But the market is competitive. Not only do small retailers need to compete with the chain stores and Amazon, they also need to compete with each other.\u00a0<\/span><\/p>\n\n With such intense competition, both online and offline, it\u2019s more important than ever for small-to-medium retailers to know how they\u2019re performing relative to their competition.\u00a0<\/span><\/p>\n Armed with the information in this report, retailers can take proactive steps to grow their businesses in this thriving environment and beat their competition.<\/span><\/p>\n\n Become<\/a> conducted a report using data from over <\/span>2,000 retailers across the U.S. over a two-year period (2017-2019) to give retailers insight into their industry. How does your business measure up?<\/span><\/p>\n\n A key indicator of business performance is monthly revenue. But it\u2019s also important to look at other factors such as cash flow and credit score.\u00a0<\/span><\/p>\n\n With so many types of retailers across 50 U.S. states, it\u2019s not accurate to simply lump all retail businesses together. For this reason, in this report, we\u2019ve segmented our study and broken it down based on multiple factors, including retailer type and location.<\/span><\/p>\n\n According to the data that Become collected from over 2,000 US businesses, it looks like retailers aren\u2019t doing too badly!\u00a0 The statistics also reveal some unexpected surprises.<\/span><\/p>\n\n Surprisingly, Colorado, Arizona and Florida are the top 3 US states for retailers in terms of average monthly revenue.\u00a0<\/span><\/p>\n\n Below you\u2019ll find a USA map indicating the average monthly revenue of retailers per state. This can help retailers assess the revenue earning potential in their state.\u00a0<\/span><\/p>\n And the top 6 states by revenue…<\/p>\n It\u2019s interesting to note that Colorado and Arizona surpassed even California and New York. The average monthly revenue for businesses in Colorado is $54,644. This state is an attractive place in general to start a small business and came in at ninth place in<\/span> CNBC\u2019s 2019 America\u2019s Top States for Business<\/span><\/a>, which ranked states based on across 10 broad categories including: economy, workforce, cost of doing business, infrastructure and more.\u00a0<\/span><\/p>\n The top types of retailers in Colorado based on average monthly revenue are:\u00a0<\/strong> The average monthly revenue in Arizona is $46,557 with the top retailer types being:<\/strong> In Florida, the average monthly revenue for retailers is $42,959. Top retail performers are:<\/strong><\/p>\n You\u2019ll notice that e-commerce is the industry leader in both Colorado and Arizona, but doesn\u2019t feature in the top 3 retail types in Florida.\u00a0<\/span><\/p>\n\n Based on the <\/span>Become<\/span><\/a> study, 39.44% of US retailers are fashion, clothing, sports stores, 27.12% are e-commerce businesses and 11.15% are groceries, supermarkets and bakeries.<\/span><\/p>\n\n This indicates that although online shopping is growing, consumers still enjoy the in-store experience, particularly when it comes to trying on clothing. To optimize retail sales, a retailer could sell both online and in-store.<\/span><\/p>\n Nationwide, Grocery, Supermarkets and Bakeries earn the highest monthly revenue at $40,122. This is followed by E-commerce ($31,313), and then Fashion, Clothing, Sports Goods ($27,744). Grocery stores rely on volume to make money, as the <\/span>profit margins are very low<\/span><\/a>, ranging from one to three percent.\u00a0 We might expect the gap between e-commerce and traditional retail channels for fashion, clothing and sporting goods to increase as more and more shoppers spend online, but industry trends tell a different story.\u00a0<\/span><\/p>\n\n Retail has gone through many changes over the past decade, with the advent of the internet and technology. Not only have retail channels, processes and payment methods changed, but customer expectations have changed along with it. So to succeed as a retailer, it\u2019s not enough to rely on old tried-and-tested methods – those who do not evolve do not survive.<\/span><\/p>\n\n Despite all the chain store closures of early 2019, retail is on the upswing. According to the <\/span>National Retail Federation<\/span><\/a> (NRF), for every company that closes stores 5.2 are actually opening new stores.