Given the current retail environment in which sales have continued to decline, it s natural for independent shop owners to question their ability to compete. Many local merchants look at the mass merchandisers in their towns and wonder whether they can survive in their shadows. That s the wrong question. The truth is, most of the chain stores and big box discounters are struggling like everyone else. To that end, small retailers should be asking, What does it take to maintain my competitive edge?
In this article, I ll explain the four most important areas independent retailers should focus on in order to outmaneuver and outcompete their big box competition.
#1 Forecasts, Plans, And Goals
Planning is vital to a local merchant s ability to survive. Yet, you might be floored by the percentage of small retailers who neglect to do it. Everything that gives you a competitive edge on the megastores from lean, responsive inventories to the ability to cut costs quickly relies on planning. Invest the time to create a budget, sales forecasts, plans for inventory management, and revenue goals for the next few years. These are essential tools for identifying whether you re on track or not. And if you re not, why not?
#2 Numbers And Metrics
Few independent shop owners launch their businesses expecting to become accountants in the process. However, it is important that you review and analyze your financials on a regular basis. You should be able to look at your balance sheet and determine whether any problems exist. You should also be able to review your profit and loss statement, inventory numbers, and debt ratios. More than ever, developing a working knowledge of your metrics is important for making strategic decisions about your store.
#3 Staff Authority
Entrepreneurial retailers are often loathe to hand over the reins of the daily operations to their employees. They re afraid they ll make mistakes. Let them. Give your staff the authority they need to make decisions on the floor. In most cases, employees who are empowered to make decisions rise to the occasion. As the owner of the store, your goal should be on managing and coaching them.
Keep in mind that one of the reasons your customers are loyal to your shop is because you and your staff can deliver a better service experience. That might include providing detailed product knowledge or offering creative solutions to customers problems. Give your staff the authority to do their jobs well. If they make mistakes, coach them.
#4 Decision Making
The big box retailers do not make decisions quickly. The authority to do so is usually centralized, which means making a decision requires meetings and steering committees. This is a major competitive advantage for independent shops. Small retailers can decide on inventory levels, assortment variety, and any other factor that impacts their business.
Unfortunately, many independent business owners fail to be decisive. Sometimes, they feel they lack enough data to do so. Other times, they re fearful of choosing the correct course. It s worth noting that being decisive always carries some level of risk. Trust your instincts.
You have the necessary tools to outcompete the big box retailers. Your independent store enjoys advantages the megastores do not. Create your sales forecasts, plans, and goals. Invest the time to fully understand your metrics. Give your employees the authority they need and let them take the reins. Finally, leverage your ability to be decisive. You ll discover that you can outmaneuver and outcompete the discounters and mass merchandisers, regardless of the retail environment in which you re operating your store.
Author Resource:
G.A. Wright specializes in high-impact sales promotions that produce big increases in sales volume and attract big audiences. Check them out online at: http://www.gawrightsales.com
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