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Last week I shared three tips on how independent retailers can differentiate themselves from big-box and online retailers this holiday season. I suggested that smaller stores avoid trying to beat the likes of Wal-Mart at their own game, personalize products and services, and customize their offerings.

This week, I'll add the following two strategies for small businesses: stay local and focus on the right products.

Localize promotional opportunities

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While I would always encourage retailers to stretch beyond their neighbourhoods to draw new business, focusing on the local market pays tribute to the customers in your territory who prefer to shop local.

Host an invitation-only sale that offers special pricing, for one night only, to people in your customer database (and their friends!) who live within a range of postal codes. This type of promotion creates a specific call to action and makes the invitation more exclusive.

You can also offer a free event – such as a training session, meet and greet or presentation – early in the New Year to customers who buy a specific product or service. Pushing it until after the holidays gives your business more time to execute and gives your customers have more time to participate. It also promotes a sale right now, and potential return visits by your customers in the near future. While this might not be limited to customers in your local neighbourhood, it's certainly easier for them to reap the benefits.

Focus on the products that require repeat purchases

Many retailers never take the time to sit down with their front line staff to discuss what products or services they want to highlight with their customers this season. Usually the assumption is that you want to sell as much as you can to as many shoppers as you can. That's fair, but a bit of focus can go a long way.

For example, you and your staff might want to focus on a hot new product. I always like finding products or services that require repeat, follow-up purchases. This often relies on consumable products of some sort – like razor blades, for example. If you and your staff can highlight a razor blade-like product, you are setting the stage for more than just a single sale. First, your store will be top of mind when it is time to replace the unit or some part of the unit. Second, if you're really on the ball, you can sell a subscription to the part, thereby having the customer agree to have the replacement parts (razor blades for example) sent to their home once a month by automatically charging their credit card on file. Assuming you won't have tens of thousands of subscribers, you can keep track of this using index cards, as a low-tech example.

My water filtration system in my house needs new filters every three months. They show up at my door at the prescribed time and that serves as my reminder to switch my filters. My plumber gets my repeat subscription business, my loyalty and remains top of mind whenever I need more significant plumbing work done.

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If you can't close the subscription sale, make a note of that customer anyway – now you have an excuse to give them a call/e-mail/text/direct mail piece to remind them to replenish.

Independent retailers need to stop worrying about the Wal-Marts of the world and start putting themselves in the shoes of their customers. Use your objectivity and realize the many ways that you can sell more to your customers and offer above average customer service and convenience.

Win-wins do exist; you just need to be creative in order to find them. When you do, you'll be operating at a level that no major retail corporation can effectively copy and you'll be rewarded with loyalty, increased purchases and referrals from your customers.

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.

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