5 Ways the Small Retailer Can Compete Against the Big Box Stores
In order to survive, today’s retailer must offer products and services the big box stores cannot, and, in order to prosper, they must also provide a level of service their customers cannot find anywhere else. The competition is tough but the small retailer has advantages to offer their customers the big guys cannot. The small retailer must learn to stand apart from these big box stores with their poor service and meager selection and turn their Store into an indispensable resource their customers will return to over and over again.
1. Know Your Competition: The first thing you need to do when planning a retail business is to learn as much as you can about your competition. Before you even open you should already have done a thorough survey of every Store in your area that sells the products or services you intend to sell. You must visit your competition and make note of the makes and models as well as the price of everything they carry. Pay particular attention to the things they do not carry as well as the things they do. Imagine yourself shopping there. What would you like to see if you were the buyer?
2. Selection Of Merchandise: Only after you know exactly what your competition is selling can you decide what you should offer. The big box stores and deep-discount retailers make money by offering a limited selection of many products. You may choose to compete by offering a large selection of a few products, something the big guys cannot and will not do. As an example, if your Store specializes in small appliances, you might want to stock several models in every price range. Most people want to buy the best quality they can afford and if you have wide selection they are apt to purchase a model at top dollar. Consider how this differs from your average wholesale club or discount Store which usually offers, at most, one or two choices.
3. Price: The next thing you will want to do is face up to a bit of reality. There is no way you will be able to compete against these deep discounters by offering the same merchandise they do. You will never be able to under price them, and nor you should you try. The image you want to project is that you are different than these guys. That is your selling point and the reason you are in business in the first place; to offer your customers something they cannot get elsewhere.
4. What Else Can You Offer? Most people Shop at these big box chains to save money, without realizing what they have to give up in selection and service to do so. In order to win over customers, you need to offer the things they do not. One way to add value to your products is with outstanding customer service. This should include a thorough knowledge of the products you sell as well as instructions on how your customer can get the most out of them. Become known as the expert and customers will search you out for your knowledge as well as your products. Offer more and you will win them over.
5. Control Costs: These large discount chains got to be so large by their complete focus on lowering costs and you will need to do the same. Get into the habit of questioning every expense, no matter how small. If it does not add value to what you offer or will not increase your bottom line, then look for a better way to spend your money. Cash flow often means the life or death of a business, and the close control of your expenses is one of the best ways to make sure yours stays healthy.
Contrary to common belief, the small retailer can compete, and even prosper, against the big box stores. To do so, however, they must offer the right products and outstanding service while at the same time keeping tight control over their cash flow and the way they run their business. If the small retailer does all these things, their success or failure will be determined by what they do and not by the actions of their competition, no matter the size.
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