Customers shop the establishments operated by independent retailers for various good reasons. However, selling merchandise at discount prices may not rank high on their list. Shoppers typically find bargains or special offers on select products during limited-time sale events. Just as Walmart has built its reputation on reducing costs, independents understand that competing with the big boxes primarily on price is a losing proposition. Yet, there are ways for home improvement store owners to carve out their path to success by playing to their strengths—better assortments, exceptional customer experiences, and comparable private label brands.
While giant low-cost discounters such as Dollar General and Family are attracting shoppers whose primary concern is the cost of goods, these stores often fall short on the breadth of the product assortments and customer service. The unprecedented growth of these stores shows many shoppers are willing to adjust their expectations when faced with rising inflation, higher gas prices, and economic uncertainty. Although independent retailers should make every effort to mitigate the impact of price increases on customers, focusing on value rather than price may be a different perspective.
Offer Customers Real Value for the Price
Warren Buffet says, “Price is what you pay, and value is what you get.” Offering shoppers an extra item or free service that is unexpected is a value they will appreciate. Manufacturers often “bundle” tools, automotive products, and gardening supplies to allow retailers to drive seasonal sales and introduce new products. Each bundle is sold at a significantly lower price than the total cost of the items when sold separately. Independent retailers also have the flexibility to offer unique product assortments or sell merchandise available exclusively through the independent retail channel. Offering products that aren’t typically sold at big box stores and are relatable to shoppers in the community can be a niche opportunity that builds traffic in-store and online.
Provide Service that Exceeds Expectations
Businesses find it difficult to admit their service is less than perfect. Survey results indicate 80 percent of companies believe they offer a “superior customer experience.” However, only eight percent of customers agree. It’s essential to provide customers with a consistently positive shopping experience to maintain good relationships and grow a community of customers.
Promote House Brands and Improve Margins
At one point, consumers bought house brands as a last resort. Today people are less brand-loyal and are more conscientious about saving money on comparable products. Some house brands have become so popular that they are indistinguishable from branded products in shoppers’ minds. Promoting private label brands has several significant benefits that make them profitable to sell and market.
Independent Retailers should focus on addressing the needs of their customers to compete in an evolving retailing landscape. Consumer behavior continues to change, and quickly pivoting to accommodate new situations is necessary to deliver the best assortments, value, and customer service.