This is a post by Alexandra Sheehan.
If you’re interested in retail, you’ve likely heard about the retail apocalypse. It seems that many are predicting the impending doom for brick-and-mortar retailers that will be overtaken by ecommerce. And while online shopping continues to grow in popularity, that doesn’t mean there isn’t room for physical retail.
In fact, one report from the IHL Group found that in 2017, there were more retail businesses opening their doors than closing them. The industry is ripe with opportunity for retailers who do it well.
That’s why if you’re thinking about getting into retail, recognize that *now* is still a great time to enter the industry.
Not sure where to start? Below, we’ll dive into 32 small business ideas in the retail space, ranging from high-level concepts to get you thinking to specific niches you might want to explore.
1. Combine two (or more) products/services
If you can’t decide between two ideas, or you want to carve a niche out in an existing market, you can look to combine different products and/or services. Container Collective Yoga & Bikes is a yoga studio that sells yoga products, plus a bike shop. Laughing Buddha Tattoo is a thriving tattoo and piercing shop that sells jewelry.
There’s also Hop Burns & Black, a craft beer, hot sauce, and vinyl records retailer.
2. Men’s grooming
Statistica data predicts the male grooming industry to be worth $29.14 billion by 2024 — up from $21.65 billion in 2018. It’s why we see online brands like Dollar Shave Club, Beardbrand and Harry’s reach popularity quickly. One thing brick-and-mortar retailers can do that those brands can’t is to create an immersive men’s grooming experience. Offer grooming services or consultations in-store and allow customers to touch, feel and smell your product to seal the deal.
3. Subscription boxes with a retail spin
Did you know that meal subscription box company Blue Apron was the No. 1 fastest-growing retailer in 2017? And it’s not the only subscription-based model that’s making a footprint on the retail industry. Companies like Birchbox and FabFitFun are becoming household names. Plus, Harvard Business Review reports that the industry has grown 200% annually since 2011, reaching more than 11 million U.S. subscribers.
And just because most subscription boxes are online doesn’t mean they always have to be — and this means you have a real opportunity to stand out. Set yourself apart from your ecommerce competitors by allowing customers to try out the products or assemble their own boxes in-store.
Birchbox does this really well. It’s SoHo location, for example, has a “Build your own Birchbox” area, where shoppers can handpick the items that would go into their boxes. The store also offers in-store beauty services, and the occasional perks — like champagne while you’re shopping.
4. Health and wellness
My Total Retail found health and wellness to be an extremely lucrative industry for retailers — it’s a nearly $4 trillion industry. In the U.S. alone, consumers spend $200 billion on wellness tourism and have more than 50 million gym memberships. The numbers prove it: We’re willing to fork over cash to help meet our health and wellness goals. To stand out in this market, the key is to show how your products help your customers achieve their goals better than your competitors’.
5. Pot shops
As both medical and recreational marijuana have gained traction in North America, especially with Canada fully legalizing recreational use, retail opportunities abound for entrepreneurs. Act quickly though, as you’ll want to get your foot in the door before the market becomes oversaturated.
One example of a thriving pot shop business is MedMen, which has a growing number of dispensaries in California, Nevada, and New York. MedMen is doing an excellent job modernizing the cannabis industry. Their stores feature sleek designs (not unlike Apple stores) and they employ welcoming and knowledgeable associates who are ready to educate shoppers and help them decide on which products to buy.
6. Cannabis-adjacent businesses
Much like marijuana is opening the door for dispensaries and pot shops, it’s also creating new business opportunities for cannabis-adjacent businesses. This includes vape shops, glass shops, and marijuana-inspired artwork and clothing.
7. Food truck
One ideal thing about opening a food truck is the startup cost: It’s far more feasible than opening a permanent restaurant. Plus, MobileCuisine.com reports that the food truck industry jumped from $803.8 million in revenue in 2014 to $1.2 billion in 2015.
Being mobile means you can serve a more geographically diverse clientele — and if one location doesn’t make you any money, you’re not stuck with it. Check out how All American Dave launched their successful food truck business.
8. Mobile clothing boutique
Speaking of, fashion can be just as mobile as food. Fundera says that going mobile is one of the most profitable retail verticals. Le Fashion Truck is one cool example of a mobile clothing boutique. The unique business structure has garnered an engaged local following, plus attention from visitors to the Los Angeles area, where the shop is based.
