In this tenth and final part of a series of articles about how to survive as a small retailer, I will summarize the main points from the articles and have a look at what the future holds.
Retailing is one of the toughest businesses there is. The reason is that, although trade may be steady, it is a low margin business. This means you work long and hard for little reward. You are in a market where the customers are very knowledgeable about the products they are buying and the have a preset idea of what range of price they are prepared to pay. You are in a business where “the big order” never comes. All you can do is grow your business steadily and hope that a superstore doesn’t open over the road and steal your customers. If you seriously struggling as a small retailer, the first thing to ask yourself is “am I ready for the fight?”. If you have doubts, it may be time to quit right now. On the other hand if you are up for it, by working to your strengths as a small retailer and by hanging in there, the rewards may be better than you imagined.
Some people bemoan the demise of small stores and blame the large chains for their downfall. Superficially this is true, but this is like Yahoo! blaming Google for its downfall (should it ever happen) or radio stations blaming television for losing audience and advertising revenue. I suspect that few of the people who want small stores kept as museums would be prepared to support them by buying goods from them if they are given the choice of better value for money in a chain store over the road. So get real. Forget blaming the opposition. You need to do this for yourself. You never know, you
may one day expand your business into a large chain yourself – and then the little guys may all blame you!
If you are struggling as a small retailer then the most obvious thing you need to do is to change what you do. Some changes may be low cost and easy, others may require you to invest in the business and will mean a lot of effort and commitment. The key thing is to compete with other stores by working
to your strengths. The greatest strength a small local retailer has is that it is small and local. Large chains cannot be small and, although an individual branch is local, it’s primary focus is to the company and not the community it serves. Large chains will never be good at buying local products. Fragmenting buying power from localities is a contradiction of the way large chains are structured. They buy in bulk for a large customer base spread over large areas – that is why their prices are competitive. On the other hand, a small retailer can forge links with local producers. There may be a factory down the road that makes toy cars (OK then, a factory down the road that imports and packs toy cars that are nowadays made in China). You may also have a local dairy that sends their milk to a large store chain but may be happy to sell you a few pints each day. Explore your locality – you may be surprised at what you discover, and the bargains that you can negotiate by going straight to the source rather than through a wholesaler. Offering your customers local products is a good way of demonstrating one of your greatest strengths and having your own unique selling point (USP). You may even be first in the queue for new product trials. This will give your store a very specific and potent USP.