Sometimes, to get a glimpse of our future, we have to look to our past. That might sound as cliché as, “Those who do not learn from history are destined to repeat it,” but both sayings are more relevant today than they were when they first were uttered decades ago.
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I was asked recently what the biggest obstacle facing shop owners is today. I didn’t have to go very far to find the answer. Just look at the sectors that were traditionally filled with mom-and-pop-owned businesses to see where our industry is heading. Like it or not, the chain location shops are coming and if we as independent shops don’t change, we could face the same fate.
The Times They are-a Changin’
Depending on how old you are, you might remember the days when you couldn’t go to a grocery store, a drugstore, or even grab a meal at some restaurants on Sundays. Today, supermarkets are open seven days a week, some 24 hours a day. The same goes for drugstores, most of which are open seven days a week.
Many of the smaller grocery stores and drugstores went out of business because they simply didn’t change with the times. Independent shops face a similar and very real danger. Not only are many shops closed on Saturdays, almost all are closed on Sunday. This has to change in order for these shops to become more competitive.
A New Vision
Many independent shop owners belong to a training group, which consists of 20 shop owners that meet every quarter and exchange ideas to help each other improve. Training groups started about 50 years ago and have made a great impact in our industry. Unfortunately, their thinking hasn’t changed much in that half-century.
For example, members of many of these groups continue to keep hours short during the week and close on weekends because they believe it keeps costs down. In contrast, my shops are open on Saturdays, and many are now open on Sundays as well. The business I do on Sundays alone makes up for any extra costs I incur. Chances are, your shop will experience similar business. This extra business would more than pay for an extra manager to work during the week.
You also have to be prepared to spend more money than you might be used to, to reach potential customers and to keep your current ones. The chain shops are hitting your customers from all angles. If you’re a shop that doesn’t believe in advertising, you’re going to lose market share. If your shop relies mostly on word of mouth, realize that once you lose a customer to a chain shop, you will also lose that word of mouth.
Kill Them With Kindness
The reality is that the chain shops are attracting more customers because they are more convenient and provide lower prices in general than the individually owned shops. I realize that, for the most part, the individually owned shops can’t beat the chain stores on cost. However cost isn’t the only thing that attracts customers and that’s where the small shop owner can succeed.
You have to ask yourself, “Why should someone come to me rather than the chain shop?”
You have to be as convenient as the chain shops. That means providing better benefits, such as longer warranties, a customer shuttle or loaner cars and an easy to navigate website. You can overcome having slightly higher prices than your competition if you’re convenient and your benefits are better.
Also realize that all changes don’t have to happen overnight. Make it a process. Instead of closing at 5 p.m., close at 7 p.m. or 8 p.m., or try staying open for half a day on Saturday. As you expand your hours, you’ll quickly start to see your business increase.
The other thing our industry needs to change is our use of technology. Update your point-of-sale (POS) systems to move customers through easier and track them better. Develop a better website, make use of Twitter and Facebook to reach potential customers and keep current ones. We have to do a better job of communicating to our customers through technology, because the chain shops are doing it already.
Unless you have a monopoly in your immediate area, chances are you’re already battling or soon will be competing with a large chain shop. However, it’s more than possible to survive. If you’re not part of a 20 Group, consider joining one or a similar organization that matches your ideas and is aggressive in helping motivate members to reach their goals.
We have the ability and technology to change and survive, but independent shops need to wake up before we go the way of the mom-and-pop drugstore. Read your customers. They will tell you what benefits they want and if you need to expand your hours.
If you would like a list of resources to help overcome the obstacles your shop is facing, please email me at [email protected].
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