As the retail industry faces new challenges from shifting consumer expectations, small, local businesses are realizing that the big chains’ losses can turn into their gain.
Big-box stores are closing across the country, and not just because of competition from e-commerce. Industry analysts are also citing a lack of concern for the customer experience and a failure to build personal relationships with patrons, both of which have finally come to a head. In this environment, smaller retailers are perfectly positioned to do what the big chains cannot: leverage their own unique advantages in delighting customers and designing a whole new in-store experience.
Facing New Realities
In a recent survey by the National Federation of Independent Businesses (NFIB), small retailers shared some of their top business concerns, which included
- Competition from e-commerce: Consumers are more comfortable purchasing products on the web, and online retailers such as Amazon are mastering the art of the personalized customer experience. While online purchases still account for only a fraction of overall retail revenues, their share has increased, from 2 percent in 2000 to 8 percent in 2016.
- Competition from large retailers: Even though big retailers are hurting right now, they still have an advantage over smaller counterparts in benefiting from economies of scale. As a result, large chain retailers can typically offer comparable goods at a lower price than small shops.
- Cost of advertising: In an environment where consumers are confronted with thousands of marketing messages every day, gaining their attention has become challenging … and expensive. Few small retailers have the luxury of large marketing budgets that would allow them to create and execute large media campaigns. As a result, many must rely on grassroots efforts that — while they can be effective — are challenging to scale.
While the challenges appear steep, small retailers are tapping into their greatest assets — their innovation and their agility — in exploring new solutions and uncovering exciting new opportunities.
The Personal Advantage
In this rapidly shifting environment, small retailers are recognizing an inherent advantage that neither mega-chains nor e-commerce can match: the kind of personal, face-to-face experience that builds long-lasting relationships.
Large retailers, with their constantly shifting personnel schedules, can rarely guarantee that consumers will interact with the same people upon each visit. And while e-commerce has made huge strides in personalizing the online shopping experience, it can never approach the warmth customers feel when greeted with a familiar face, a bright smile, and a genuine (non-automated) offer of help.
Here are a few ways you can capitalize on your own unique advantages in bringing customers back to your local retail store again and again:
1. Brand the In-Store Experience
Your brand — represented by your name, logo, colors, and tagline — represents everything that makes you special. By keeping your brand in front of visitors to your store, you make a polished impression that will improve their chances of returning. Branded shopping bags are a must, and remember that you can also customize polo shirts for your staff, floor mats, and even front-desk items like staplers and pen cups.
2. Host Live Events
Explore ideas for in-store events that spotlight your best products. For example, if you own a clothing boutique, organize a fashion show and invite your best clients to model the season’s hottest looks. To maximize exposure for your event, encourage attendees to “check in” on Facebook, and create a hashtag for the photos they share on Instagram. And make sure every attendee leaves with a “goodie bag” including snacks or mints, a gift certificate for a future purchase, and an event keepsake such as a water bottle or coffee mug.
3. Create a Loyalty Program
Show faithful customers your appreciation by creating a loyalty program that lets them earn “points” every time they visit. Design an awards system that lets them redeem points for discounts (such as 20% off their next purchase), products (such as a free birthday cake), or prizes such as coolers, travel mugs, or selfie sticks.
With just a little creativity, small retailers can stand up against the competitive pressures of large chains and e-commerce and come out winning. When you tap into your own innovative spirit and give customers the personal experience they want, you’ll be on your way to building a loyal clientele that keeps traffic — and revenues — flowing all year long.