth about $350 billion by 2032 as more companies realize the benefits of neural networks and take advantage of them.

    Marketplaces already use AI-based tools that provide valuable insights into consumer behavior, campaign performance, and keyword search. Their main goal is to increase sales, and algorithms help them calculate which sellers’ products are worth promoting to maximize overall revenue. Online platforms analyze customer buying behavior, items in the shopping cart and the most viewed items to make recommendations, predicting what each client is likely to buy.

    Brands, too, can use AI to get to the top of marketplace search and increase the share of sales in their categories at the expense of internal marketplace traffic. However, sellers cannot access marketplace AI models. Platforms keep information about their developments secret and notify merchants of updates only when they occur. In Amazon’s case, Amazon Vendor Service can be used to access some of the AI functionality, but it increases the cost of doing business. At the same time, the service itself remains a black box. It means that brands cannot use platforms’ AI to promote their products. It also means they need third-party solutions to do so. What exactly would such AI solutions offer them?

    Related: How to Leverage the Power of ChatGPT and AI to Boost Your Shopify Store’s Success

    1. Intelligent and dynamic pricing

    AI solutions enable brands to implement intelligent pricing strategies. By analyzing market data, competitor pricing, and customer demand patterns, AI can determine optimal price points for products. Dynamic pricing allows sellers to adjust prices in real time based on factors such as supply and demand fluctuations, competitor activities, and customer behavior. This ensures that sellers remain competitive and maximize their revenue potential on marketplaces. Our experience shows that using AI to determine pricing allows sellers to recover up to 6% of previously lost margins.

    2. Intelligent adjustment for performance bids

    Leading marketplaces usually use real-time bidding (RTB) systems allowing advertisers to bid to show their ads to buyers. For example, on Amazon sellers bid on keywords, and the one with the highest bid and the best-targeted keywords usually wins. In other words, the winning bidding strategy is when the buyer’s search query matches the seller’s target keywords.

    With real-time data and advanced optimization techniques, businesses can ensure that their ad spend is used efficiently. AI algorithms can continuously recalculate billions of possible combinations of bids and amounts of budget, campaigns and segments, helping to rebound 20% of previously lost ROIC, based on our experience. Amazon, Alibaba, and JD already use such algorithms for in-house performance marketing.

    3. Efficient inventory management

    AI can optimize inventory management processes for sellers and vendors operating on online marketplaces. By analyzing historical sales data, algorithms can forecast shipments and sales by warehouse and SKU with granularity to organic and promotional sales and high accuracy, identify peak selling periods, and optimize inventory levels. This helps brands avoid out-of-stock or dead-stock situations, reducing storage costs and ensuring a seamless supply chain. Additionally, AI can automate inventory replenishment and order fulfillment processes, streamlining operations and minimizing human error.

    Related: 4 Ways to Use AI to Enhance the Customer Experience

    AI vs. People

    AI has enormous potential for sellers and vendors on marketplaces. By using AI to learn about customers, adjust rates, optimize pricing and manage inventory, brands can improve their competitive advantage, drive sales and increase overall profitability on online platforms.

    AI models also allow brands to save on time and resources of in-house teams and agencies, which, in our experience, companies typically hire to get their products to the top of marketplace storefronts. Сonsider, a medium-sized company from the food industry. Typically, a marketplace team (the one working to distribute products through online platforms most efficiently) includes an e-commerce leader, a manager, a designer, and a marketer. In addition, the company may hire an outside contractor to help its internal team.

    Nevertheless, these people are forced to engage in routine operations instead of using their time to solve strategic problems. With AI, teams can focus not on playing cat and mouse but on developing strategy and launching innovations, while algorithms will help implement them around the clock and in the most efficient way.

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    Pavel Podkorytov

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  • Squishmallows Hottest Toy on Market, Adults Driving Sales | Entrepreneur

    Squishmallows Hottest Toy on Market, Adults Driving Sales | Entrepreneur

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    When it comes to Squishmallows — the plush toy with irresistibly cute faces, egg-shaped bodies, and charming backstories — age is just a number.

