Being Small, Competing Big

By Peter Montoya and Tim Vandehey

Q: We're experiencing the worst holiday retail season in years. Let's say you're a retailer: particularly a small retailer. How do you market yourself as the place where Christmas shopping--and beyond!--should be done, particularly if your competition is a big box store that can probably undersell you?

A: You emphasize the qualities that your big competitor can’t match. You can’t compete with them on price, selection, or corporate brand recognition, so don’t try. Instead, focus on the things that make you different from the Walmarts of the world.

Try these tactics:

Specialize. Big retailers tend to offer everything under the sun but little in the way of quality or assistance. Go the other direction by specializing in a narrower line of products but offering a great selection within them, along with top quality and expert advice and help.

Customize. Big retailers typically evince a “take it or leave it” attitude. Why don't you be the retailer who creates custom solutions for people, whether they’re buying vacuums or model trains?

Reach out to the community. Pay local kids twenty bucks to put flyers in the front doors of 1000 homes in your area, inviting them to a Halloween party at your store. Sponsor a local Little League team. Organize a beach cleanup. You’re more a part of the community than any national store; take advantage of that fact to earn valuable goodwill.

Use your name. People know you, not your store. If your name isn’t the most prominent part of your business’s name, change your business's name. Rather than “Women’s Shoes 'R Us,” make it “Bob Smith’s Shoes for Ladies.” If people know you and what you stand for, then they’re more likely to give you their business.

Get things no one else can. Doing this is a major advantage of being a local retailer. Big boxes don’t really care about helping customers find rare or difficult-to-locate items. You can leverage this. Make taking requests for things that customers “have always wanted to find, but…” a major focus for your store. Then find them. Be the one who locates that vintage toy Grandpa wants to pass on to his grandson. Such gestures paint you as a merchant who really cares about people—and that’s what we all want to do business with. Plus, you really will be a merchant who really cares about people.

Give your store a makeover. The stereotypical local, small-town merchant has a crowded, cluttered store with crumbling signage and no organization. Defy that image. Make sure your shop is clean, neat, well-lit, and has clear, professional signage. This is an area where the big boys excel, and it’s what shoppers expect. Just be careful not to lose any local flavor that makes your place special.

Reward loyalty. You can’t compete on price, but you can give discounts to customers who come back again and again. This can be as simple as giving them a card and hole punching it each time they make a purchase; after five purchases, they get their next one for 50% off. Or something like that. Offer coupons, special discount days; take barter; anything to be creative and save folks money in these tough times.

Have a great Website. You can’t afford a 100,000-square foot store, but you can probably afford to have a nice-looking website. Get one. You’ve got to have one these days. Make sure it’s clean, offers people a place to sign up for your e-mail newsletter, download coupons, find out about sales, learn about community events, and ask about special hard-to-find items. And make sure you send out that e-mail newsletter every month.

Repair stuff. Finally, what could be better for saving people money during tough times than also offering to repair the products that you sell? Remember: these are customers who have already chosen you; this is a way to get more business from them. Either start an in-house repair service or contract with a shop that does repairs. In any case, you’ll benefit greatly by helping some people get more life out of their prior purchases rather than spending more money on something new while making new trash.

In other words, just as the big boxes may be doing what you can't pricewise, you do what the big boxes can't in terms of all of the other thing that factor into consumers' decisions.

Peter Montoya and Tim Vandehey are the authors of The Brand Called You, the definitive guide to personal branding, published by McGraw-Hill. The book can be purchased here.

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December 16, 2008 3:44 PM