Nothing — and I mean nothing — frightens small-business owners more than hearing that one of the big-box retail chains — WalMart, Costco, Lowe's, Home Depot and the like — is moving into town (well, maybe that Amazon is moving into their business ...).
In last week's column, I gave you an overview of what you have to do to beat Goliath. Now here are some specific tips that have worked for many of my clients.
Prepare for Change. You will probably need to change your business model — drastically, and quickly — in one or more ways. Prepare yourself and your business partners psychologically for that.
Speed Things Up. Surviving against a big competitor is not so much a matter of providing better service as it is giving your customers a more convenient experience so they can get in and out of your shop quickly.
When customers show up, your sales staff should be trained to ask them immediately what they're looking for, help them make decisions quickly and move them along. Let the window shoppers, lookie-loos and showroomers fend for themselves.
Consider Going a Mile Wide and an Inch Deep With Your Inventory.
Stock only those items your customers request over and over again. People won't go to Home Depot to buy a couple of light bulbs. If you always keep their bulbs in stock, they will buy from you, even if you charge more for them.
Every square foot of your store should be occupied by inventory that turns over within 30 days or less. Airport bookstores carry only best-sellers. If you're stocking stuff that isn't rolling over quickly, dump it.
Consider Going an Inch Wide and a Mile Deep With Your Inventory. The Mysterious Bookshop in New York City is one of the hottest independent bookstores in North America and has competed successfully with both Amazon and Barnes & Noble for decades. Why?
Because all it stocks is mystery novels, and it stocks every single mystery novel in print in the English language.
I'm a fan of murder mysteries set in historical times. If I go to the local chain store, I might find a couple of these. If I go to the Mysterious Bookshop, it has entire sections broken down by historical period, such as Ancient Rome, Elizabethan England and Mysteries Based on the Novels of Jane Austen.
Consider Going High-End and Chasing the 1 Percent. You will never see people wearing designer dresses or Patek Philippe watches at Costco. People looking for high-end, luxury "status" merchandise care about the customer experience and being pampered. You won't get as many customers each day as you do now, but each one will spend lots more per purchase.
Look for Underserved Markets. Are there any local communities who are underserved by local retailers, perhaps because of a language or cultural barrier? Now is the time to reach out to them in a big way. The three words that will double your business if you add them to your business cards and website are "Se habla espanol."
Embrace Your Community in a Bear Hug. The owner of a local ice cream parlor has been battling Cold Stone Creamery and other national franchises for years. His competitive advantage? He has five kids in the local school system ranging from kindergarten to high school who are his brand representatives. Whenever a local kid is having a birthday or special event, he or she gets a coupon for a free cone or 25 percent off on a cake.
If there's a charity run going on, he sponsors it and gives out free T-shirts. He has not one but two Little League teams wearing his jersey. At the annual Memorial Day parade, dozens of kids march behind a big banner offering free ice cream for veterans. Yes, it costs money. But where do you think everyone in town goes for ice cream? Resistance is futile: You might be shamed on social media if someone were to see you in a competing parlor!
Become a Virtual (Digital) Business. There's an old saying: "The enemy of my enemy is my friend." Who does a big-box retailer fear? Amazon, that's who. Amazon.com has built warehouses in most states to enable same-day or next-day delivery of merchandise. Remember the drones? Once this happens, the traditional big-box retailers will be in a cage match to survive.
Mom-and-pop retail isn't disappearing. It's going online. Today's boutique clothing store is tomorrow's eBay store or Amazon seller account. Millions of Americans sell merchandise online full-time or part-time.
Yes, you will have to offer free shipping and cut your margins to be competitive online, but you will eliminate virtually all of your overhead. To get started, check out Amazon's Fulfillment by Amazon service.
And then just hope Amazon doesn't like your merchandise so much it decides to offer its own brand and compete with you.
Take Action Now. Once you've decided on a competitive strategy, don't procrastinate. Do it today, before the big-box retailer has sunk its roots and built customer awareness. Sometimes you have to be ruthless to survive in business. This is one of those times.
Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at www.creators.com.