    Created by toy designer Sunny Cho, the plushies were first released in 2017 and quickly gained a loyal following, which skyrocketed during the pandemic and has captured the hearts of all ages — particularly those above 18.

    “It’s been really interesting to see that it’s not just kids, it’s adults,” Laura Zebersky, president of Squishmallow’s parent company, Jazwares, told CNBC. “Our demographic is very wide and broad and it’s very unusual in our business to have that.”

    One hundred million Squishmallows, which cost between $5.99 and $39.99, were sold last year alone, per CNBC.

    The toy industry has dubbed the trend “kidulting,” which involves adults actively seeking products that evoke nostalgia from their youth. South Florida-based Jazwares, which acquired Squishmallows in 2019, told WaPo that consumers aged 18 and up have been the demographic driving up sales — which have increased 40% over the past two years, according to CNBC.

    While the company has collaborated with major franchises like Star Wars, Pokémon, and Hello Kitty to release limited-edition plush toys, it is also careful not to oversaturate the market with products.

    Nick, 27, (who spoke anonymously for career purposes), told the Washington Post that finding a specific and sought-after Squishmallow is “similar to the feeling of winning at a slot machine.”

    “It’s an addiction,” he added.

    Nick, who has about 400 Squishmallows, and estimates he’s spent nearly $2,000 on the plush toys over the past two years, is far from alone in his enthusiasm.

    Related: How I Could Have Saved Toys “R” Us — a Lesson in Brand Building

    “It took off in a way no one really expected,” James Zahn, editor-in-chief of Toy Book and senior editor at the Toy Insider, told the Washington Post. “Part of the initial appeal of Squishmallows was the fact that they were a little harder to get.”

    There’s also a Squishmallows community that’s about more than collecting the toys; for many, it’s about the shared experience and camaraderie among fans. Enthusiasts organize meetups, trade Squishmallows, and engage with influencers on social media platforms like YouTube, Instagram, and TikTok.

    Nancy Ferrell, 31, who has about 200 Squishmallows with her wife, told the Washington Post that collecting the plush toys gave her a sense of community online.

    “It brings joy,” Ferrell told the outlet.

    Related: How One Mom’s Mission To Rebuild Her Daughter’s Confidence Sparked a Revolution for The Doll Industry

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    Madeline Garfinkle

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  • Fourth of July Sales for ‘American Made’ Apparel Surge | Entrepreneur

    Fourth of July Sales for ‘American Made’ Apparel Surge | Entrepreneur

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    A Morning Consult survey from June found that despite rampant inflation, 65% of Americans “intentionally” purchased domestically-produced goods over foreign-produced ones within the past year, with 43% making it a “priority.”

    One company seeing this trend firsthand is American Giant, a San Francisco-based retailer whose merchandise is made in the U.S. The company says it logged record sales for its Fourth of July T-shirts this year, and the $60 shirts, featuring the slogan “American Made,” sold out on the first day, The New York Times reported.

    American Giant CEO Bayard Winthrop said the company excepted a reasonable level of purchasing traffic ahead of the holiday, but it’s now on its fourth purchase order to meet demand.

    While American Giant has been producing its clothing in domestic factories for over a decade, Winthrop says that the recent uptick in interest could possibly be exacerbated by supply chain issues overseas.

    “Reshoring,” a trend wherein businesses move production that was overseas back to its home country, has garnered traffic over the past year. Bank of America and UBS analysts noted a significant increase in mentions of reshoring during corporate earnings calls in the first quarter of 2023 as compared to the same period last year, CNBC reported.

    Factors such as Russia’s invasion of Ukraine and the ongoing effects of the pandemic — both of which have caused ongoing disruptions in shipping — have prompted companies to reconsider their sourcing strategies, the outlet noted.

    Related: The Man Behind the Hoodie That Started the Made-In-the-USA Apparel Movement

    In contrast, many retailers such as Target, Walmart, and Old Navy stock their shelves with imported patriotic-themed merchandise ahead of July Fourth, The Times noted, sparking criticism from some domestic producers regarding the disconnect between their marketing and manufacturing practices.

