Small Stores Use Creativity to Compete with Big-Box Shops

Many owners of smaller retailers and specialty shops complain that they cannot possibly compete with larger chain stores, with their steep discounts, huge advertising budgets, and powerful brand identities. This problem is especially evident during the holiday shopping season, when it seems the mall parking lots are choked with shoppers while the mom-and-pop shops, often in less trafficked areas of town, are struggling to move merchandise. But there are some secret weapons that smaller stores can use to go head to head with the big-box behemoths.

Power of Personal Service

Small retailers should accentuate the positive, says Tom Shay, whose company, St. Petersburg, Fla.-based Profits+Plus, specializes in helping owners of small stores.

"The challenge I find for small businesses," he says, "is that they fail to realize what their strengths are. They see themselves in terms of their weaknesses: 'I'm not a big box. I don't have lots of merchandise. I don't have lots of discounts. I'm not here 16 hours a day.' They say, 'Oh my gosh, look at all the things I don't have,' and I say, 'Wait a minute, look at all the things you've got that the big retailer can't have.'"

Topping the list of advantages the small store has over big-box stores is personal service. If a retailer were to ask Shay one thing to do to boost sales in the final run-up to December 25, his answer would be this: "Look at the names and addresses and e-mails of every customer you've got, and call them."

Or send them a postcard. Tell them about some merchandise that would make great Christmas gifts. Tell them you haven't seen them in your store lately. Tell them you got something in that's in their size and favorite color.

"It works," Shay says. "It gets people's attention."

The "Cheers" Effect

Terrific merchandise works, too, says Sarah Boyce, owner of Fabu (as in Fabulous), a specialty shop six minutes from downtown Nashville, Tenn.

"I was in there yesterday," shopper Phyllis Rose said last week, "and there were 15 women buying stuff -- not just trinkets. They were buying loads of stuff."

Operating out of a blue Victorian house in a transitional neighborhood just down the street from a new big-box development, Fabu's 10 rooms are packed with everything from boxer shorts emblazoned with the message "Nice Putt" to Elvis figurine ornaments. Her store succeeds, according to Boyce, by selecting unusual merchandise and by knowing its customers.

"So many of the people who come in, we pay attention to what they ask for. And most of the lines we carry you would not find at Macy's or Saks. We generally go with smaller (vendor) companies, so the merchandise is more unique."

Boyce compares her store to Cheers, the bar featured in the old TV show. "Everybody likes to go, 'Oh, that's my restaurant,'" Boyce says, adding that Fabu has that same "Cheers" effect on people. "Customers have a real sense of ownership in the shop. We know them and we pay attention to them. When they are looking for something, we try to get it for them."

One way she accomplishes this is by shopping at markets all over the country -- Atlanta, Las Vegas, Los Angeles, New York. By spreading her buying trips around, Boyce says, "We get the influences of the different coasts."

Selling More with Shopping Parties

She and buyer Kelli Blount throw in-store parties, too. Called "Girls' Night Out," the soirees are hosted by one customer who invites 20 friends to the store for a night of discounts, wine, and snacks. "That introduces 20 or more people to the shop," Boyce says, "and they tell 20 of their friends. It's a little bit different kind of marketing, but it's really the best thing that we do, so we do quite a bit of those during the holidays."

Then there are Fabu's Thursday night "Shop and Sip" affairs. "Come to the shop, drink a little wine, have a little snack," Boyce says. "It's a completely different experience than you're going to have at the mall."

Some of the 350 retailers who carry Lesley Hatfield's moisture-wicking Nite Sweatz clothes for women also have discovered the selling power of in-store parties. Four years ago, Hatfield launched Nite Sweatz in Suwanee, Ga., after designing moisture-managing sleepwear, loungewear, and daywear for women experiencing hot flashes or increased body temperature because of menopause, perimenopause, pregnancy, chemotherapy, or obesity.

Comparing the parties to trunk shows, Hatfield says, "We offer a little cheese, a little wine." The store staff wear Nite Sweatz clothing so that customers can see how the line looks on real women.

Sometimes the Nite Sweatz retailers invite their female customers; other times, they invite the husbands and boyfriends of customers who have filled out an in-store wish list so their mates will know what to buy and in what size. According to Hatfield, "The men always leave with a package wrapped up and ready to go."

Shoppers are so busy, Hatfield says. "Who has time to shop, to deal with the whole parking situation around the malls? It helps that at the little shops you can just drive right up, pop out of your car, and find just the right something in less than 10 minutes. Customer service is, hands down, what appeals to shoppers."

Small retailers say that's what they hang their hat on, Shay says, then worry that it's not enough. But it is enough, he says, especially when it's combined with merchandise that shoppers love.