Can Small Retailers Compete With Big Box Stores?

For most small retailers, the answer is "NO".
Even if they could compete on price, they simply don't have the resources to match the "conveniences" offered by Big box stores, such as:

  • weekly sales flyers
  • lots of parking spots
  • extra long store hours
  • expansive inventory
  • one-stop shopping
  • generous return policies
  • online cataloge & ordering

For time-strapped consumers, these big box store conveniences are often the deciding factor. Retailers who don't understand this will continue to wonder why the locals "didn't even give them a chance to price-match."
My advice to smaller retailers is this: try to complement (not compete) with the big box stores.
For example, if the big box store is targeting the low-to-mid price market segment, then you should instead focus on serving the mid-to-premium price market segment, where you can successfully complete on the basis of superior product and customer service.
Such transitions not only get the small retailers out of harm's way, it also allow them to "piggyback" and benefit from the additional retail traffic that big box stores bring into their community. Now staff at the big box stores can send shoppers (even out-of-town ones!) your way when they can't find anything suitable at the big box stores.
Transitioning to a specialty store means learning to compete on the basis of superior product and customer service, instead of on price. Therefore one of the most imporant task for a specialty store (or any service-centric business) is to educate their market, to demonstrate why your products and services deserve the price premium.
Next time, I'll introduce you to my favorite tool for educating and connecting with potential customers.