What to Do When the New Kid in Town Is a Big-Box Store: Five Ways to Differentiate Your Small Business

The rumor is true. A new superstore is coming to your town and small business owners are worried. How will you compete with these big-box stores? While it’s reasonable to believe that challenging times may be ahead, it doesn’t have to be the beginning of the end. It could just be the beginning of a new normal. Here are five ways to differentiate your small business so you can better compete against bigger businesses and carve out your piece of the market.

One of the mistakes some small businesses make is attempting to compete with big-box stores based on price. Often bigger businesses have sophisticated supply chains that allow them to buy in large quantities with negotiated prices and delivery. It’s difficult to replicate that on a smaller scale. So what other alternatives are available?

Here are some options to consider:

  • Sell Value, Not Price – People are often attracted to superstores because of their low prices. But ask if they have trouble finding a knowledgeable store associate and their enthusiasm wanes. That’s where small business can excel. Competing based on service adds value to the products you offer. For example, your price for a cordless drill may be higher, but you’ll get them the model they need and show them how to use it. And you may also give them some ideas on how to tackle that home improvement project.
  • Reward the Regulars – Look for ways to strengthen your relationship with existing customers. Some businesses offer loyalty programs that provide incentives for repeat business. For example, a restaurant might have a card that is punched after every purchase. Once the card is full, the customer gets to order their favorite homemade dessert on the house. Another idea is to name a weekly dessert special after the customer. Imagine the word-of-mouth attention that will get with their friends and family.
  • Go Social – Social media can be a great way to develop one-to-one relationships with current and potential customers. Your Facebook or Pinterest page, for example, can help you start a conversation about topics that interest them. Not only are you talking with them, but they’re also talking to their friends about your business. That awareness can create activity for your business.
  • Trade Bricks for Bytes – You don’t have to be confined to just a brick-and-mortar retail space. Consider adding an online distribution channel. Companies like Amazon offer smaller businesses the ability to sell merchandise online. That expands your marketplace beyond your local community to new customers. For example, are you overstocked on an item? Tap into demand outside your local area by offering it online.
  • Support Local – Consider supporting a community organization with your time or resources. People like to support businesses that help out their hometown. It raises your visibility and builds your brand in a way that big corporation stores cannot. At the same time, you’re also making a contribution to the overall strength of your community.

Don’t panic when the new kid in town is a big-box store. Adjust to the new normal by concentrating on the things that make you unique – your service, your relationships with customers and your commitment to the local community.


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