In the United States, businesses call it Black Friday. Consumers call it the day after Thanksgiving. Whatever you call it, this time of year represents the unofficial kick off to peak selling season for retailers of all sizes. And as each year passes, independent retailers feel more and more heat from chain stores and online retailers with seemingly unlimited advertising dollars and price discounting powers.
While local retailers have fewer resources than big-box stores, there are a number of ways they can set themselves apart. If you run a small business, here are three tips to compete this shopping season:
1. Don't try to beat the likes of Wal-Mart at their own game.
Large retailers have more leverage than you in just about every meaningful benchmark you can think of. Don't waste your valuable time, effort and money shaving prices, posting flyers in newspapers and running television ads. Trust me you'll fall short.
While their size permits them to execute in ways you can't compete, the reverse is also true. As a larger corporation, it can be more difficult to personalize, customize, prioritize and localize their customers' experiences. As a small retailer, take advantage of this fact by executing on your strengths, not by trying to compensate for your weaknesses.
2. Personalize your products and services.
Big-box stores are in my face all the time with e-mails, flyers, radio and TV ads. Trouble is, that while I see and hear from these ads a lot, they're never actually speaking to me. Instead they're speaking to everyone all at once. These stores don't know me by name. I can't ask for my usual sales associate when I walk in and I'm not even sure if they could respond to a product specific e-mail inquiry if I sent one.
Your business, on the other hand, knows its regular customers by name. Hopefully you keep a simple database of your customers and their purchase history. Reach out to them by direct mail, e-mail and phone and highlight a new product or service that fits with their interests. When something worthwhile is presented to me in a personalized manner, I pay way more attention.
Offer personal favours such as layaways, a bring-a-friend VIP night or first dibs on a hard to find best seller. When customers realize that you know them by name and remember their preferences, they'll become fiercely loyal, not just during the holiday season, but all year long.
3. Customize your offerings.
While big-box stores appear to offer a huge selection to their customers, they often struggle to 'go deep' with any particular brand; by that I mean they offer only a handful of a particular brand's best selling items and often ignore the rest of the brand's product line. They do this because the bulk of the sales come from popular items, leaving many brands unrepresented with regards to their specialty or niche products. Most big-box stores can't be bothered to special order anything for you either.
That's where you come in. You can carry and/or special order niche products from your vendors. Furthermore, you can bundle items within or between brands. Maybe you can offer a special on full-size snow shovels by bundling it with a collapsible shovel that fits in the trunk of a car. By doing this you are offering a 'deal,' but the focus is less on the price and more on the additional product that the customer was probably unlikely to consider buying if it wasn't for the deal. This makes apple-to-apple price comparisons difficult and boosts your average sale per customer.
Holding small promotions and leveraging the resources you already have – such as employee time, customer data and unique products from your vendor – can help you compete. But it won't happen if you try to mimic big-box competitors. Instead, play your own game, where you control the rules.
Check back next week and I will cover more tips including how using prioritization and localization can make this holiday shopping season powerful and profitable.
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.