The Balancing Act
Selection, Service & Price
In a recent discussion with our General Manager and Management One Winning@Retail consultant, Scott Smith, we discussed the discomfort that many retailers feel when thinking about the reality of the proliferation of Big Box retailers in the Canadian retail space.
The reality is that independent retail can prepare itself for competition with these goliaths with some fairly simple steps. The way I see it, there are three areas that all retailers, including the big box stores, need to balance to remain viable: Service, Selection and Price. The way this triangle is balanced defines a retailer.
In general, retailers can only excel at any given two of these at a time. But, for an independent specialty retailer, that’s all they really need. Let’s break them down a bit and examine in detail how an independent retailer can use them to their advantage.
For the independent retailer there are advantages and disadvantages to the selection that they can offer their customers or clients. Generally speaking, the Big Box retailers can offer far more depth in selection across different types of merchandise. One can visit a single store to purchase everything between an apple, a picture frame, and medical scrubs. While this might be convenient, this means that the brands that the Big Box carries may be somewhat limited, especially when it comes to more exclusive brands. On the other hand, an independent specialty retailer can limit themselves to a vertical and excel in that vertical. Which leads to the next to the next corner on our triangle: Service.
The very best thing an independent retailer can do to combat the offerings of a one-stop-shop is to offer superior service.
Hoping that multinational chain won’t be able to meet your potential needs isn’t the solution.
Having a well-trained, passionate, knowledgeable staff, willing to help examine your customer’s needs and offer the best possible solutions is the key. To use an example directly from our experience at CRS, a big box employee can certainly show a woman where the bathing suits are, but a boutique that specializes in swim wear can employ an associate that really knows their stuff and can help a woman find exactly the right suit for her!
This type of boutique usually has another major difference from the big box retailer: the price they charge for their goods.
Whether it’s the fact that the independent retailer sells goods of higher quality, greater exclusivity or simply that they can’t buy the volume that is required for a better deal from the distributor or manufacturer, the reality is that it usually costs more money to shop at the little guy’s store. However, price is only one corner of our triangle, and not necessarily the most important one. If the other two corners, service and selection, hold more weight then price, the independent retailer has a fighting chance. Engaged sales associates that have knowledge of cutting edge trends, and a selection of products that are relevant, fresh, and well merchandised means return customers. If there is value in the offering of the specialty store, customers can justify spending more money.
On top of all of these points, small independent retailers are able to be quick and agile to adjust to demands of their customer base and to spot new trends in their industry. If they offer service and selection that the big box stores are unable or unwilling to offer, the scales can be tipped in the favour of success.
Andrew de Groot
Canadian Retail Solutions