As an independent specialty retailer competing with big box stores, you may have come to the conclusion that you simply can’t compete on price. You’re probably right. Rather than dwell on that, however, focus on what you can do. So, how do small to medium-sized (SMB) businesses survive along with colossal chains?
Here are five tips that may help you refine your competitive strategy:
- Have it first. Large corporations don’t often take chances on products from new manufacturers or developers, and because of their corporate structure, can’t move as quickly as you can to add a new product or line. If you find yourself competing with big box stores, keep an ear to the ground for new, innovative products that you know will appeal to your customer base.
Your agility will also be a plus if you decide you no longer want to carry a product or a line — you don’t need approval from anyone else to discontinue items. The decision is yours.
- Showcase merchandise your customers want. Your expertise in your market or niche has helped you create a merchandise assortment based on what your customers want. Kudos if you also are monitoring sales and performance data that shows your best sellers, top brands, and best performing product types and making merchandising decisions based on facts. Your customers will be delighted to find a merchandise assortment that is filled with just the things they are looking for — which is a quite different experience from shopping in a big box store that is filled with everything.
- Sell on value. As an SMB retailer competing with big box stores, you can provide value for which customers may not mind paying a few dollars more. Look for ways to help them save time and money. Can you help with fittings to make sure they won’t need to return apparel or shoes? Can you share your impeccable taste to offer advice on home decorating projects? Can you provide a do-it-yourself gardening or home repair guide for projects that align with your merchandise?
- Keep your current customers and keep them happy. There is definitely nothing wrong with trying to build your customer base, but also remember to pay special attention to your current, loyal customers. A BIA/Kelsey and Manta joint report (SMBs Shift Priority to Customer Retention, 2014) states a repeat customer spends 67% more than a new one, and the majority of SMB retailers reports more than half of their revenue comes from repeat customers. Consider a loyalty program that rewards customers for their continued business. The data you analyze from the program can help you pinpoint the rewards they value and will work towards — as well as provide insights into your customer base as a whole. You may also want to recognize your most loyal customers on social media or with top-tier rewards
- Strengthen your eCommerce site. If you find yourself competing with big box stores, it’s imperative that you have a strong eCommerce site. Look for an eCommerce platform that enables you to provide top-notch customer service and secure transactions and also to give customers the ability to shop via mobile devices. This will give your customers the convenience of shopping online – and could also attract some new customers.
Focusing on your advantages can help you when your business is competing with big box stores. Agility, familiarity with your specific customer base, and the ability to add value, can make your business a formidable competitor, regardless of size.