Some interesting Q&A for small retailers over at SCORE to help improve your retail business processes. The first answer, in particular, caught my eye:
In an age where so much shopping is done online, and large chain stores can offer deep discounts, what advantages can a small retailer offer his or her customers?One is the ability to offer unique products. For example, many artisans cannot support the volume demands of a big store. But customer service is particularly important. A small retailer has the opportunity to build more of a personal relationship, and have a better understanding of the customer and his/her needs.
The real key to the SCORE answer is not "unique products". That may be true if the small retailer is an artisan who hand crafts the store's wares. Often, though, that is not the case.
What is certainly true, whether the store is operated by an artisan or not, is "customer service is particularly important" and having the opportunity to "build more of a personal relationship" differentiates the small retailer from Big Box Build-It-Yourself Furniture, Inc. (for example).
Good. So. As a practical matter, what does this mean?
A friend of mine is a maître d' at a local country club. For a time he left his employment there to manage a failing McDonald's franchise. (Yes, it is possible for a McDonald's franchise to fail.) Anyway, he took it over and within 6 months had turned it around.
I asked him how he had done it.
He said that he had applied the lessons that he had learned in the club industry to the fast food restaurant. This consisted in a few simple, but important principles:
- Remember peoples' names; call them by name.
- Greet them with sincere appreciation when they arrive (a warm welcome)
- Do something memorable for them while they are there (magic moments)
- Wish them well when they depart (a fond farewell)
He taught the employees to treat the customers the way the employees would want to be treated. (See above.)
Suddenly, the McDonald's started getting repeat customers. Why do companies have loyalty programs? Because it is always easier and, yes, cheaper to retain a customer than attract a new one. We all know this. But isn't the easiest and best "loyalty program" the "Golden Rule"?
The three horsemen of the small (or start up) retail apocalypse are: online competitors, big box competitors, large chain competitors. We will address online competition and large chains in a later post.
What about the big box stores?
The big (empty, hollow) box competes largely, exclusively on price. And, sure, if people are dead set on getting the absolute lowest price and that is the only thing that matters to them, then these are not your customers anyway. Never were.
You cannot match the sheer negotiating power of these behemoths and therefore cannot match their much lower costs and therefore cannot afford to compete with their prices.
On the other hand, the big box cannot compete with you on your strengths - personal, individual attention - just like you cannot compete with them on theirs. Where they have demographics, you have names and faces. Where they have big data, you have experience and a personal touch.
I don't know how they will ever survive competing against you.
"Gustave Doré - Death on the Pale Horse (1865)" by Gustave Doré Licensed under Public Domain via Wikimedia Commons