Industry News

How Small Retailers Can Survive Disruption

The forces arrayed against the small retailer, including Amazon, Instacart and Uber meals ,are enormous and growing. Services and products are just a click of the mouse, push of a button or swipe of the screen away. So what is the small independent retailer to do? Should they wait meekly until the inevitable destruction of their business? Frankly, I believe they should fight back.

A small, local retailer has several advantages over the internet’s giants and the consolidated large chains. Several of these advantages are traditional strengths. But there’s also new technology that gives them almost as much leverage as the internet behemoths.

Strong Points

The small operators’ greatest advantage is knowing their customers. As independent retailers, they are perfectly positioned to understand their community, neighborhood and the idiosyncratic aspects of living and doing business there. They know these guests not as an algorithm or a computer program would suggest, but as real human beings who have a personal relationship with them and their business.

To strengthen this relationship, the independent operator should get to know its customers more. Staff should recognize, identify and call regular customers by name. Even better: Implement the real-world equivalent of the Amazon suggestion box by knowing what customers buy, have the items ready in advance and suggest additional things based on their buying history, the time of year or cultural background.

Customer service is the next big weapon in the local retailer’s arsenal. This is defined as a clean store, well-stocked shelves, reasonably priced products and a friendly and helpful staff. Once again, this is an experience that cannot be provided through a computer screen. Offering a real-world interaction where customers can express their needs, desires or complaints and receive a response is a very strong competitive advantage.

Believe it or not, the fact that a retailer is smaller than Amazon and Whole Foods can work to its advantage. By having a more limited and well-curated selection of products, the independent operator can provide customers with a quick, convenient place to shop. But it requires knowing what customers want and keeping it in stock. In our experience, it takes two visits in which a customer does not find what they want before they start going to another store.

Tech Tool Bag

In addition to these tried-and-true traditional approaches, what new technologies can help small retailers compete?

The smartphone is the easiest way to connect with people today. A retailer with the time and resources can create a local social-media platform, which can be a great equalizer with the major companies. Through it, the retailer can provide loyal customers with updates about the store, activities and events, as well as information about products or programs that employees don’t have time to communicate during the store visit.

To make a social platform work, whether it is Facebook, Twitter or email, a retailer needs to give customers a reason for investing their limited time in it. This can be built around products that are unique to the retailer’s store, exclusive events, local community involvement or pricing and promotions.

Technology allows small retailers to stay up to date with trends. They can purchase up-and-coming products in advance to ride a fad and take advantage of the impulse profit margins. It also allows the retailer to have a better understanding about when a fad is “burning out” to avoid being trapped with dozens of unsold cases of the popular item. The store can be the trendsetter in its neighborhood.

By combining the traditional aspects of the c-store business with new technology, small retailers do not have to be disrupted. They can compete with the large companies by focusing on the basics and being aware. Independents don’t have to bow to anyone.

ROY STRASBURGER is president of Strasburger Retail. Contact him at roy@strasburgerretail.com.