\u00a0<\/span><\/p>\n\n In February 2019, the NRF predicted that <\/span>US retail sales would increase by 3.8%-4.4% in 2019<\/span><\/a>, exceeding the $3.8 trillion mark. The increase could be attributed to high consumer confidence, an improvement in wages and low unemployment rates in the US.\u00a0<\/span><\/p>\n\n The alleged \u2018retail apocalypse\u2019 punted by the US Retail Census Data <\/span>does not paint the full picture<\/span><\/a>, based on the NRF\u2019s report. E-commerce and instore are not mutually exclusive and should not be separated as such. Based on a JLL Research report, it\u2019s estimated that <\/span>850 physical stores<\/span><\/a> will be opened by ecommerce stores over the next 5 years. There\u2019s significant overlap between online and physical retail which cannot be ignored.<\/span><\/p>\n\n Even Amazon has realized the importance of a physical storefront and creating a memorable customer experience, and as a result opened up Amazon Go.\u00a0<\/span><\/p>\n\n Nearly 12.5% of all US retail sales will be online by 2020. Almost <\/span>70% of Millennials prefer to shop online<\/span><\/a>, so if you\u2019re not selling online as well as in store, then you\u2019re missing out on a large and influential consumer base. And let\u2019s not ignore mobile. According to data provided by <\/span>Pew Research<\/span><\/a>, over 80% of Americans own a smartphone.<\/span><\/p>\n\n It\u2019s clear that a blended approach is the way of the future. For small retailers, it is essential to differentiate and maintain their niche, while at the same time opening up new consumer channels by going online. And online stores should consider opening up a physical storefront, thus approaching customers from all angles.\u00a0 Surprisingly, <\/span>98.6% of all US retail businesses<\/span><\/a> are small retailers with less than 50 employees. According to <\/span>SCORE<\/span><\/a>, Amazon is accountable for a mere 5% of all US retail sales so clearly even small mom-and-pop stores have something unique to offer that even Amazon cannot compete with.<\/span><\/p>\n\n Tips for retailers on how to compete with Amazon:<\/strong><\/p>\n\n Now that you know you\u2019re in this niche that has the capability to offer what Amazon cannot, need to make sure you remain competitive amongst your competitors – your fellow small retailers. The first step to beat your competition is to know how they\u2019re performing.<\/span><\/p>\n Key measurements of a retail business\u2019s health are:<\/span><\/p>\n In terms of business health, liquor stores appear to perform well – they have the highest monthly revenue, bank account balance and credit score. This is interesting as a liquor store isn\u2019t generally considered a cash cow. Next in line are building material stores, which also generally perform well on these three criteria.<\/span><\/p>\n\n If you can improve your business\u2019s monthly revenue, cash flow and credit score, you\u2019re likely to become a healthy retail business, well-positioned against your competition.<\/span><\/p>\n\n Be it trying to bring more customers through the door of your store or more traffic to your website, increasing your numbers can increase your profits but how do you do this? This depends on your industry but it boils down to \u2018you have to spend money to make money\u2019. Be it jazzing up your store and serving higher quality products or investing in some paid ads for your social media to gain more exposure (and ultimately leads and customers).\u00a0<\/span><\/p>\n Tips to increase your customer base:<\/b><\/p>\n Your goal is to try and make each and every customer purchase more, otherwise known as \u2018upselling\u2019. Going back to the store example, if a customer comes in and buys jeans, upselling would mean offering them shoes, a top and an accessory – the more they purchase the merrier.<\/span><\/p>\n Tactics to upsell include:<\/b><\/p>\n In other words, try to get your customers to purchase from you more often. Just because a customer bought your product or service, doesn\u2019t mean that they will do so again. You need to find a way to keep them coming back for MORE using one or more of these strategies:<\/span><\/p>\n Doing this will mean that you’re able to collect more revenue from your purchases giving you more revenue for the same amount of effort. This is a game of push and pull, where you’ll have to learn from your customers where the boundary lies. You don\u2019t want to hike up your prices so much that it\u2019ll make your customers go running, but rather a small increase to see if you meet resistance.