9. Solve a specific problem
Do you or the people around you face a common challenge? Is there a small problem in your life that could easily be solved with a creative solution? Perhaps the easiest way to retail success is to create and sell a product that solves an unaddressed issue. Gossamer & Grace Bra Fit Studio founder Kelly Franko solved a unique problem: Women couldn’t find the right bra. So she opened a store dedicated to not only high-quality products, but also helping women identify which of those products are right for their specific needs.
10. Open physical doors to your online business
Already have an established online business? There’s a perfect retail business opportunity. Determine where your biggest clusters of customers are, and explore brick-and-mortar opportunities in those areas. Several successful ecommerce-first brands have taken this approach, including Casper, Warby Parker and Bonobos.
And if you’re not keen on jumping in with both feet, considering testing your brick and mortar concept using pop-up shops.
11. Create a co-op or community space
People like to be part of a group, and retailers have a unique opportunity to foster community through their physical space. Deep Roots Market is a grocery store that also has community space and hosts in-store markets with local merchants. REI charges co-op members a one-time $25 fee for lifelong benefits including discounts, exclusive sales and store credit rewards for qualified purchases. Or check out Pace Athletic, which fueled its growth by building communities.
12. Sustainable goods
One Cone Communications study found that 90% of consumers want more responsible products from retailers. Perhaps that’s why Allbirds, a shoe company dedicated to using sustainable materials, was named a brand to watch by Design Retail Online.
13. Feminist brands
That Cone Communications study cited above also found that consumers are more likely trust and be loyal to companies that support social and environmental issues. And with today’s social movements, feminist brands are gaining traction. Fiercely, for example, has built an entire brand of T-shirts based on women empowerment. Brick-and-mortars can also consider hosting in-store events, such as free self-defense classes or women-led leadership workshops.
14. Give back
Since we’re on the subject of sustainability and feminism, giving back in the broader sense through your physical store is a great way to build an enthusiastic customer base. Take a look at brands like TOMS, which donates a pair of shoes for every pair sold, or Pura Vida Bracelets, which supports Costa Rican artisans. For a brick-and-mortar spin, check out Reaching Out Teahouse. Employees are locals who have disabilities and other challenges that make finding a job difficult.
15. Obscure or one-of-a-kind products
Everyone loves a one-of-a-kind find. If you have access to unique products that you can create or purchase and resell, you could’ve found your next retail business idea. Brick-and-mortar stores make the perfect showcasing space to display your discoveries, and allow shoppers to discover treasures for themselves. Rare Finds is an excellent example of a retailer that follows this business model.
Just like unique finds are commonly sought after, nostalgia strikes a chord with consumers that makes it hard to resist. Striking up memories from years past, these products appeal to shoppers on an emotional and personal level — leaving less room for rationalization and more opportunity for overspending.
Jay and Silent Bob’s Secret Stash sells products devoted to the Jay and Silent Bob movies, as well as other pop culture references that have garnered cult followings, like Star Wars and The Lord of the Rings.
17. Go in with a partner
Finding a business partner to collaborate with is beneficial for a few reasons. If you’re new to opening a retail business, this can mitigate some of the risk and fear associated with the unknown. Plus, you’ll have access to twice the resources to get your business up and running, not to mention more brain power to help come up with retail business ideas. Brainstorm ideas together, as independent thoughts can turn into big, exciting ideas with a little collaboration.
18. Family tradition
Do you have any family traditions that could be a feasible business idea? That’s how The Giving Manger got started. The annual holiday tradition of assembling a manger as a family turned into sellable manger-making kits — complete with illustrated storybook — that are sold online and in retail stores nationwide.
Peep the National Retail Federation’s list of Hot Retailers in 2017, and you’ll see several alcohol brands on there. It’s one vice that remains in demand regardless of the state of the economy.
Grain & Vine is a boutique wine and spirits shop that has built its success on unique and rare offerings. And there are several ways to go as a physical retailer, whether you want to brew your own or simply source and sell someone else’s libations.
20. Locally curated goods
A survey by Yodle examined the “shop local” movement and found that most consumers prefer to shop locally, and would happily spend more doing so. If you don’t have your own products to sell, you can source local goods from nearby merchants and makers to resell in your store.
Bread and Butter Letter owners Rose Hope and Sarah Firmston curate handmade goods from across New Zealand to sell at their shop. “What started as an idea for creating a craft market-like store has transformed into a central hub for conscious consumers,” said Hope.
21. Personal styling and fashion boutique
The rise of big data in retail has made personalizing the in-person shopping experience more accessible to retailers of all sizes. “Sales associates will start to leverage data that empowers them with individual shopper insights, in order to move toward offering true concierge-style services, such as shopper recognition and service based on historical behaviors,” Keith Sherry, COO at SATO Global Solutions told Forbes.
