So, you want to open a new camera store? Or maybe you are considering taking over an existing business? However, you’ve been told that camera retail is on death row and Amazon and B&H are the executioners.
We watched big names like Ritz Camera, Kmart, Sears, J.C. Penney, Ann Taylor, Gap, Banana Republic, Gymboree, Teavana, Michael Kors, Bebe, Perfumania, The Limited, Staples and more close stores. In fact, 2017 set the all-time record for store closings, with more than 6,700 stores saying “no mas.” That beat out the 6,163 closings in the financial disaster of 2008.
I think we can all agree that running a successful camera store can’t be done. Moreover, it would be foolish to engage in such an entrepreneurial enterprise.
Well, I don’t agree at all.
When I opened my New Jersey camera superstore in 2008, just months before the financial meltdown of that same year, people laughed at me. They thought me a fool and a sure failure. The number of camera stores in the U.S. had gone from more than 10,000 to a few thousand to just a few hundred. Furthermore, the camera business was being killed by smartphones. And the largest electronics and camera store in the world was just a few miles away across the Hudson River in New York City.
However, with a little imagination and some luck, within a few years we were one of the largest single-location camera stores in the country. Moreover, we were chosen as camera store of the year in 2008 and 2013. I had reinvented the camera store business model and, as a result, we found big success. I got to live what most entrepreneurs dream of: exiting the business with a big check in hand and being selected as the photo industry’s person of the year in 2016.
To share some of my strategies, I’ve listed a few of the camera retail store dos and don’ts that I learned along the way. These tenets made my store successful even during the most difficult of times in a highly competitive and declining industry.
● Don’t sign a long-term store lease, even if it seems like a great deal, until you are 100% sure your location and space are great and adequate for growth. A bad rental deal is the number one killer of retail stores.
● Do carefully calculate the ability of your store to make enough profit to easily cover the rent expense. This requires a careful calculation of sales (profit) per square foot of retail space, the number of salespeople you can utilize (including labor cost) in that space, as well as how much of your inventory you can display (and inventory).
● Don’t pick a store location just because you “like” it or because you get a great rent deal. As an example, if you are a high-end product or service store located in a mall or location where all of the nearby stores are of the discount type, you are likely in the wrong location.
● Do analyze carefully the amount and kind of traffic that will go by your store. A few years back, I considered a big mall location for a satellite camera store and spent several days and evenings just watching the traffic. I had the mall’s traffic stats, but the particular location of this store was such that it got very little flow.
● Don’t think that running a retail store is a five or six day a week, 9–5 job.
● Do prepare to work seven days a week and long hours, especially when you first open. You will need to learn every inch and ounce of your own business. It’s the only way you can know how to modify your business model if necessary, manage the store and hire people to manage it in the future.
● Don’t just put up a store sign, place merchandise on the shelves, run some ads and some sales promotions and expect to succeed. In today’s world, it’s most likely anything you are selling (even a service) can be bought online. Or from another retailer who is already established.
● Do create a great experience for the customer. This includes how merchandise is displayed, store smell (yes smell!) and cleanliness, attitude and knowledge of staff, as well as providing customers with the information they can’t get online. In my camera store, we ran photography classes, only professional photographers worked the sales counters, and we had a gourmet coffee bar (great for smell). I also hired a trendy interior designer to help me make everything look amazing.
● Don’t think because you have a great-looking store, in a great location, with great prices you’re assured of success. Bad customer service will get you an indelible scarlet letter on your Internet reviews and your reputation will be ruined. Five satisfied customers will tell one new one about your store. One dissatisfied customer will tell five others that you suck.
● Do train your sales staff on how you expect customers to be treated. The owner or manager of the store needs to set the example of how to do it. There are many great articles on how to do customer service right. Read some of them and make them the habit of your store.
● Don’t price merchandise in your store too low. Yes, I wrote “too low.” If you follow all the tips I listed above, you should be able to price your goods and services in a way that you can make money. Don’t price too high either. While this may be obvious, it needs to be said. Unfair pricing will get you a reputation that will surely doom your store.
● Do research the Internet price and local price for your goods and services. Carefully plan a pricing strategy that maximizes your profit while balancing sales and customer satisfaction. If you do the right things, customers will gladly pay you more than the price they find on the Internet. Smart pricing is something that will require daily planning, observation and experience to maximize success.
Camera retail can be a successful and rewarding experience, both financially and emotionally. But you do have to be smart, clever and imaginative in today’s challenging business environment. I have only listed some of the best practices here that I have learned in my retail experience. So please reach out to me if you have thoughts or comments or would like some additional suggestions. I am glad to help any camera retailer trying to make it big.