The retail sector is going through a booming phase as new technologies are making their way into the market. Retailers are trying to stay ahead in the competition by applying various new methodologies. The trends started with accepting Omni payments and went on to the application of Artificial Intelligence in Retailing. But now the latest hot inventions in the Brick and Mortar sector are Co-retail. If you have ever heard of co-working spaces, you might already have an idea about co-retailing as well. But if you are not familiar with either of these terms, don’t worry, we are here to explain it to you.
What is Co-Working?
Co-working is the term given to the sharing of an office environment by 2 or more entities. These entities could be individuals, or companies or a mix of both. In co-working, a third party lends some space to more than 1 entities and these entities then work out how they are going to share the resources as well as the rent. This has been a common trend among freelancers and startups as they tend to take less space than a full-fledged agency.
Now, this trend has spread its roots in the retail industry as well and that’s our topic of discussion today.
Co-Retailing
Co-retailing is almost similar to co-working but instead of sharing an office space, these entities share a shop or retail store with one another. For example, if you are looking to set up a perfume store, you won’t mind it sharing your place with an apparel brand. So you can both share each other’s customers without interfering with one another’s market.
Co-retailing is a great phenomenon as it gives you an opportunity to extend your current customer base while cutting your on-going costs in half.
Importance of Co-Retailing
The concept of cooperative retailing is a boon for small retailers as it helps them to start their business at the lowest cost possible. The sharing of resources such as the business space, stationery, containers, and components helps them cut the startup cost as well as the running ones. If a business needs less space than what they have in hand then, renting your space for co-retail can also provide you with an additional source of income too.
These had been multiple instances where co-retailing increased the overall sales of both parties by more than 100%, i.e., had them double in less than a month. But there are certain factors that you have to keep in mind while going for Co-retailing. These factors can define everything from your needs to the chances of your success in the same.
Some major hurdles you have to clear while starting your co-retail business are:
Choosing a correct partner
Having a correct partner for your co-retail business is extremely important because sharing your commercial space is like sharing your second home with someone. Choosing a wrong partner can cause some permanent damage to your business reputation. So, you should consider the following points while choosing a partner for your co-retail:
- First, you should understand what type of business he or she does and what will be the core benefits you can share with them.
- Run a detailed background check to see if there have been any past cases of insubordination in their firm.
- Meet their team and see if you can coexist with them under the same roof or not.
- Analyze their customer base and market and see if you both can profit from each other’s company or not.
- Check what are the possible cons of having your business at the same place.
After checking the following factors, you can choose the perfect partner for your cooperative retail with ease and clear the first hurdle in increasing your business opportunities.
Negotiating the lease agreement
Now that you have chosen your co-retail partner, it’s time to discuss the agreements and payment policies for the working space. These agreements should be read and understood very thoroughly as your business will depend on it until the date you decide to shift anywhere else. The agreements contain a lease, partnership, distribution of other charges, etc like documents.
Take care of the following points while reading and accepting the terms and conditions of the agreement:
- Check if the share of rent you are giving is in accordance to the exact space you are using. You should not be conned for spending extra for extra space you won’t even use.
- Consult a lawyer and an accountant before signing the deal.
- See if there are any hidden charges applicable in the agreement.
- Check if the owner of the space if legally entitled to rent it or not. Illegal renting will make your business practices illegal as well.
- Keep a copy of the agreement with you.
After doing all these steps, you can now legally move in your business in the rented place with your co-retailer.
Maintaining a unique identity
Co-retailing has a very drawback in comparison to the advantages it gives to the retailers but one thing that less rarely happens in the co-retail market is the identity loss of business. When you share your space with someone else, it’s difficult to keep your name separate that your co-business’. You have to maintain an undisputed identity event. If you start co-retailing with a hundred more business because that’s a prime part of your dream. You can make sure to follow these steps to keep your identity unique:
- Never co-retail with something that could potentially cut your market and customers.
- Find ways to create a lasting impression on your customer’s mind.
- Choose a specific theme to highlight your area differently.
- Maintain your order and rules even after starting co-retail as it gives your brand a unique identity too.
Having combined marketing effort
Marketing is also a very important part of any business’s growth but its importance increases even more in the co-retail sector. You and your partner in space have to make combined efforts to make your place compete with others. This marketing can do various things from keeping your places busy increasing your revenues too.
Although there are a lot of ways you can choose to market your product or business, some of the most common yet effective ways to do the same are:
- Try to set your claws in online marketing as it is the most effective type of promotion now.
- Use billboards and digital signage to make custom designs and show your brand identity.
- Create custom deals with your co-retailer to benefit each other’s customers as well.
- Give each other tips and feedback on each other’s promotional methods.
Cost management
While sharing your space with your co-retailer, there is one more thing you share automatically, and that is the cost of running your co-space. The capital used in your business space is shared by you and your co-op business, but there are some things to keep in mind while sharing the cost and having an agreement. These things are:
- Know exactly which things are you going to use and in how much quantity.
- Break your cost according to the consumption of both parties.
- Try to be as cost-efficient as possible.
- Use POS systems to save your space as well as cost.
- Never agree to share the cost of something that you are not looking to use.
Choosing the best billing method
Last but not least comes Billing. Having a co-retail space also means you have to cut your queues by a long margin to fit both your customers as well as your co retailer’s customers under the same roof. So, this last part comes down to how well you can manage your customers and their payments in your store. The one and only answer to this question is the use of the POS system. Choose your POS system according to your usage and these following features:
- Check if the inventory management is included
- Choose the plan according to your needs
- Go for MPOS system if you are looking to manage your space more efficiently
Doing co-retailing with other businesses has its own advantages as well, So…
These are some of the advantages:
- It is a cost-effective method to start a new business
- You can increase your customer base with sharing your customers with one another
- It helps you increase industrial contacts as well
- Combined marketing efforts from both parties can yield more traffic than alone
- You can get a better location to run your business in less money
So, this was a brief introduction to co-retailing from our side. There are a lot of topics that we haven’t covered under the article on topics such as how to choose your POS system, what inventory management skills you may need, etc. But this article will help you get a good enough idea about the Co-Retail and will help you set-up a co-retail environment with the business of your choice.