    “If you’re leaning into Americana to sell items that aren’t American made, I find it disingenuous,” Kristen Fanarakis, founder of Los Angeles-based brand Senza Tempo, told the outlet.

    Still, the price remains a factor. In the Morning Consult survey, those who said they would be willing to pay more for “Made in America” goods, 73% said they would be unwilling to do so if a product cost 10% more than a foreign-produced equivalent.

    Related: FTC Says Clothing Store Lions Not Sheep Was Faking Made in USA Labels

    Last month, lawmakers introduced a series of bills called the Level the Playing Field Act 2.0, which was introduced in early June and aims to address issues such as foreign producers moving factories to other countries to circumvent U.S. trade laws.

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    Madeline Garfinkle

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  • Overstock Is Changing Its Name, Domain to Bed Bath & Beyond | Entrepreneur

    Overstock Is Changing Its Name, Domain to Bed Bath & Beyond | Entrepreneur

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    Despite bankruptcy, liquidation, and final store closures, Bed Bath & Beyond isn’t disappearing off the (digital) map.

    On Wednesday, Overstock announced that it will be renaming itself as Bed, Bath & Beyond following last week’s $21.5 million acquisition of the company’s intellectual property and digital assets.

    “Combining the strengths of the Overstock operational model and the Bed Bath & Beyond brand will create a powerful synergy,” Overstock CEO Jonathan Johnson said in a statement. “I’m excited for consumers to experience the new Bed Bath and an even bigger and better Beyond.”

    Within the next week, Overstock will begin the domain change in Canada. In the following weeks, the change will take hold in the U.S. — redirecting all visitors of overstock.com to bedbathandbeyond.com.

    Related: Bed Bath & Beyond Is Shuttering Hundreds of Stores — Here Are the Much-Loved Retailers Ready to Move In

    Along with the domain change, Overstock’s mobile app and rewards programs will also be overhauled. The retailer’s “Club O” loyalty program will now be called “Welcome Rewards.”

    Just how much of Bed, Bath & Beyond’s brand Overstock will assume remains up in the air, but the company is looking to adopt many of the cherished elements of the now-defunct brand into their own, such as Bed Bath & Beyond’s wedding registry, The New York Times reported.

    Johnson also added to the outlet that Overstock is considering changing its name entirely.

    “We will probably have both logos for a little bit, but the goal is to transition as quickly as possible to Bed Bath & Beyond,” Johnson told The Times.

    Related: Here’s What Bed Bath & Beyond’s Bankruptcy Really Means for the Future of Retail

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    Madeline Garfinkle

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  • Costco Is Now Asking For Photo ID at Checkout. Here’s Why. | Entrepreneur

    Costco Is Now Asking For Photo ID at Checkout. Here’s Why. | Entrepreneur

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    You may need to show photo identification on your next Costco trip, even if alcohol isn’t in your cart.

    The wholesale retailer has begun cracking down on the influx of membership sharing, particularly at Costco’s self-checkout lanes, by asking for customers’ membership cards along with photo ID. While Costco has always asked for membership cards at checkout, the request for additional identification is new, per The Dallas Morning News, which was the first to report the news.

    “We don’t feel it’s right that nonmembers receive the same benefits and pricing as our members,” a spokesperson for Costco told the outlet.

    The company says sharing membership cards threatens a key element of Costco’s business model: low prices.

    Related: Costco CFO Implies Future Membership Fee Increase

    “Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses, making our membership fee and structure important to us,” the spokesperson added.

    Beyond the additional request for ID, Costco memberships are not changing.

    Costco Gold Star memberships cost $60 annually, and Executive memberships, which come with added rewards and perks, cost $120 — both memberships come with cards for two individuals with the same home address. Business memberships can add additional members to an account for $60 each.

    The retailer isn’t the first company to tighten restrictions on shared accounts. Last year, Netflix announced it would be cracking down on password sharing, citing the practice as detrimental to its bottom line. The new rule, which charges subscribers $7.99 a month for additional accounts shared outside of a user’s household, went into effect in May.

    It’s unclear how Costco’s crackdown will affect existing or future memberships, but just four days after Netflix’s new rule took hold, new subscribers rose by over 100,000.