<\/span><\/p>\n Find your point of resistance:<\/b><\/p>\n If you slightly up your prices and none of your customers so much as bat an eyelid then you know you are in the safety zone. You can try doing this every few months to find where you meet resistance – where customers either complain or the stats show they are dropping off. For this reason, you should only ever change your prices subtly. When you find the \u2018point of resistance\u2019 so to speak, you\u2019ll know you need to lower them a notch and you\u2019ve found your happy balance.\u00a0\u00a0<\/span><\/p>\n\n Knowing how to manage your business\u2019s cash flow is extremely important for keeping your financials in check and allowing your business to evolve. If you\u2019re noticing lags between the times that you have to pay your bills, suppliers, and employees and the time you collect the cash from your customers, then you\u2019re not alone. Knowing how to manage your cash flow, be it by delaying the spending of cash, or speeding up your incoming payments is something that every successful business must learn to do effectively if they wish to survive (and hopefully thrive!).<\/span><\/p>\n \u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n Here we\u2019ll detail how to manage your cash flow efficiently to improve your finances…<\/b><\/p>\n Before we get to <\/span>improving your cash flow<\/span><\/a>, you\u2019re going to need to know exactly what you have to deal with. You\u2019ll need to make a good forecast for the foreseeable future:<\/span><\/p>\n Your receivables cover the amounts owed to your business, otherwise known as your assets. In an ideal world, you\u2019d get paid for sales the very instant that you make them, but the world isn\u2019t always ideal…<\/span><\/p>\n Here are some specific techniques on how you can improve the speed at which you receive your receivables:<\/span><\/p>\n This report was created by analyzing the data of over 2,000 small-to-medium retail businesses that applied for funding through Become\u2019s business funding marketplace from 2017 to 2019. These businesses are based across the US.\u00a0 Based on the data provided, how does your business measure up? Follow the tips provided to improve your cash flow, monthly revenue and credit score, and consider going online if you\u2019re a physical store. Keep on top of consumer and industry trends and 2020 may just be your best year yet.<\/span><\/p>\n\n![\"Retail](\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2019\/12\/boxed-text-2-1.png\")
<\/p>\n\nRetail Report Key Findings<\/h2>\n\n
Which is the Best State for US Retailers?<\/strong><\/h3>\n\n
![\"US](\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2019\/12\/US-map-1.png\")
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<\/p>\n\nWhat are the Best Retail Types in the US?<\/strong><\/h3>\n\n
![\"\"](\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2019\/12\/Component-12-2-2-300x135.jpg\")
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Which Retailers Earn the Highest Revenue?<\/strong><\/span><\/h3>\n\n![\"\"](\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2019\/12\/Frame-3-1-300x220.jpg\")
<\/span><\/p>\nSetting The Scene: Retail Industry Trends & Stats<\/h2>\n
<\/b>A New Era of Retail<\/strong><\/h3>\n\nRetail\u2019s Booming, Not Just E-Commerce<\/strong><\/h3>\n\n
<\/span><\/p>\nDavid vs Goliath in Retail\u00a0<\/strong><\/h3>\n\n
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![\"Financial](\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2019\/12\/financial-health-table-1.png\")
<\/p>\n\nHow to Improve Your Business\u2019s Monthly Revenue<\/h2>\n\n
1. Increase your number of customers<\/b><\/h3>\n
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<\/span><\/li>\n<\/ul>\n2. Increase your average transaction size<\/b><\/h3>\n
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<\/span>\u00a0<\/span><\/li>\n<\/ul>\n3. Increase purchase frequency<\/b><\/h3>\n
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<\/span><\/li>\n<\/ul>\n4. Raise your prices<\/b><\/h3>\n
How to Improve Your Business\u2019s Cash Flow<\/h2>\n\n
Measure<\/b><\/h3>\n
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<\/span><\/li>\n<\/ol>\nIncrease Receivables<\/b><\/h3>\n
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<\/span><\/li>\nMethodology<\/h2>\n\n
<\/span><\/p>\nHow Does Your Retail Business Shape Up?<\/h2>\n\n