5 Truths of Competing in a World of Superstores

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Can Small Retailers Really Compete with the Likes of Superstores? YES!

Many independent retailers become discouraged when major superstores begin taking chunks of their market. However, there are ways smaller retailers can adapt and find ways to coexist and thrive when faced with such a challenge. Here are five retail truths of competing with superstores.

Every market makes room for energy and determination. There’s always a place for a retailer with enthusiasm and a willingness to work. An energetic retailer looks for what the community needs and finds ways to provide it. His smaller scale — along with his dedication and persistence — allow him to get more details right and attract an appreciative and loyal clientele.

A local retailer is also more agile. Big chains are bound by rules and operating systems, but an independent retailer can accumulate information, make a decision, and begin implementation all in the same day.

A niche is an invitation to be outstanding. While it’s not possible for small retailers to offer more merchandise than big-box stores, it’s usually not difficult for them to offer better merchandise.

Most big-box stores have such a broad spectrum of products that they can’t maintain specific expertise on any of them. The big-box market strategy is aimed at average shoppers and excludes many profitable customers who want more. They leave lots of niches for smaller retailers to focus on.

The niche can be products or services, or it could be specialized knowledge and expertise, demographics, relationships, terms or even a contrasting image. Oftentimes, we find that niches are much bigger and more profitable than we ever suspected.

A company is the people it hires. Everything in a store happens through its employees — displays, selections, organization and especially sales and customer interactions. Customer experiences — good and bad — are the products of our people and their skills.

The quality of people working in stores is far from homogenous — it extends off the scale in both directions. The best employees find ways to make the right things happen, while poor employees find excuses to keep anything from happening.

But hiring good people requires effort, patience and skill. The applicant pool is not a cross-section of the population and is full of snares and deceptions. While it’s not hard to spot many undesirables and unemployables, identifying those with the motivation and determination required takes persistence.

Large retailers face a similar challenge. However, independent retailers must seize the advantage when honing in on their hiring skills, dedicate sufficient attention and effort to the process, and hold on to their best finds long term.

Expertise is conspicuously scarce in retail. Whether fair or not, the public has a powerful image of mass merchandisers being frustratingly short on knowledgeable employees — a challenge that is further compounded by famously high employee turnover in big stores. This creates one of the best opportunities for smaller, specialized retailers. Smaller stores can train their people thoroughly and continuously on products, salesmanship, systems, methods, customer interaction, display, merchandising and every detail that matters in the operation of their stores. Every customer who walks into an independent retail store should be met by a knowledgeable, well-prepared employee.

Relationships are powerful salesmanship. Large chains are notorious for impersonal service, inflexible policies and callous business decisions. As a result, shoppers who need personal attention or have a product or service problem have learned to expect frustration.

A local retailer gets to know many of his customers and develops a reputation as a community member. He can — and should — be more attentive, flexible and empathetic with his customers.

Shoppers want to do business with stores, retailers and salespeople they know, trust and like. Superstores have some unique advantages, but local retailers have sufficient ways to offset them and thrive.

About Chip Averwater 1 Article
Chip Averwater is a third-generation retailer and author of Retail Truths: The Unconventional Wisdom of Retailing. The book The book consists of 427 retail truths and is available at local booksellers, Amazon, B&N.com, iTunes iBookstore and mashwords.com.

1 Comment

  1. It is interesting to know that small-box retail stores can thrive in the presence of big-box retail stores considering the above points raised. But how many of these small retail stores are aware of these potentials they possess. Some are so threatened that they see nothing else but the competitors.

    In Nigeria, where small-box retailers make up the larger number and lack basic retail skills, they tend to struggle, and some eventually die. It is necessary, therefore, to help small retailers with some sort of retail trainings in order to build their capacity to survive and thrive in competition with the “sharks”.

    Thanks for the post.

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