    Related: Blockbuster Gets Cheeky With Netflix Over Password Sharing Fee

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    Madeline Garfinkle

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  • Trying to Boost Retail Sales? Here’s How Geofencing Can Help. | Entrepreneur

    Trying to Boost Retail Sales? Here’s How Geofencing Can Help. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    As a retailer, you’re always looking for new and innovative ways to attract customers and increase sales. One method that has gained popularity in recent years is geofencing marketing. By using GPS technology to create virtual boundaries around your store, you can reach potential customers in the surrounding area with targeted ads and promotions.

    In this article, we’ll take an in-depth look at geofencing marketing and its benefits for retail locations. We’ll cover everything from how it works and the different types of geofencing campaigns you can run, to the best practices for creating effective ads that drive foot traffic and boost sales.

    If you’re looking for a way to take your retail marketing strategy to the next level, geofencing could be just what you need. So, let’s dive in and explore the power of this cutting-edge marketing technique!

    What is geofencing marketing

    Geofencing marketing is a location-based marketing technique that uses GPS technology to create virtual boundaries around your store. These boundaries, or “geofences,” allow you to target potential customers who are within a certain distance of your store with ads and promotions on their mobile devices. This means that you can reach people who are already in the vicinity of your store and increase the likelihood of them visiting and making a purchase. Geofencing marketing is a highly targeted way to attract customers and boost sales, making it an effective tool for retailers looking to increase their foot traffic and revenue.

    How can I set up geofencing marketing for my store?

    Setting up geofencing marketing for your store involves a few key steps. First, you’ll need to determine the boundaries around your store that you want to target with ads and promotions. This can be done using GPS technology and mapping software. Once you have defined your geofence, you can then use a mobile advertising platform to create and launch targeted ads to potential customers within that boundary.

    To ensure that your geofencing marketing campaigns are as effective as possible, it’s important to consider factors like the timing of your ads, the relevance of your messaging and the overall user experience. By taking these factors into account, you can create ads that are tailored to your target audience and are more likely to result in increased foot traffic and sales for your store. Working with a mobile advertising platform that specializes in geofencing marketing can also help ensure that your campaigns are expertly crafted and optimized for maximum results.

    Examples of successful geofencing campaigns

    Geofencing campaigns have been increasingly popular in recent years for boosting retail sales. Here are some examples of successful geofencing campaigns:

    1. Starbucks employs geofencing technology to send targeted push notifications to customers who are in close proximity and have expressed interest. A prime illustration of this is their happy hour promotion, where select beverages are available for 50% off, and relevant users receive special push notifications regarding the offer. Besides pinpointing customers’ whereabouts or entries, geofencing marketing also enables Starbucks to classify them into different groups based on their preferred drinks, such as cappuccinos or frappuccinos, and deliver tailored push notifications accordingly.

    2. Burger King‘s Whopper Detour campaign is a successful example of geofencing and geo-conquesting. By offering its iconic burger for a penny to customers who downloaded the BK app while visiting McDonald’s, Burger King gained new customers from their competitors and generated extensive publicity. This well-planned campaign remains one of the top picks for exceptional geofencing advertising.

    3. Uber employs geofencing technology to target individuals at airports and hotels, as these are places where users typically require transportation to reach varying destinations. The strategic targeting of individuals in these specific locations can greatly enhance the effectiveness of a geofencing marketing campaign.

    4. Dunkin’ Donuts launched a program to evaluate the efficiency of utilizing geofencing around competitors’ establishments along with behavioral targeting for distributing coupons through mobile devices. The outcomes were encouraging, as 36% of individuals who clicked on the offer responded by taking some additional action, with 18% of them saving the coupon, and 3.6% of secondary actions resulting in coupon redemption.

    Overall, these examples show how geofencing can be a powerful tool for retailers looking to drive foot traffic and boost sales by delivering personalized messages and offers to customers when they are in close proximity to their stores. By leveraging the power of location-based technology, retailers can create a more engaging and relevant shopping experience for customers, ultimately leading to increased revenue and loyalty.

