While there’s no magic formula when it comes to competing
with big-box retailers, there are ways you can survive (and thrive). According
to the Jewelers of America 2008 Cost of Doing Business Survey, smart independent
retailers have not only resisted the competitive surge, but in some sectors the
tide has begun to turn.
For instance, the recently released 2008 Survey shows sales growth for independent high-end retailers (3.5%) is outpacing chain store growth of 2.5%. Retailers that identify themselves as custom/designer jewelers are doing even better, with a 6.1% sales increase over 2006.
To compete with the "big guys," retailers must:
- Look at product mix. Are you offering the same exact pieces as the Wal-Mart down the road? The more you can customize and offer unique items, the better.
- Focus on value and not on price. Trying to out-bargain the bargainers is a lose lose proposition. Your margins will shrink and chances are you can’t compete on price anyway.
- Never lose sight of customer relationships, but stay focused. If you don’t already know, figure out who your top customers are and make sure they know you appreciate them.
- Make sure your sales associates are well trained to handle a variety of customer questions and situations and that their education is ongoing. Having a knowledgeable staff is one of the key ways an independent can distinguish itself from big-box retailers.
- Know the competition. Don’t just assume you’re doing all you can to differentiate your store without actually checking out other retailers to see what they sell, how they sell it and what they charge. Also talk to your customers. If they come in with a repair from another store, find out what made them buy elsewhere so you can increase the chance that they come to you next time.
Comments