You likely know that retail is evolving. Retailers are increasingly engaging in new forms of customer engagement, new store concepts and bold new forms of virtual and augmented shopping. What you may not know, however, is that this new class of retail entrepreneurs looks and thinks a little differently from those before them. Using new data from the National Retail Federation’s 2018 Small Business Owner’s Survey, here are four ways new retail business owners differ from their more established peers:
This new class is predominantly female. While the overall survey demographic skews slightly male (53 percent), new business owners (defined as those that have owned their business for three years or less) are 61 percent female. NRF has long championed the fact that women are leading the reinvention of retail, and this year’s survey data supports that continued trend.
Online engagement is the primary focus. As recently reported by The New York Times, retailers that succeed are more likely to embrace online and enhanced customer experiences. Data shows that 54 percent of all retail small business owners are either exclusively online or have an online presence. When looking just at new business owners, that percentage climbs to 63 percent.
They’re incredibly optimistic about their business prospects (particularly in this economy). When asked how they think about their businesses now compared with the same time last year, almost 70 percent of retail entrepreneurs feel better off. This is particularly striking given that, according to the Small Business Association, about half of all businesses with employees fail within their first five years. Similarly, 84 percent of new business owners expect their business to be even better off in the next 12 months. It could be that these new business owners have unbridled optimism, but with the growing economy and rapidly increasing retail sales, these new entrepreneurs have strong tailwinds as they navigate retail’s evolving landscape.
They’re cautious about the regulatory landscape. Despite their optimism, retail entrepreneurs know their businesses are still getting their footing and regulatory changes could derail their success. Entrepreneurs are less likely than established owners to agree that the current administration has the right approach to regulations and more likely to agree that uncertainty about the economy makes it difficult to plan for business growth. It’s not difficult to understand how the constant uncertainty around tariffs and international trade is particularly challenging for new businesses trying to establish supply partnerships and distribution when regulations might drive up the price of their products.