    Are there any potential drawbacks or challenges to using geofencing for marketing purposes?

    While geofencing can be an effective tool for retail marketing, there are also potential drawbacks and challenges to consider. One challenge is that customers may find it intrusive if they receive too many notifications or offers while they are near a store. This can lead to a negative perception of the brand and decrease customer loyalty.

    Another challenge is ensuring accuracy in the location tracking, as inaccurate location data can result in sending notifications to customers who are not actually near the store, leading to frustration and a loss of trust.

    Additionally, some customers may be uncomfortable with the idea of being tracked and having their location data collected by retailers. It is important for companies to be transparent about their data collection practices and provide opt-out options for customers who do not wish to participate.

    Lastly, implementing geofencing technology can be expensive and may require a significant investment in resources and infrastructure. Retailers need to carefully consider the potential return on investment before deciding whether to implement this technology.

    Overall, while there are challenges and potential drawbacks to using geofencing for marketing purposes, the benefits of delivering personalized messages and offers to customers when they are near a store can outweigh these challenges if implemented correctly.

    How do you measure the success of a geofencing campaign, and what metrics should be used?

    Measuring the success of a geofencing campaign can be done through various metrics. One important metric is the number of people who received notifications and offers through geofencing technology. This can be tracked using location data and can give an indication of how many potential customers were reached.

    Another important metric is the click-through rate, which measures how many people actually clicked on the notification or offer and took action, such as visiting the store or making a purchase. This metric shows the effectiveness of the messaging and offer in driving customer behavior.

    Retailers can also measure the return on investment by comparing the cost of implementing the geofencing campaign with the revenue generated from customers who received and acted on the notifications or offers. This can give a clear indication of whether the campaign was profitable and worth the investment.

    Additionally, tracking customer engagement and loyalty can also be useful metrics in measuring the success of a geofencing campaign. By analyzing repeat visits, purchase history and other metrics, retailers can determine if the personalized messaging and offers delivered through geofencing technology have contributed to increased customer loyalty and engagement.

    Geofencing marketing has emerged as a powerful tool for retailers looking to boost sales and engage with customers on a deeper level. By creating virtual boundaries around retail locations, businesses can send targeted messages to potential customers in the area, driving foot traffic and ultimately increasing revenue. Geofencing marketing also allows retailers to collect valuable data on customer behavior and preferences, which can be used to personalize future marketing efforts.

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    Brian Hughes

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  • The CEO of Whole Foods Shares the 9 Tips That Help Him Run His Company for the Greater Good | Entrepreneur

    The CEO of Whole Foods Shares the 9 Tips That Help Him Run His Company for the Greater Good | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Imagine running a world-famous company, one that you know many people depend on daily. How do you scale the business without compromising the values that inspired its start in the first place? For my latest Leadership Lessons episode, I had the chance to talk to the CEO of a multinational supermarket chain synonymous with the words healthy, local and organic: Whole Foods Market‘s CEO Jason Buechel.

    I picked his brain about what it’s like to oversee more than 100,000 Whole Foods Market employees across 535 stores in the U.S., Canada and the U.K.

    Buechel joined the Austin, Texas-based chain in 2013 as global vice president and chief information officer. He later served as chief operating officer and provided operational leadership over the grocery chain’s 500-plus locations.

    Before Whole Foods Market, Buechel was allowed to soak up knowledge and experience as the managing director/partner within Accenture’s Retail Operations Practice, where he worked with leading retailers on strategic business and technology transformation.

    Throughout our talk, it was abundantly clear that Buechel serves as a champion of Whole Foods Market’s culture and values and is committed to increasing access to local, quality food for the communities it serves. Here are nine invaluable lessons Buechel shared with me during our conversation:

    1. The sky’s the limit when you’re following your passions

    And that means not focusing on the things you want to say, but rather on the things you need to hear. Try to understand the scenario at any given moment, and don’t allow for any misinterpretation on your part when it’s your time to talk.

    Related: How One Leader Has Persevered Through 20 Years of Change in the Travel Industry

    2. Understand the vantage point of each stakeholder, and find a balanced approach

    All stakeholders want to be involved. Let them in on the challenges you face so they can help develop or contribute to a solution.

