Independent retail business owners often worry when a large chain store comes to town. The threat of having to compete with large retailers keeps many would-be entrepreneurs from even opening a shop. Unfortunately, those fears are well-founded. Studies show people purchase a higher percentage of their merchandise from the mass merchandisers and consequently a lower percentage from local merchants.
It may be daunting but despite the emergence of these multi-million dollar businesses, many small retailers continue to thrive (and profit) in a highly competitive marketplace. The key to survival is to offer the products and services that your competition does not. Strategies must be implemented to overcome the lower prices and wider selection that large retailers provide. Here are some tips to better position your retail business for competing with the big box stores.
Occasionally, we can be our own worst enemy. Talk of a big competitor coming to your community is not a reason to immediately consider relocating or closing your business. First, recognize that you may need to make a positive change in the way you do business. Then, assess whether or not you have the desire to make those changes.
Do the Research
Seek advice from your trade association or consider hiring an industry consultant to conduct a formal study of what customers value most and what they value least about your business. Understand your store's competitive edge. Don't be afraid to shop your competition. One way to be educated about the way your competition does business is by experiencing their customer service first hand. If possible, talk to their customers. Find out what their shoppers like or dislike about the chain store.
Dare to Be Different
Mass merchandisers generally have a little of everything, whereas smaller specialty stores can focus on a narrow but lucrative niche. This can establish your store as the place to go when buying these items. If your market niche is very small, consider keeping a few products and services that appeal to a wider range of customers, but have exceptional product depth.
Focus on what makes your business unique. Emphasize the originality of your inventory as compared to the items offered by the chain store. Customers are intrigued by the unusual and are often attracted to the idea of getting something special from an independently owned business. Smaller retail businesses also have the luxury of creating a comfortable, cozy atmosphere within their store. This gives your store a personality which is often lacking at the big stores.
The Power of Pricing
Be open to a little haggling where price is concerned. More price negotiating goes on in your "Mom and Pop" stores than in the big box stores. Bargain shoppers know the independent retailer has the power to negotiate a sale and these customers are more inclined to shop where they feel they set their own prices. Remember, it is all about the customer's perception.
Treat each customer as your best customer. As a small store owner, you can concentrate on small details. Superb customer service is the biggest intangible asset to the independent business. People like to shop where they feel comfortable and where they feel the owner truly cares about their wants and needs. It is the least expensive change to make in order to take on the larger chain stores.
Staffing Your Store
In order to keep your employees from defecting to the competition, you should treat them fairly. Motivate your staff and pay attention to their needs. Help your staff become proficient in their respective departments and make sure they are readily available to meet your customers' needs. If your employees can provide this, your customers will have an extra incentive to continue doing business with you.
These tips for competing with big box stores can help level the playing field. However, don't be misled into thinking exceptional customer service or unique products will win out over lower prices every time. As our customers' shopping choices change, so should our thinking. To succeed, we must lead or keep pace with the change. With or without new retail competition, this kind of planning is something small retailers should be doing anyway.