When it comes to competing with large retailers, is there a way to level the playing field? You may feel that the odds are stacked against you as a small business. It can be daunting when your competitors already have a head start.
Within your retail strategy you have two choices. You can emulate bigger businesses or do things differently and there are some practical ways to do this that don’t cost the earth.
When it comes to competing, a little can go a long way. It’s about making small changes that can single your business out and create a point of difference that points your potential customers in the right direction.
Small can be beautiful. There are advantages to being small that shouldn’t be overlooked. Make a virtue of your size and turn it into a selling point.
If you’re going to compete with bigger businesses on your terms, you need to think and act quickly. Here are ten tips to guide you:
Like a speedboat compared to an oil-tanker, smaller businesses can move faster than larger ones when market conditions change. Keep careful track of your customers' interests and preferences and you'll be able to anticipate their requirements. You can also take advantage of these relationships to check in with customers and prospects on a periodic basis. Ask for their feedback on your product or service, shop and website.
2. Don't slash your prices
Competing on price with the big players is usually a bad idea. Economies of scale mean that the larger stores have more purchasing power than you and can drive down their suppliers' prices.
3. Negotiate with your suppliers
You might not be able to get their prices down by much, but you could negotiate other deals. For example, you could get a range of products in your shop before the big retailers. Or you might have some product lines custom-made for you.
4. Be different
In some retail sectors it's important to be seen as stable and predictable, but in others you can have some fun. Make the most of your different perspectives, get your employees involved, add quirky side-notes in your marketing material. This will help people remember your business.
5. Offer the personal touch
Deal with your customers on an individual basis – that's something big businesses can't easily do. Nobody likes dealing with a faceless entity, so give your company a personality that customers want to interact with. Reward your employees for thinking creatively about how best to serve customers.
6. Use technology to stay in control
A few years ago, it would have been difficult for one person to manage the accounts, inventory and point of sale for a retail business. Now it's much easier, thanks to cloud-based software that can be accessed from your smartphone, laptop or tablet at any time. Choose quality accounting software, point of sale tools and inventory management programs to save yourself time and money.
7. Be socially responsible
Be aware of the politics of corporate greed. Big business has a tainted reputation for many people. The perception is often that they ignore concerns about the environment, poverty, tax law and other legislation. Whatever the truth behind those beliefs, they can work in your favour as a small business.
8. Appeal to ethically minded consumers
Small businesses can appeal to the large and growing market sector that cares about sustainability, fairness and ethical trading, while still making a profit. Think about where you source the products you sell and look into product labelling that shows customers how ethical you are.
9. Get the best staff
The appeal of smaller companies applies to employees too – so make sure to hire people who are passionate about small business. Many of the brightest young minds want to work in a fun, lively and challenging environment. That's more likely to be the case in a small business than a large one.
10. Get the best out of your staff
Employees of big companies are driven by their career and salary – the success of the business itself is less important to them, though it does still matter. Staff at small businesses have much more influence over their company’s future – if you let them have it. Think about employee reward schemes and get your staff involved. They'll reward you with hard work, creativity and good ideas.
We've covered the practical ways in which your business can compete with large retailers, but there's one other vital ingredient.
Above everything else, the big advantage you have as a small business owner is your passion. You didn't start running your retail business on a whim. You started it because you feel passionate about your market sector and because you know and care about the products you sell.
So, make use of that passion. Your drive for success, your hunger for innovation, your deep knowledge of the things you sell – those are the traits that will give your business the edge over large retailers.
Contact your WDF Professional team member if you would like to discuss further how we can help you with your business. Phone 02 6921 5444 or email accountants@wdf.com.au
Client Services Manager
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