    3. Allow team members to let you know they are connected to the mission and help shape the culture

    Promote a culture of co-creation with team members at all levels, and work to cultivate a culture that supports and promotes connection to a higher purpose and core values. In the case of Whole Foods Market, that’s being store-centric.

    4. Be patient in your 20s

    It’s not a race. Buechel told me he finished college in three-and-a-half years because he thought he was ready to be done and join the workforce. Looking back, he says it’s a benefit to soak up what people are inclined to offer you in your 20s. Be a sponge, and absorb everything worthwhile from everyone you know.

    Related: Not Every Leader Has to Be Steve Jobs, And 9 Other Pieces of Advice from Redfin CEO Glenn Kelman

    5. Make sure you have a rich life outside of work

    Don’t allow the paper cuts of making personal sacrifices for work to add up to regret when it comes to the decisions you’ve made. You only live once. Don’t trade off on things that are fleeting: Work will always be there.

    6. Never stop taking risks professionally

    Switching jobs, changing clients and taking risks are all uncomfortable, but if you’re not pushing boundaries you’re never going to know your fullest potential.

    7. You won’t realize how much stronger your power to communicate as a CEO is until you’re there

    When you become the leader of an organization, your power of communication is hugely increased in ways you won’t fully understand until you’re actually in the driver’s seat. When you do realize that, you can take the organization anywhere.

    8. Co-create what you’re looking to put into place

    Have a team to build your company with, and move those people along with you. You’ll find that driving change will be difficult otherwise.

    Related: How This Tech Leader Found Her Voice and Took the Reins of a Major Company

    9. Don’t overthink the end goal

    Buechel’s message to future CEOs is that if you do all the right work, grow yourself and support your team, good things will happen. It’s not going to be a linear experience. Zig-zags are inevitable. So get comfortable with being uncomfortable.

    For more from my hour with Buechel, watch the full webinar here. The growing collection of episodes from our series gives readers access to the best practices of successful CEOs from over 30 of the biggest brands, including Wayfair, Redfin, Booking.com, Heineken, Headspace, Zoom, Chipotle, Warby Parker and ZipRecruiter, to name a few.

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    Jason Nazar

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  • Here’s What Bed Bath & Beyond’s Bankruptcy Means for Retail | Entrepreneur

    Here’s What Bed Bath & Beyond’s Bankruptcy Means for Retail | Entrepreneur

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    Bed Bath & Beyond filed for bankruptcy on Sunday, and it suggests a bleak future for brick-and-mortar retailers.

    New research from investment bank UBS estimates that 50,000 retail stores out of the 940,000 currently operating in the U.S. will close their doors by 2027 (not including gas and food-service stations), Yahoo Finance reported.

    Related: Bed Bath & Beyond Plans to Raise Over $1 Billion to Pay Debts and Avoid Bankruptcy

    “While there was a pause on store closures over the last few years, we believe this activity is set to sharply accelerate moving forward,” UBS retail analyst Michael Lasser said.

    Several factors will contribute to the eventual mass shuttering, including decreases in consumer spending and available credit, and increases in the penetration of retail shopping and cost to run retail stores, according to Lasser.

    The pandemic was also harder on Bed Bath & Beyond than it was on its competitors, owing to the company’s decentralized system and less developed ecommerce technology, The New York Times reported.

    Related: Bed Bath & Beyond Is Shuttering Hundreds of Stores — Here Are the Much-Loved Retailers Ready to Move In

    Per Lasser’s calculations, if 50,000 stores close within the next five years, and the average sales per store is $5.7 million, that will leave $285 billion in retail sales “up for grabs” — giving major competitors better-positioned for online shopping the chance to capitalize big time.

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    Amanda Breen

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  • 4 Essentials for Selecting the Perfect Business Real Estate | Entrepreneur

    4 Essentials for Selecting the Perfect Business Real Estate | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    You’ve heard the old saying, “You can’t judge a book by its cover.” Actually, that’s not always true; customers judge a book by its cover all the time. In many cases, your business’s real estate and its curb appeal are the first messages being sent. Do customers notice your establishment? Do they understand the business by looking at it from 500 feet away? Is its image compelling?

