You can co-exist with the big retailers

By Rick Sparks

University of Missouri Extension

Cape Girardeau County

With large discount houses and mass merchandisers sprouting up on every corner, how is a small retail establishment supposed to compete? After all, customers are lured in large numbers to the big "everyday low price" convenience of being able to buy fresh produce, tires, clothing and video games all at the same location.

It is hard to beat the economies of scale that the big boys enjoy in the retail market. They use technology, distribution networks, targeted advertising and tremendous buying power to ensure low prices, a wide selection and convenience.

However, there are many things they cannot offer, and it is those elements that provide smaller retailers with opportunities to not only survive but even thrive in the same communities as those retail giants.

If you are a smaller retailer feeling the effects of the large merchandisers, try to have a positive attitude about your competition. After all, research has proven that they do attract more buyers from surrounding communities -- buyers who will find their way to your store as well. How can you capitalize on that increased shopping volume? You may have to make some changes.

First, try to offer something different from what the mass merchandisers sell. You may not have much luck selling a higher-priced version of the same thing a discount store offers. Capitalize on the fact that customers may buy one or two items from you instead of a pre-packaged larger lot. What voids in inventory can you fill with unique or higher-end items that your larger competitors don't offer?

One of the disadvantages to shopping the big retails chains is that it's often hard to find a sales associate who knows much about the product. As a smaller retailer, you can offer that expert technical assistance and help customers analyze their needs. Find ways to offer extraordinary service, such as deliveries, on-site repairs, special orders, gift wrapping, registries, rentals or "how-to" classes.

Research tells us that poor customer service is the number one reason customers quit doing business with a store. You can be sure your establishment is not one of those casualties by following a few tips.

* Always greet customers when they enter the store.

* Smile.

* Treat all employees as part of the team, and hold regular employee meetings to offer advice on generating sales and to gain staff input on sales strategies.

* Solicit complaints. Offer to accept customer input through comment cards, signs at the register encouraging comments or personal conversations.

* Train and retrain. Empower your employees to solve customer problems, and do what is necessary to have a happy customer.

* Smile.

The big retailers offer longer store hours -- in some cases, 24 hours a day. While the latter is probably not possible, consider extending your hours to accommodate people on their way to an 8 a.m. job and those who get off work at 5 p.m.

Make your return and exchange policies as accommodating as possible. While you will not have the leverage the mass merchandisers do in terms of accepting merchandise back with virtually no questions asked, be as flexible as you can be to make the customer happy. Can you offer a partial refund? An equipment loaner until a repair is complete?

While you may well know the going price of a gallon of laundry detergent because you buy it frequently, you probably don't know the going price of the last can of car wax you purchased. The big guys will bet that you will know if their price on a frequently purchased item is really lower than their competitors.

What they're banking on is that you won't know the going price for something you buy once or twice a year. Are they truly less expensive? Who will take the time to find out? Very few people, which is why their prices on the more unique items are probably at least comparable to the other guys. Price competitively.

Use your advertising to showcase your unique customer-oriented features, such as free delivery, longer hours, in-store credit or special order capability. You might not make the sale on advertising a lower price; however, you could easily make it by offering a perk or two. But you have to let folks know about those. Use your advertising wisely.

You can compete with a simple strategy of looking at what the big houses offer and offering something different, filling the gaps and treating your customers like the special treasures they are. These big competitors are bringing more folks to your area. Be ready to lure them in your door with special features that only you can offer. And do it with a smile.