12,804 retail businesses closed in the UK last year, with forecasts suggesting the number of closures could reach 17,000 in 2025.
With business closures continuing to rise, the experts at insolvency practitioners Liquidation Centre were eager to provide essential insight on the most common mistakes leading to retail business closures and how to avoid them.
Five scary mistakes retail businesses make just before closing
1. Neglecting customer service and feedback
Providing excellent customer service is amongst the most integral parts of running a successful retail business, which is why it might come as no surprise that neglecting this area is one of the scariest mistakes made before a retail business closes down. Paying attention to feedback from customers can help a business identify the areas where it needs to improve, so it’s important not to dismiss it. Unhappy customers can quickly express their dissatisfaction on social media, leading to a drop in sales and a loss of potential new customers.
Ensuring staff are trained properly so they can provide great service and efficiently resolve customer queries can have a great impact on the success of a business. Happy customers tend to come back and recommend businesses to other people, so excellent customer service is a must.
2. Failing to have a clear marketing strategy
Among the biggest mistakes a retail business can make is not having a solid marketing plan in place, as that can lead to loss of customers and lack of sales. Identifying the target audience and their media habits is essential for building an effective marketing strategy.
What is more, making use of data analytics can provide further essential insight into audience behaviour, helping to create well-executed marketing campaigns that reach the right people and drive results.
3. Not managing inventory correctly
Inventory management is absolutely essential for a retail business, making poor management a major mistake. Not keeping on top of inventory can lead to a loss of potential customers due to understocking or further financial losses because of overstocking.
An inventory management software might be the optimal solution, as such systems help businesses monitor stock levels, track supplier orders, and manage fulfilled orders, reducing the risk of both under- and overstocking products.
4. Ignoring market trends
Market trends provide essential information about what customers are currently on the lookout for. Failing to stay informed about these trends can lead to customers turning to competitors who offer the products or services that are in demand.
A regular analysis of market trends is key, as it allows a business to stock both popular and currently trending items to appeal to a wider variety of clients, and ensure consistent sales.
5. Overlooking tech updates
Advancements in technology are greatly beneficial for a business’s efficiency and neglecting to implement them can be a serious, and costly mistake. Customer relationship management tools, point-of-sale systems and inventory management software are the basic tech services a business should be using in order to maintain success.
Implementing new tech can save time, boost efficiency and create a smoother, more satisfying experience for customers, helping a business stay ahead of the competition.
Richard Hunt, a spokesperson for insolvency practitioners Liquidation Centre, comments: “Maintaining a successful business is never easy, so the fewer mistakes business owners make, the better. Paying attention to your customer base, their wants and needs, is absolutely crucial because the success of your business depends on them. That and other essential bits, like keeping inventory, tracking bills and paying employees have been made easier nowadays due to new technology. Don’t be afraid to adopt new tech, as in most cases it will end up saving you time and resources. And even if you make a mistake, do your best to fix it, learn from it and aim to not repeat it.”