A few years ago, few people would have predicted that in 2017, customers would again see the value of shopping with independent businesses. Yet that’s exactly what’s happening. Since Generation Z prefers shopping with brands which seem authentic and Millennials love a brand which improves their community, there has never been a better environment for independent retailers to compete with big box stores.
Numerous recent studies conclude that customers prefer to shop with indie retailers. In fact, Smallbusiness.com maintains that 93 percent of customers would rather shop locally than shop at a megastore. Independent retailers can decide to learn from what the big guys are doing right instead of viewing them as a threat to local business. With this in mind, here are 5 things indie retailers can take away from their big box competition.
Big Box Tip #1: Know Your Niche Demographic
Every SME business operates within its own ecosystem. The factors of that ecosystem vary by store and include things such as local trends, seasonal variances, inventory assortment and community events – which all greatly impact customer preferences at any given time. For this reason, the location of a store is key to determining what type of inventory that store should be carrying. Many independent retail business owners do not live near the stores they operate, so it can be easy to forget to factor in location-based customer preferences when choosing inventory for their stores. On the other hand, big box stores often span across multiple regions. To cater to a diverse range of customer preferences, big box retailers use data software to factor variances in consumer preferences into their buying strategy. Yet big box stores shouldn’t be the only ones taking store location into account when buying inventory. It’s critical for independent retailers to consider local trends, community events, immediate consumer demographics and all other factors that influence customer spending.
Big Box Tip #2: Listen to Customer Feedback
Leaders within big box stores aren’t expected to be on the sales floor at all times, yet they are still expected to understand their customers and what they want. As a result, chain stores have found alternate means of communicating with their customers – many of which rely on technology to eliminate the communication barrier between store customers and the company’s high level corporate team. Since management can’t always be there to gather customer feedback, many companies opt to print scannable codes onto every receipt their POS system prints. These codes direct customers to a satisfaction survey, where they can share feedback about their shopping experience. Another popular option is to have a quick touchscreen customer satisfaction survey built into their POS system, so customers can easily check in with store management on their way out of the store.
Although indie retailers are usually pros at gathering customer feedback when they first open, this priority often falls by the wayside as the business expands and management becomes distracted by the daily concerns of running a business. To avoid missing out on an opportunity to gather customer feedback, it can be beneficial for indie retailers to automatically send customers a follow-up email thanking them for their purchase and asking if their needs were met during their store visit. No matter what the scale of your store, customers always appreciate it when management makes an effort to follow-up with them about their experience.
Big Box Tip #3: Get Help Fulfilling Orders
As shipping times become increasingly important to customers, retailers are looking for innovative methods to offer shorter shipping times than their competitors. Walmart, for instance, is enlisting retail employees to perform shipping functions in order to cut delivery time for their 2-day shipping program. Walmart employees can earn some extra income by signing up to drop off deliveries on their way home from work. It is important to note that this concept is still in its beta phase, and that these employees are compensated for the extra time they put in dropping off orders, as well as the fact that this program operates on a volunteer basis. That said, there’s a lot to be learned from this.
It is more common for big box retailers to outsource order fulfillment in order to cut shipping costs. Outsourcing order fulfillment automatically combines web and in-store orders, so front-facing retail associates don’t have to spend their time performing back-of-house shipping functions. Independent retailers can also save through outsourcing by decreasing their need to pay hourly wages to back-of-house staff, as well as freeing up store associates to interact with their customers.
Big Box Tip #4: Highlight Strengths with Specialty Stores
Modern customers prefer a differentiated shopping experience, where the retailer has honed in on one specific type of product. Individuality is key, and even big box stores are branching out into specialty retail. According to a 2017 retail distribution report by Deloitte, “differentiation should likely focus on product uniqueness first and customer experience second.” In other words, customers prefer the stores which offer products that they can’t get elsewhere.
The specialization trend is more easily implemented by indie retailers than by big box stores, but many SMEs have yet to get on board. Indie retailers can cater to this trend by sourcing unique products and offering classes that cater to the interests of their key demographic.
Big Box Tip #5: Let Automation Do the Math
Imagine a big box store owner trying to quantify every associate salary within their store operations. It would be impossible to do so and business functions would cease while management was caught up with tasks that can easily be automated. Likewise, there is no need for independent business owners to spend their time and resources trying to mentally perform tasks that are much better (and more accurately) performed by a computer. It’s too easy to make mistakes and too time consuming, as well. All of the mathematical functions of running a business can be automated, from ordering inventory to paying associate salaries. It’s time for indie business owners to focus on conserving their energy for where it’s most needed and take advantage of technology to help them along the way.
In too many cases, independent business owners are oblivious – or simply choose to ignore – their big box competitors. Corporate conglomerates have data sets and market analysis behind every move they make, so there’s a lot SMEs can learn from their big box competitors. Instead of ignoring big box competition, indie retailers can build on the research being done by big box stores in order to make the absolute most of their retail business.