If you own a retail small business, you know all about tough competition. First, you had the chains in the mall. Then the big box stores, now online retailers, some who sell below your cost. (How do they do that?) Some customers use your store as a showroom, checking out your products, then ordering online. (How dare they do that?) Rents increase. The middle class shrinks. How can a “mom-and-pop” survive?
Whether you sell clothing or candy, toys or teapots, shoes or shaving supplies, I have good news for small retail businesses. You can outsmart the competition. You have to.
Recently, I spoke to a group of independent grocers at the Food Marketing Institute’s Midwinter Conference. These were owners of small, independent grocery chains with a handful of local locations. These types of grocery stores used to be the backbone of their communities; the kind your mom shopped at every week.
But the world of food retailing has changed dramatically.
Before, these small grocery chains used to compete with the A&Ps, Safeways, Krogers. Today, they’ve got a whole range of competition. The big guys: Walmart, Target, Trader Joe’s, Costco. Farmers markets: consumers wanting the very freshest produce they can buy. Convenience: online ordering and delivery services like Instacart, Google Express, or Amazon. And innovators: last year, consumers spent more than a billion dollars on home-delivered, fresh-food meal kits from companies like Blue Apron, Purple Carrot, Plated, or Fresh Direct.
Add to this the confusion of an ever-changing American diet. Gluten-free, dairy-free, sugar-free, fat-free, vegetarian, vegan. How’s a grocer to keep up?
But there’s the good news for small grocers: Americans eat a billion or more meals a day, every day. There’s room in the market for them to survive.
The other good news – and this applies to all independent retailers – is consumers are increasingly shopping local. Just look at these numbers for 2015’s all-important Thanksgiving Day shopping weekend:
- Thanksgiving Day itself – $1.8 billion
- Black Friday – $10.2 billion
- Cyber Monday – $3.1 billion
- Small Business Saturday – $16.2 billion
Shoppers are willing to embrace small, independent retailers and spend their money with you. You just have to give them a reason to.
The keys to surviving as an independent? Here are five:
- Find a niche. Sometimes to go big, you have to go small. Look for a clear, distinct segment enabling you to stand out from competitors. For example, in the grocery world, those grocers who focused on premium, natural, or quality products fared better than those focused on low price or catering to a mass market. Many of these mainstream, large supermarkets actually lost money.
- Change your product mix. Are you selling what consumers want or what you’ve always tried to sell? Take a lesson from the small grocery stores and search for new income sources. Many grocers have succeeded by pivoting to new offerings, such as holiday whole meals, prepared foods, housewares and gifts, craft beer, even food “bars” – poke, kimchi, burrito, sushi, sandwich.
- Get found online. Customers are out there right now looking for local retailers that sell what you offer. Is your website mobile-friendly? Most prospective customers search on mobile devices. List your small business free on Google My Business; Bing Places; Yahoo Local; Yelp; and Americanexpress.com/ShopSmallMap. Set up a Facebook account but don’t spend all day on social media. Stay in touch with an email newsletter.
- Become a destination. Think of yourself as more than a retailer. Consider holding events. Small grocers host BBQs and food trucks in their parking lots, offer cooking classes for adults and kids, use their event space for wine tasting and pop-up specials. Make your store a fun place to be, not just another stop on your customers’ list of errands.
- Be part of the community. If you want your community to support you, support it. Donate to local charitable organizations and schools, sponsor community events, and be visible in the community. Remind customers you’re a part of their community and an inviting place where neighbors bump into one another. And make “Shop small, shop local” your rallying cry. We’re all in this together.
Copyright, Rhonda Abrams, 2016
This article originally ran in USA Today on March 18, 2016