Competing with Internet stores

By Taimi Gorman, owner of Gorman Publicity

I loved the little corner drug store in the south Seattle neighborhood where I grew up. It was the home of fuzzy key chains, cinnamon oil for toothpicks, and the 7-Up floats Mom bought us after playing in concerts. It was a place crowded with toys, health supplies, magazines and my favorite comic books. I went off to college as the neighborhood began to change, and one day when I returned, the little drug store was closed.

They didn’t make it for a number of reasons. Chain pharmacies became common, the malls took some business, and then several burglaries plagued them. I thought about that little drug store recently, as I went online and ordered some items I couldn’t find in local drug stores. I was able to get the items in bulk, on sale, and with free shipping. In the past 10 years, Internet sales have become one of the biggest threats to small, family-owned businesses. As customers have grown to trust shopping online, they’ve become savvy, discovering price comparisons and eBay. Sales are escalating in that arena with no end in sight.

There is such a thing as being in the wrong business at the wrong time (imagine being a slide-rule company when Texas Instruments invented the calculator), but there are ways to compete and succeed in a market competition that you’ve never dealt with before.

Specialize. Analyze what is selling well for you. If you’re a small business, you don’t have the space to carry everything the mega-stores carry. Fully identify your target demographic. Look for unique items and go after that market.

Pricing is not the only issue. There are items people will price shop for, and items they will simply impulse buy. Small businesses cannot easily compete in price wars. If you constantly coupon and price cut, you may put yourself right out of business. Go for the quality and be sure your store amenities like convenience and service after purchase overshadow the price differences.

Recharge your customer service. The advantage small businesses have is complete control over their business. Hire good people, train them well and treat customers like gold. Personal relationships count for a lot. Keeping your good customers is much easier than seeking new ones. Keep in touch with e-mail newsletters, birthday cards or special sale cards. Then, make sure they always leave your store happy!

Make necessary improvements. Now is the time to remodel, perk up the inventory and paint. Rethink your signage and storefront. Sweep the sidewalk. Customers who sense decay will not come back.

Use your flexibility and adapt. Big businesses move slowly when making changes to the merchandise mix. Decisions have to be made by higher ups. They may be sold out of summer clothing in July because they’ve replaced it with fall fashions. You can order with the weather and local demand.

Keep customer-friendly hours
. One of the biggest reasons malls have been so successful is that they are open long hours every day of the week, and people know that every single store will be open. The Internet is open 24 hours a day. It is frustrating to drive to a local business to find them closed on Sundays or Mondays or even out to lunch. At the very least, offer customer friendly hours, (and advertise them!) or they will get out of the habit of shopping with you.

Use clever, current marketing. If you don’t want to be forgotten, keep your name in everyone’s face. If you’ve been around a long time, let customers know you’re still there and ready to serve. Don’t stick with the same forms of advertising you’ve always used. Explore the demographics of all print media, TV, radio and don’t forget to utilize the free coverage good press releases can bring.

Put your business on the Internet. If you own any business at all, you must have a website, even if it contains nothing more than your hours, address and what you sell. Customers are searching for what they need and if it’s nearby they may want that instant gratification of having it now. Don’t have a friend design it. Spend the money to hire an expert in Search Engine Optimization so you will pop up during Google searches. Learn about all forms of social media.

Shop other small businesses
. Customers vote with their dollars. People bemoan their favorite places going out of business, and then wonder why they didn’t go in more often. This doesn’t mean feeling sorry for little businesses who don’t do a good job, but rewarding those who do.

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