Times, They Are a Changin’

In this world, one thing is clear: nothing stays the same. Sometimes change comes gradually, and other times it comes as a result of a big event like 9/11. When we’re faced with a need to change, the natural tendency is to resist. After all, don’t we have a right to keep things the way they are?

Now big box retailers have arrived in our consumers’ backyards. They’ve taken market share, and fundamentally changed the way each of us thinks about our business. Stores like Crate & Barrel, Restoration Hardware, and Pottery Barn do a really nice job of merchandising and staying on trend. And stores like Target and Wal-Mart offer a range of interesting products. In addition to the big boxes, our customers can also shop on the Internet and by mail order.

The question that many independents have been asking is, “How can I compete?”

This is a tough question, for which there is no single answer. But I do believe independents are in a better position than they might think. (You’ve heard of David and Goliath?) As I’ve talked to folks around the country, it seems that there’s a common theme to independent retailers who are not just surviving but thriving in this difficult environment. I’ve tried to capture that theme in the exercise I suggest.

In order to compete successfully, one must start by understanding one’s competitors. Some people get angry at competitors, others ignore them. The best retailers pay attention, and adjust their strategies accordingly. Look for what they do really well and write it down. Looking for what they do poorly may make you feel better, but it won’t lead to more business for your store.

The next step is to identify differences between you and your competitor. List the differences on the left side of a writing board, then analyze how each difference (positive or negative) can be turned into a competitive advantage. Here are some examples.

My competitors:

1. Have professional product de-signers on staff.
2. Can afford the best locations.
3. Can stock more inventory.
4. Have bigger stores.
5. Have large parking lots.
6. Have big advertising budgets.
7. Can source in quantity.
8. Hire professional managers.

Now, on the right side of the board list how each of these can play into your strengths:

1. Have professional product designers on staff.

I’m free to select from multiple sources to keep our look unique and respond more quickly to “hot” items. I’m not restricted as others are to buying whatever corporate “sends down.”

2. Can afford the best retail locations.

We are harder to find, but worth it. Customers can visit our unique environment, where the coffee’s always on, and enjoy a friendly experience. We help them slow down, and avoid the headlong rush through life.

3. Can stock more inventory.

Our customers don’t want to buy what their neighbors just bought. We don’t carry a lot of anything but we carry a few pieces of a lot of hand-picked merchandise. This keeps our selection fresh and unique.

4. Have bigger stores.

Our store is warm and comfortable. Customers don’t want to spend their day walking through cavernous spaces when they can explore a rich environment that will appeal to their senses.

5. Have large parking lots.

Our customers can park close to the store if there’s a spot. If not, they can park around the block and enjoy a stroll through our scenic downtown on the way to the store. Who wants to walk around an acre of asphalt in a large parking lot?

6. Have big advertising budgets.

Big box stores advertise to tell you what their corporate executives believe is “hot.” We know our customers, and we select merchandise from suppliers the world over. We may not advertise like the big boys, we just focus on our friends, one at a time.

7. Can source in quantity.

We source from many design-driven suppliers, allowing us to find interesting items that can’t be found in big box stores. With multiple suppliers, we make sure that the customer gets unique merchandise at a good value.

8. Hire professional managers.

As an owner operator, my reputation is on the line with each sale. I live in town and know that I must treat everyone fairly and respectfully in order to earn their business. You can’t expect a store manager of a big box store, operating according to corporate rules, to treat folks as real friends.

These are just a few examples. Your situation will dictate how best to present the differences between you and your big box competitor, both in location and merchandise mix. Once you’ve completed your list, you’ll be ready to reflect on how this impacts your strategies.

As you put together your revised plan, keep in mind to emphasize the differences you bring to the table. The great thing about differences is that they allow for choice.

If your path is to try to compete with the big boys by mimicking them, you’ll likely not do well. Be different, be proud of it. Communicate those differences to your customers, and you have a good chance of doing well.