    That’s why the right real estate is often the first marketing tactic to consider — certainly for any retail or restaurant enterprise. If you don’t stand out, even on the busiest roads, you’re in trouble. That’s in part why, at Fransmart, we include marketing plans in the real estate approval process, because once a lease is signed on a bad property, it’s too late to fix.

    And here’s a chance to learn from my mistakes. Early in my career, I was opening a restaurant in Silicon Valley and secured a site directly across from Google’s headquarters. I was elated: The property tested off the charts in terms of population density and disposable income. What could go wrong?

    Here’s what we never considered: Google feeds their employees for free — employs world-class chefs to make incredible food throughout the day. We had direct access to one of the largest workforces in the country, and couldn’t break through because none of them were hungry. Dumb mistake.

    A bad site can never be cheap enough, while good sites pay you, so take your time to thoroughly vet locations, including carefully assessing the trade areas and traffic patterns at different parts of the day (and on several different days).

    A few other critical factors to keep in mind before locking your brand into its next location.

    Related: How AI Will Transform the Real Estate Market

    1. Access

    Most first-time business owners don’t realize that there are two sides to every street: a breakfast side and a dinner side. Starbucks, for example, is precise with placement — often sitting on busy roads that lead directly to freeways, and always on the side of the road that leads to the freeway in the morning. If your business isn’t positioned to take advantage of a target demographic while they’re on the road, then you’ve set it up for failure. Also, customers prefer right turns over lefts, and if a site requires a left turn to access, it better be a well-lit one.

    Lastly, with the rise of third-party delivery apps, a site must be convenient for delivery drivers and take-out orders. The wrong property could cause a logjam in the parking lot, causing customers and delivery drivers to avoid it.

    2. Visibility

    My business is located on a busy street in Scottsdale, Arizona named Scottsdale Road, with more than 50,000 cars traveling each way every day. Your business is a free billboard on such busy roads, so make sure the location stands out. Think about the streets you normally drive on, now try to remember which brands on them you recall (likely a small percentage).

    Know the area where you’re opening like the back of your hand. What are the traffic patterns and major landmarks? Placing your business where it can be seen by the most possible people should always be the goal.

    Also, consider orientation. The building should be oriented so that its branding is clear and easily seen. (Being in front of a strip center’s entrance would be a goal, for example).

    Related: 4 Reasons New Franchisees Fail (and How to Succeed)

    3. Co-tenancy

    There’s a potentially fatal incongruity in, say, placing a high-end hipster café in a K-Mart-anchored shopping center. A brand needs to be congruent with nearby businesses. It’s not enough to simply be in a strip center, busy mall or crowded airport.

    Certainly, the evolution of outdoor malls or other shopping centers has opened opportunities for restaurant and retail franchises to find a home, but the downside is that competition has never been higher. So, finding the right spot with the right co-tenancies is a strategy you need to master. Centers with landmark retail anchors like Whole Foods, Home Depot or AMC Theaters are perfect — typically attracting large, diverse crowds of potential customers.

    4. Parking

    Your building can look incredible, but if you don’t have the space to accommodate visiting traffic, you’re doomed. With the rise of delivery and take-out orders, having parking space to manage sudden influxes (such as heavy dinner rushes) is essential, and properties should be planned accordingly.

    Keep in mind, too, that structured parking is a restaurant killer: It’s hard to navigate, often crowded and a hotbed for accidents and car damage. What’s worse — the common perception is that garages are unsafe: dense, dark and out of view of the public. Deliveries are also exponentially more difficult if you rely on them. Surface parking, by contrast, offers quick access and easy visibility.

    Related: 5 Mistakes Franchisees Make When Looking for Business Real Estate

    One last tip: If you’re renting in a shopping center or outdoor mall, finding space near a business with a different rush period can make all the difference. If the bulk of your business is done in the evening, finding a site near a coffee shop or breakfast restaurant can be a boon for parking.

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    Dan Rowe

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