You Can’t Compete with the Big Box Stores So Don’t Even Try

You can’t compete against the Big Box stores – for their customers, so don’t even try. The good news is that they can’t compete against you – for your customers.

You can do more than just compete, you can win against your big-box competitors by implementing a three-pronged hybrid strategy. I recently wrote about the first one of those strategies-Using Data to Drive the Bottom-line. You can find that post here. In this post we’ll look at the first part of strategy number two: Differentiate to Dominate!

The Big-box Stores all strive to look alike. The same color schemes, the same products, the same layouts. Within each store brand, they want every one of their stores to look like every other one of their stores. So your strategy is to be different.

There are five main areas where you can differentiate your business from your competition:

A) Differentiate on service – Would you agree that the bar for customer service is pretty low? So it doesn’t take much to stand out when it comes to customer service.

How would you rate the customer service you currently offer? Is it worth bragging about? If it is, that’s great. If not, here are some action items for you: Find good employees, train them well, treat them like superstars and they’ll treat customers like superstars.

What do I mean by good employees?

Not long ago I was finishing up a project and needed some supplies, though I wasn’t sure what. I went to my neighborhood office supply store to have a look. The clerk offered a pleasant greeting and inquired about my needs. She listened carefully then offered some great suggestions. Do you think I cared at that point whether I could purchase some of the items for a few cents cheaper at the big-box down the street? Of course not.

The clerk modeled the characteristics of a good employee. She was confident yet friendly, patient, articulate, respectful, positive, and empathetic. I felt that I was being helped, not sold to.

So it’s likely that she was also taught both sales principles and sales strategies. Though I didn’t have any problems that needed to be resolved, the clerk was likely well versed in problem resolution. There was no doubt she had extensive product knowledge. This last one is extremely important because knowledge is selling power.

If you want to convert tire-kickers into people who buy today it takes knowledgeable professional sales people. It takes knowledgeable professionals to turn single unit sales into multiple unit sales by suggestively selling additional products and services your customers can use.

By now, are you thinking – this training must be expensive? Are you wondering – what happens if I train them and they leave? Well what happens if you don’t train them and they stay?

Harry Friedman, author of “No thanks I’m just looking” writes that with effective training you can increase sales by 15 to 25%. How is that possible?

Let’s say that 2 out of 10 people who walk into your store make a purchase. That’s a 20% conversion rate. If your sales staff can apply professional techniques and raise your conversion rate to 30%, you’ve just increased sales by 50%. If your current conversion rate is 40% and you raise it to 50%, you’ve increased sales by 25%.

Here’s another perspective: Your average sale is currently $30. If your newly trained sales staff can raise your average sale to $40 by upselling or by suggesting additional, complementary items to someone who has already decided on a purchase, you’ve increased sales by 25%.

These are small improvements that produce large results. So, no, I don’t think sales training is expensive. It’s truly an investment in your store’s success.

When you provide a higher level of customer service, you attract loyal customers who are less price sensitive and who shop with you again and again.

B) The next way to stand out from your competition is to Differentiate on merchandising.

When I was about 10 years old my father took me to a store that scared me. And that image has stuck with me. The aisles were narrow, the lights were dim and the shelves were really tall and messy. The floor, if you could call it that, was mostly broken or missing asphalt tiles.

What’s your customers’ first impression when they walk in your door? Is your store dark and scary, or open and inviting?

Your action items are to ensure your store has inviting, creative floor plans; that you’re making effective use of lighting and attractive colors; and that you have eye catching displays that attract your customers’ attention. Visual impression matters.

If you’re lucky enough to have a store front facing the street, step out of your store and look at it from the outside. Are you giving your prospects and customers something to look at that shows them what you have to offer. Are you driving foot traffic by enticing customers into your store?

C) Differentiate on products and services to set your store apart from your competition.

On the most basic level, offer the services your competition doesn’t. For example, if someone buys something from the competition and that item needs repairs, who does the repairing? Or alterations? Or installation?

If your competitors don’t offer those services and you do, you become the one-stop shop. Even if you don’t offer the services yourself and only arrange for them, you are still offering something your competitors are not.

You also gain competitive advantage by carrying the products your competitors don’t. Can you offer products unique in your marketplace, or be the exclusive source? Can you offer private label products? It’s hard for your customers to price shop when you’re the only source.

Does it make sense for you to emphasize your ‘Made in USA’ products? Or promote another Country of origin: “Exclusive retailer for Brazilian Pottery”?

When it comes to the products you do stock, customers are interested in a broad choice of product categories rather than a depth of products within each category. When there are too many choices within each category your customer has a hard time choosing, so they don’t make a purchase. Carry a few items within each category and have your knowledgeable, professional sales staff help each customer make a wise choice.

How fresh is your inventory?

When I was a teenager my father sold folk art at flea markets and art festivals. He’d have me show up at noon each day and bring in new inventory. I was always amazed at how quickly buyers would flock to his booth to check out the “latest” merchandise. They’d buy like crazy, too.

Customers want to believe that they’re getting something new, something fresh.

It’s not that you have to throw out all your inventory and stock new items every week, but your inventory has to appear fresh. How many items in your store are covered in dust because they haven’t been touched in months?

Try this: take any display that isn’t producing the sales volume you would like and relocate it within your store. This is likely to spark interest in returning customers because your layout and displays will be different. Different is fresh.

I recently talked with a store owner who uses his in-store security system to help him decide where to place displays. He watches a playback of his security video at high-speed. Traffic patterns through his store and how long customers spend in front of each display are magnified.

He knows which displays need to be refreshed or relocated by making note of where customers don’t spend much time.

There is a caveat! If you sell staple items—items that customers are used to grabbing off a particular shelf without having to think about it—don’t mess with those items. Leave them right where they are.

Cross-merchandising is a win for both you and your time-starved customer. By clustering complimentary merchandise together, you increase your sales volume, your customer saves time searching for the additional items and it provides additional value to the customer.

Complimentary merchandise should be prominently displayed near its pairing. Make it easy for the customer to see what to buy in addition to their initial selection. Also, when a customer makes a selection from one category, your sales staff should automatically be thinking about and suggesting all the complementary categories for that item.

Think beyond your own products and services when cross-merchandising. Collaboratively pair your merchandise with complimentary merchandise from other local retailers. You provide the customers with added value, and you will likely draw from a new pool of customers.

Another merchandising advantage you have is the ability to act quickly in response to changes in lifestyle that drive changes in shopping behavior. What trends do you see around the next corner or over the next hill that you can proactively take advantage of?

Next time we’ll look at part two of my second of three hybrid strategies you can use to win against your big-box competitors.

Bob Roitblat
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Bob Roitblat

Bob Roitblat is a Leadership Capabilities Expert and TEDx speaker. He helps organizations ignite creativity, overcome challenges and capitalize on opportunities. Bob is also the president of Mainsail Consulting Group, a business-advisory firm. Also connect with Bob on LinkedIn, Twitter or Facebook.

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Bob Roitblat
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