That’s why taking a clothing store a step above by adding styling services is a way to go. Bonobos has taken this approach with their stores, and Nordstrom opened a pop-up that didn’t have any merchandise — just professional stylists to help shoppers navigate their purchase.
The NRF’s list of fastest growing retailers features a few tech brands, from Apple to Amazon. Technology is constantly advancing, and new products are launched all the time. Even when consumers already own an older version of a product, the new one is always sought after. That’s why you’ll see shoppers camping out in long lines every time there’s a new iPhone release.
Focus on new and emerging technologies, and pay careful attention to inventory management, as technology can have a short shelf life and require larger investments to purchase stock. Learn how Smartech found success in the technology market by providing an immersive in-store experience.
23. Design and home goods
eMarketer reports that building materials and garden equipment and supply stores had some of the biggest growth from 2016 to 2017, with overall sales rising nearly 11%. And for furniture & home furnishings, total brick-and-mortar and ecommerce sales rose 2.2%. Plus, global brands like Wayfair and Overstock are among the fastest-growing retailers, according to several lists. Think about your unique perspective on this vertical. How can you stand out among other local retailers who sell the same fares?
24. Children’s products
Fundera reports that parents spend more on their children due to decreases in school budgets, making child-oriented stores some of the fastest-growing in the industry. The average parent spends $6,500 on toys alone over the course of a child’s life. Plus, growing populations means more babies: Pew Research found that Millennials beat out Baby Boomers as the largest living generation in 2015. Whether it’s toys, clothing or something in between, catering to the youngest consumer base is a real retail opportunity.
25. Cosmetics and skincare
Cosmetics is the tried-and-true vertical in the retail industry. Energias Market Research cites that skincare products was the biggest growing segment in 2017, and IBISWorld data confirms that statement:
26. Organic cosmetics and skincare
What’s even more popular than cosmetics and skincare products? Those which are organic. Per Energias Market Research, “the global organic beauty products market is expected to increase from USD 14.8 billion in 2017 to USD 28.7 billion in 2024, at a CAGR of 9.9% from 2018 to 2024.” Successful retailers in this category like Lush do a great job of selling not only organic, but wholly ethical and sustainable, products.
27. Solar power
Inc.com reports that solar power was one of the six most profitable industries in 2017. This is likely due to solar power becoming more mainstream and affordable, as well as mandates or incentives for renewable energy. The average profits for solar power business owners? 30%.
28. Commercial leasing
Also according to Inc.com, commercial leasing was a top profitable industry for 2017. With profits averaging nearly 53%, brick-and-mortar retailers can use the opportunity to share their space. Whether you host a pop-in-shop, lease out a section of your store long-term, or simply rent displays to local artisans and business owners, you can tap into commercial leasing and retail.
29. Used goods
The second-hand goods market is a more financially friendly one to step into. It’s inexpensive to acquire inventory, as you’re operating off donations or low-priced merchandise, and shopping at thrift stores is becoming more attractive as consumers become more environmentally conscious. IBISWorld reports that Used Good Stores usually don’t have online stores, and these types of retailers have grown at a 0.7% annualized rate.
30. Natural food
There’s lots of data to back up this recommendation: Grocery was one of the fastest-growing retail segments in 2017, according to IHL Group; Sprouts, a natural grocer, has been recognized by the NRF as a rapidly growing brand and a hot retailer to watch; and a Thomson Reuters poll concluded that more than half of U.S. consumers prefer organic food. There’s lots of opportunity in this growing segment.
31. Bargain or discount store
The IHL Group also found that “off-price retailers and dollar stores” was the No. 1 fastest retail segment in 2017. People love a good deal. Marshall’s, Nordstrom Rack and Dollar Tree are three great examples of thriving retailers in this category. If you want to open your own store, focus on finding affordable suppliers who can still deliver decent quality.
32. Pet products
According to data from Gallup, approximately 60% of Americans own a pet, 68% of whom give gifts to their pets for the holidays. Be it toys, food or clothing, there’s a steady market for pet products in the U.S. It’s likely why companies like BarkBox have struck such success. Farfel’s Farm sells pet products and coordinates pet adoptions through their brick-and-mortar location.
With the right strategies, your pet store can acheive tremendous success. Just ask Pets of Sandgate, an Australian-based pet shop that recently grew their bottom line by 60%. Check out their story along with some great before and after shots like the one below.
What’s your retail business idea?
Where did you come up with your retail business idea, and what is it? Which new retail business ideas are you aiming to try in the future?