Diversify or Die Trying
Since making this blog post, SignIQ has changed its name to Last Yard.
How to survive as an independent retailer in a world that is being dominated by the chains.
For today's independent supermarket retailers, the standards required to stay competitive and be successful are worlds apart from what they used to be.
For decades Woolworths and Coles have enjoyed the monopoly on the supermarket industry. As competition between the two intensifies, each brand is only getting stronger and pushing harder. Both chains are now opening smaller store formats and nestling themselves into more compact locations in upmarket areas. These areas were previously ruled by independent retailers whose prices were seldom scrutinised, as consumers expected to pay more than they would at a larger format chain store out in the suburbs.
If that wasn’t hard enough Aldi, Costco and soon to be Kaufland have found their way onto our shores. Offering promotions that have shoppers fighting each other (literally), many independent retailers are left shaking their heads, as they come to terms with the sad realisation that they can no longer compete and thrive by opening their doors of a morning and relying on their convenient location.
Furthermore, the days are well and truly numbered for any retailers relying solely on commonly offered products and services that can be found across any of their competitors. Being unable to compete on price means independent retailers need to to find other ways to stand out and compete. However, tread with caution, as standing out too much can also make you vulnerable.
I have often heard of this referred to among retailers as the golden handcuff.
So what do you do when competing on price is not a long term viable option? What’s your point of difference? What makes you stand out against your rival down the road who is potentially larger and has competitive pricing?
Customise your in-store offer
Investing the time to find out who your shoppers are and why they shop with you is invaluable to expanding your products and services. So many notable independent retailers are renowned for having a great offering. You hear it so often. “I shop here because it’s the only place that sells the special gluten-free protein bread that I like”, or “This is the only place I can find the dairy free cheese I can eat.” Time invested in staying well informed to new and upcoming trends through engaging your suppliers and more importantly your customers, is time best spent. Sometimes it’s as simple as asking your customers if they located all the products they required in your store during their visit, or asking if there was any product or service you don’t currently provide that would benefit their needs. When your customers are coming to you for your offerings, they are less interested in price and more focused on how you can further accommodate their needs.
Great customer service
Following from the above, engaging with your customers is a simple way to set yourself apart from your competitors. If you’re reliant on your first customer contact happening at the point of payment, then you're too late. Knowledge is power, staff should be educated enough on product ranges to speak confidently with customers. How many times have you walked through a supermarket looking for something only to give up because you either cannot find a staff member to help locate the item, or they just don’t seem approachable.
Well trained staff are a store's best asset.
Train your staff to be approachable and available to your customers. Nothing is more disappointing than when a customer requests a product from a staff member and without looking up, they mumble some vague directions as a confused customer walks away in the hope of finding it. Now imagine if the customer was greeted politely and walked to the product, had any questions answered about it, and then asked if they required further assistance in locating their next product. The latter scenario ensures customers leave satisfied and hopefully with an increased basket size. This rule should apply to everyone across the business from owners to front end attendants.
Create an in-store experience
With the ever increasing number of cooking and food-based shows on TV, traditional cooking is becoming more and more popular among younger generations. They thrive on the social status of heading out on a Saturday morning, coffee in hand, in search of that next meal with which they wish to tantalise the taste buds of their social circle. Catering to these boutique customer by offering product tastings and new product information sessions can help set you apart from your competition. Remember shoppers would much prefer to do their entire shop and have all their needs fulfilled in the one place, so combining your offerings with a great in-store experience is essential in staying ahead of the game.
The fact that our lifestyles are getting busier and we find ourselves eating out more, has lead to a decrease in the traditional weekly grocery shop. We have turned into top-up shoppers, buying only what we require for a few days at a time, sometimes even visiting the same store morning and night. Retailers are therefore presented with even more opportunities than ever to execute the methods above and create the point of difference that makes them stand out amongst the competition.