I was talking to a business owner the other day and she gave an example of laughable customer service at an outlet of a behemoth chain of retail stores. A prospective customer at the retail outlet had asked for an item but the manager said that they don’t stock it. When the small business owner heard this she took the customer and the manager to the top shelf and showed the manager where it was stocked in his store. The small business owner just shook her head and said it was fantastic for a small business competing in the same field.
One doesn’t want to always rub it in for the outlets of these large retail chains who possibly don’t spend enough on staff training but it happens too often to ignore. For the small business owner, yes, it does provide an opportunity. Such low levels of customer service and retail knowledge gaps like this open up and provide opportunity for small business owners.
Another thing: when I was at the retail store of the small business owner she was selling an item at half the price that you could buy it at the large retail chain outlet. I checked this for myself and that’s what made me buy the item at the small business.
It’s not often that a small business has the opportunity to provide lower prices. But with some of the large retail chains overcharging, it provides a real source of competitive advantage for the smaller business if they are able to source at lower cost and keep their prices attractive for customers.
If you are planning to launch a small business, whatever type, take a look around and identify the weak points in the larger business. You may be able to offer better quality, faster and more friendly service and provide expertise that is sorely lacking in the large retail chains.
Price is always difficult to match with the giant buying power of the behemoth retail chains so you need to look at different ways to compete on price. Maybe you can source substitute products at lower prices with quality as good as what is offered by the large businesses.
If you can’t compete on a lower price then you might find a gap to provide higher priced products of superior quality compared to the Asian manufactured goods in most of the large retail chains.
For example, often there are locally-produced products that may be slightly more expensive than the imported products but provide far greater quality.
A product that comes to mind is mens shirts. For many years now the large retailers have replaced locally produced clothing with Asian manufactured goods. But from hard-won experience the locally produced clothing is often of a superior quality. It can be worn for longer and doesn’t fall apart after being used for the first time.
By knowing your competition, even if they are giant mass retailers, you will be able to find their weak spots and use them as a source of competitive advantage for your small business.