Is now a good time to get into the retail industry? Given the headlines on the economy, you might be deterred by the retail market outlook, but there are business-focused figures that lend to this being an opportune time to launch a retail store franchise.
The Spice & Tea Exchange is a specialty spice and tea retailer that focuses on flavor. We also sell salts, honey, candles and gourmet accessories. With nearly 100 units across the U.S., we are well-positioned as a franchise opportunity because of some unique characteristics of our business model. Those features, plus a deep dive into the industry statistics, might just lead you to our front door!
Retail Industry News to Know
The National Retail Federation predicted that 2023 retail industry growth would climb above pre-pandemic levels. They also noted that the physical store still accounts for 70% of total retail sales and that retail remains the largest private-sector employer in the U.S.
More good retail news is supported by Statista, which reports that global in-store, that’s brick-and-mortar, retail is still the “primary point of purchase,” even with current online purchasing trends. Global in-store sales were $20 trillion globally, while online retail added $5.8 trillion. This shows that brick-and-mortar stores are still going strong, and the right retail store can do well even when people are being more cautious with their spending. Retail stores that provide an experience are doing even better than the norm.
Opportunities in Franchise Retail
A recent franchise retail industry report by Franchise Direct discusses the overall picture for retail franchising, noting that retail exists in nearly every franchise sector. Retail in franchising is complementary to that of non-franchising retail trends and overall outlook, and a 3% growth rate was predicted for 2023 when compared to the previous year.
A key note in this report is that there are plenty of competitors in the $130 billion retail franchising space, so having a good marketing strategy, which supports a strong and on-trend product selection is going to be important for success.
Launching Retail in a Challenging Economy
It’s not uncommon for aspiring business owners to shy away from launching a business when the economy is struggling. That might mean higher interest rates, increased inflation, or even media opinions on how world events impact the domestic economy. However, the important thing to remember is that throughout history, businesses have opened and thrived even in a challenging economy. Why were they successful despite the dire predictions? They had a good business model, and that’s where a franchise can shine.
Building a Solid Business Foundation
Faster Capital comprised a list of articles that featured the best tips for starting a business in a difficult economy. Here are some of the common pieces of advice that relate well to retail industry franchise opportunities:
● Have a plan. Franchises come with a plan on how your business will launch and operate, so it is easier to focus on the long term. Difficult economic times will pass, and if you’re already in business, you’re positioned to capitalize when the economy turns positive, while others who waited to start a business will be struggling to get established.
● Marketing strategy. Included in your franchise model is the marketing strategy, developed by professionals in the franchisor’s office. You have an expert marketing department at your fingertips with franchising, plus the collective buying power of a franchise network. Strength in numbers is an asset when compared with trying to market independently.
● Being competitive. Another buying power benefit of franchising comes from your supplier network. The franchisor can negotiate prices based on volume sales, leveraging all franchisees. That allows you to be competitively priced.
● Relationships matter. Franchising is all about relationships – with franchisees, with suppliers, and with customers. Franchisors have a strong communications strategy, and an outreach plan that keeps relationships building within the brand, and that keeps the brand building within the economy.
● Entrepreneur development. The franchise system is built to create entrepreneurs from scratch. If you have experience coming into franchising you can use it to your benefit, but if you’re new to business ownership, the franchise will teach you everything you need to know.
● Support network. With franchising, you’re never alone. The network of other franchisees, in addition to the franchisor’s support staff is important when challenges arise. Franchising has a support network in its DNA.
Why The Spice & Tea Exchange Works
The Spice & Tea Exchange is a tea franchise that sells spices, herbs, teas, spice blends, rubs, olive oils, and related products. We offer a full-service tea bar, recipe kits, gourmet gifts, and a line of wellness products.
The Fast Capital article also has other tips that specifically apply specifically to The Spice & Tea Exchange franchise. These are important characteristics to consider when choosing a franchise at any time. They often mean the difference between businesses thriving in a challenging time versus those that do not. They include:
● Price points. Even when people are careful about spending, they still spend, and the products we carry have a smart price point, so it feels like an indulgence without the cost. Enjoying a flavorful tea can be a calming moment in the day that is much needed in a stressful time.
● Diversification. There are two ways we diversify in our franchise. The first is through a varied line of products. The second is through the variety of sectors in which we appeal – traditional retail, health and wellness, and personal culinary experiences etc. We reach customers on several levels so we can offer multiple revenue streams.
● Niche market. One of the tenets of retail business is to have a niche in the marketplace and The Spice & Tea Exchange has carved out our spot as a specialty retail franchise.
● Investment level. Our brand allows you to start small and grow. When comparing our total estimated investment and the 70% gross margins, you can make a strong case for investment in our franchise system.
● Customer service. Building customer relationships is critical to building a business and is a core focus of The Spice & Tea Exchange. When times are challenging, people want to go places where they are made to feel good and valued. When you treat people well, they won’t want to go anywhere else, helping you build a strong core customer base that is resilient in challenging times.
Build Your Future with The Spice & Tea Exchange
People often wonder if there’s a right time or a better time to start a business. The answer to that is “when you’re ready to start the business.”
Whether the economy is thriving or struggling, a business that delivers on what people want or need always has the opportunity to be successful. A business is a long-term commitment and one that is more within your control than you might think.
If you’re thinking about owning your own business, request franchise information for The Spice & Tea Exchange and share your vision with us.
