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BFS Capital Blog

5 Ways to Take On the Big Box Competitor that Just Moved In

February 3, 2017

It felt like you got punched in gut.

You were driving to work one morning and a sign in front of a deserted lot a few blocks from you read “Coming soon: Big Box Competitor.” And you thought “Maybe I should start perusing the want ads.”

Sure, many big box retailers have run roughshod over small businesses in the past 20 years, forcing established neighborhood spots out with their infinite selection and miniscule prices. But the addition of a competing big boy isn’t a death sentence for your small business. Things will be different, but you can succeed and even use their presence to improve your sales.

How do you go about this? Well there are many ways.
Don’t Compete On Price

Because you’ll lose. In case you skipped senior year economics, large companies get large discounts because they buy millions of products. You buy considerably less than millions, and trying to match their prices will get you nowhere. Instead, focus on what you can do that big companies cannot.
Go Big Online

The internet, for the most part, is free. Which means you can establish as much of an online presence as your new behemoth neighbor, and probably do it better. While many large companies hire social media departments to handle their Tweets, Facebook pages and Instagrams, those are done mostly on a national level and won’t hold much relevance to local customers.

Hyper-localize your content, using pictures of your customers, humorous references to local jokes, and locals-only promotions to make your social media a more attractive and entertaining experience for customers. If you can manage a viral-type “20 ways you know you live in our city” piece, your business will get exposure a national company just can’t create.

Similarly, your company can have a blog that relates much better to those around you. So when Wal-Mart is blogging about holiday gift ideas, you can tailor yours to things that relate to the Christmas environment where you live.
Use Size To Your Advantage

Big companies move at about the speed of glaciers. With regional, national, and sometimes global approval required for small product line changes, reaction to customer input can take years.

You, however, are like Speedy Gonzales, the little mouse from the old Loony Tunes. You can dart and maneuver and change what you do on a whim, and therefore can be a better asset to customers more quickly.

For instance, large clothing retailers often look to small shops to catch what styles are trending. So bringing in items before they do is easy. Similarly, bringing in new food items or new beers won’t require corporate or franchisor approval and you can distinguish yourself as the place to try new stuff before it’s at the big store.

Specialization is also important, since you can order a lot of small, niche products that don’t make sense for a big box retailer.

The same goes for service. You can directly ask your customers if the procedures you are using work. And if they don’t, you can change them within a day. Wal-Mart has been checking people out slowly and inefficiently since they opened their first store. And don’t look to change soon.
Optimize Service

Have you ever walked into a giant sporting goods store and asked the clerk in the shoe department about a very specific type of shoe, and all they do is point you to a wall that says “Cross-training?” That’s because the level of expertise required to work in that department is a basic knowledge of shoe sizing.

However if you run a sporting goods store, you can hire people with expert knowledge in a sport, who can point to a specific shoe that will work best for a customer. You see this with running and triathlon stores in every city, where customers don’t mind paying an extra $10-15 for a pair of shoes if they know it’s going to be the right one.

Also, the types of people drawn to working in a small business – where the money may be less – are there because they are passionate about what you do. That shows in how they relate to customers, and will bring people to your business instead of the big guys.

You can also benefit from the mistakes that large competitors make. It may sound a little shady, but go over to your competitor and see how they serve people. Ask customers as they leave what about the service they didn’t like, and make a point of correcting that in your store. Once people go in, they will likely come back for the strength of service.
Work With Other Small Businesses And Suppliers

Asking your suppliers to give you the same prices they give the big box stores is kind of like asking for an upgrade to first class when you bought coach. You don’t spend enough to make it worth their while, so you’re wasting your breath. But there are other ways of getting more out of your suppliers to help your competitive advantage.

First, you can form a buying alliance with other local businesses. This will increase your buying power, allow all of you to be at least a little more price competitive, and foster a sense of community among local businesses. IGA – the Independent Grocers Association – is an excellent example of this on a large scale.

Even if you choose to go it alone, you can use your identity as a specialty store to get products before your big competitors. If you can convince a supplier that you’re THE place to get a new clothing item, food, drink or accessory, they will offer it to you first. Building that kind of relationship is crucial in giving you an advantage over larger stores, and one that is worth whatever investment you make.

Don’t start your liquidation sale just yet. The Big National Chain moving in next door doesn’t mean your business is doomed. It just means you may need to find a way to survive. And by going local, being mobile, and making your service leagues above the big guys, you’ll find that your business not only won’t go under, but may thrive in its new environment.