Living And Thriving With Walmart As A Small Retailer
Don't try to beat Walmart at their game!
The secret to surviving with retailers like Walmart isn’t about fighting Walmart on its terms. It’s about setting some new and different rules for your business and then working around Walmart. Retailers actually can live with Walmart in a way that allows them to survive and thrive. Just don’t try to beat Walmart at their game. Competing on price is not the answer to your concerns. You will most likely lose if this is your only game plan. Hopefully you already recognize this fact. The truth is that Walmart does an excellent job at what they do.
“Your job is NOT to sell what Walmart sells.”
Walmart does a great job of providing value to the American consumer by tenaciously and systematically holding down costs and constantly working to increase efficiency. Walmart separates itself from its competitors by distributing high volume basic items more efficiently than any entity has ever done in history. In fact, they are undeniably unparalleled in their ability to distribute merchandise at minimal cost around the globe. But Walmart offers a low cost variety of basic merchandise in a variety of categories, and that is the limit. Generally, they will not win anywhere else. Your job is to be the best you possibly can in your own niche! Walmart cannot compete with that! Remember that. So, the question becomes, “What can you be unparalleled at?”
Video From Rich Gordon a.k.a. RetailRich
There's plenty of opportunity WITH Walmart
“Find out what people want, then sell it to them.”—Sam Walton
For every 10 customers out there who are in love with Walmart, I can show you at least a few dozen others who are waiting for someone to give them a better or different retail experience and to fill their needs and wants in other ways! While I’m no Sam Walton, I would add;
“Display it effectively and put it in an environment that makes them want it!”
The good news is many customers don’t care about saving money. Some don’t like buying imports from China. Others want to be shown how it works. Some people want a pleasant or unique shopping experience and still others want to be waited on, hand and foot. Many customers want quality and are willing to pay for it. You must be focused on everything else you can do besides offering the lowest price. If a good longtime customer tells you he or she may buy from Walmart because they have a better price, consider matching the price if you can, to avoid losing the customer. But for every merchant that loses a customer to the big bad Walmart, I can show you a merchant that to some extent, may have llost sight of exactly who they were and what their job was, as a specialty retailer.
Take an Inward Look Before Blaming Walmart
The sad fact is that most of the small retail shops out there who have been finished off by Wal-Mart, never really understood what retailing was truly all about. Many of these retailers would have been run out of business if ANY other competition had come along. It's a lot easier to place blame on the big mean mega store than to look at our own faults.
If your prices were high to begin with, and your store was the same old unexciting uninteresting place for decades, you were not doing your job as a retailer. If your merchandise assortment changed at the pace of a snail, or your idea of customer service was taking the customers money at the register, you were going to pay a price no matter who opened up across the street. The only thing Wal-Mart may have been guilty of, was hastening a store's demise.
I have worked with many small business owners over the years and I love small business, but there is some old misguided idea out there that small business owners are blameless and this is not always the case. Small specialty retailers must still offer value regardless of what they sell. I talk about “the customer experience” quite a bit in my book, "A Line Out The Door.". “The experience” is about giving the customer something beyond “find-the-merchandise-and-buy-it.” It can be educational, entertaining, fun, or simply memorable, but it is always a unique, buying experience that a customer will not generally find elsewhere. You have five of the human senses to work with—sight, smell, touch, smell and taste. Use them where you can, depending on what you sell. Build-A-Bear provides the experience, through sights, sounds and feel. Disney uses the five human senses in a variety of ways. The Whole Foods Market and Trader Joe’s provide it, through sights, sound, smell, taste and feel. Keep in mind that, depending on what you sell, just watching a product being created can be a unique experience. “The experience” can also be provided by unusual, “over the top” customer service not found anywhere else. You must offer the customer more than taking their money when they're ready to pay. Find a way to put a smile on your customers face.
The simple fact is that if Walmart or any another retailer out there can do it better than you, you’re going to lose business. That’s the way it’s supposed to work in a capitalist society.
Opportunities in the Fight With Walmart and the Big Box Stores
Just look at all of the opportunities below to beat Walmart. Take a look at the list and determine what you can emphasize in your store to better separate your store from the big box stores.
·Efficiency in Buying and Distributing Merchandise (Low Prices)
·Gigantic Ad Budget
·Great Customer Return Policy
Your Potential Strengths
· Depth in Any Given Merchandise Category (Walmart’s depth in any one merchandise category is minimal at best.)
· Variety of Merchandise in Your Specialty Field (you need to be in cutting edge products or a variety of products that Walmart cannot begin to touch.
·Educated and Knowledgeable Sales Staff (“How-To” Help for Customers)
·Unique and Memorable Customer Experience
·Highest Quality Merchandise
·”Over the Top” Customer Service
·Easy to Tailor and React to Customer Needs & Wants
·Unique, Hard-to-Find Merchandise
·Latest and State-of-the-Art Merchandise
·Pleasant, Low-Stress Environment
·Convenient to Get In and Out Quickly
·Gift Wrapping Services
·Knowing the Customer’s Name
·Seminars and Classes (Training for the Customer)
Research the big box stores strengths and combat them by fitting into the niches they can’t satisfy. There are a lot of things the big boxes can’t or don’t do well. Be aware of what products the big stores sell and what retail prices they charge. One way or the other, you must know your customers “wants” and communicate with them whenever possible. Customers will let you know what they observe about your store as well as the big box guys, IF you get to know them.
Do You Get the Idea? If you still don't understand, my fear is that you may end up calling Walmart the devil all the way until you close your doors. In 2007, independent research from Global Insight showed that, through lowering prices and putting pressure on the competition, Walmart saved American families $2,500 each year (even those who don’t shop at Walmart.)We know what Walmart is doing for their customer! What are you doing for yours?
For more from RetailRich, check him out at RetailRichez