A large business has several advantages over a small business. To name a few, it has a large advertising budget which it uses to widely distribute its message and create brand recognition and affinity. It has buying power, allowing it to offer lower prices than its small business competition. A big business also has scale. It can access customers through multiple concurrent channels: physical locations, websites, email, and social media.
The deck may seem stacked against your small business, but it's not. You have some powerful levers you can pull to attract and retain customers. This is just as true for offline, brick and mortar businesses as it is for online-only businesses. In this guide, you'll learn about some of the levers available to small business owners and how you can pull them.
Optimize your small business's physical location
Small businesses and brick and mortar retailers have struggled against the likes of Amazon. You can still compete and thrive though. Key to your success is understanding the position you occupy in the market and capitalizing on your points of differentiation.
Unless you own an activity-based business like a medical practice or mini-golf -- where participation in an activity is contingent on your visit to a physical location -- convenient, online alternatives compete with your brick and mortar business. This is most obviously true for retail, where Amazon is now the most dominant retailer. It's increasingly true for services like banking and insurance. For banking and investments, there are online-only entrants like Simple and Robinhood. For insurance, there's Esurance.
Where online competition exists, it's typically the most convenient option for the consumer. It's often cheaper. If you don't differentiate and win on experience, you'll lose to online.
Change your hours of business
The internet is open for business 24 hours a day, 7 days a week. Customers don't need to leave work early if they want to shop on Amazon. They can browse Amazon's product catalog from the comfort of their couch at 8:00 at night.
Brick and mortar businesses need to be open during hours when it's convenient for your customers to shop. That means adapting your business hours to more closely resemble restaurants which are open during the evening and on the weekends. It means being open on Sunday. If your small business closes at 5:00 during the week, it's likely you'll miss a lot of customers who hold 9 to 5 jobs. They'll buy online because your business is the least convenient of the options available to them.
Consider core business hours during which all your area businesses will be open. When your business is in a downtown area or mall, your customers might be coming out to do more than one thing, to go shopping and get something to eat. The more storefronts that are open at one time, the more enticing your brick and mortar experience will be. If a customer wants to go clothes shopping and get something to eat, but only the restaurants are open, the customer will select a destination where they can do both in close proximity. You may have the nicest clothing or best food, but it won't matter, because your customer needs both at once.
Keep your business clean and increase its visual appeal
There's a strong correlation between the rise of online shopping and the decline of brick and mortar retail. The internet and Amazon aren't exclusively to blame though. Retail didn't adapt to its new competition. Stores were uninspired and dilapidated.
Depending on your niche, your customers may like rustic. They don't like dirty. "I like how dirty this place is," said no customer ever. Make sure your business is clean. When your business is dirty, your customer doesn't want to touch anything. They want to leave. Your establishment needs to be spotless.
In addition to being clean, your small business location needs to look more than presentable. It needs to look great! When you see products online and in television commercials, how are they presented? More specifically, what does the environment look like? It's a product showcase.
Your small business location is a showcase: a scene in which you present your products and services in the best possible light. In the context of a service profession, your storefront or office is an expression of your competence and your attention to detail. It says you're capable of making good choices.
Your storefront needs stylish appeal. Colors should be modern. Paint should look fresh. Any staging environments should be free of clutter. Customers have to feel welcomed. Your business needs to be objectively attractive. It exists as a tool to help your customers visualize themselves using your products and services.
BluDot sells furniture online. They display their furniture in well lit, clean, and stylish settings. It's easy to picture yourself sitting on one of their couches. You won't find a full trash can next to a finished piece. Neither will you see the old adhesive from a poster that had been hung on the wall or a chipped laminate countertop.
Differentiate through quality of service
Add amenities people want
Amenities make your small business a more enjoyable place for your customers to visit. Smart ones encourage customers to buy.
Best Buy staffs their locations with knowledgeable employees because customers value informed advice. Electronics can be complicated. People know what they want, but they don't know how to fulfill their intent. A customer goes to Best Buy, gets the advice they need, and if Best Buy is more expensive than Amazon, then Best Buy will match Amazon's price. As a result, Best Buy converts the customer on the spot.
Starbucks offers free WiFi because it keeps customers in their stores. It's why you see so many people in Starbucks with open laptops and working. Free WiFi is more than a nicety. One person gets thirsty and hungry several times each day. Starbucks offers its customers the opportunity to eat all their meals in the store. In doing so, they turn one sale to one person in a single day into many sales to one person in a single day.
Offer amenities. Find out why people come to your location in the first place. If you don't know, ask. Even better, when a patron asks you a question, write it down. Then, look for trends in what people are asking. Capitalize on what you learn by delivering something for free to make your product more appealing or to make it appealing more often. Experiment with different amenities on different days. Measure the results and start doing more of the things that perform best.
MartinPatrick3 is a retailer in Minneapolis, Minnesota. They sell clothing and accessories. In his 2019 SCORE talk, "The Culture Imperative - Drive Growth with Customer Obsession," speaker Ryan Estis described their service and amenities.
So, I hate shopping for clothes, but I absolutely love visiting Martin Patrick, and largely it's because of their absolutely differentiated approach to the customer experience.
- Ryan Estis
Ryan had been fitted for a coat and was stopping by MartinPatrick3 with a friend to retrieve it. Their service experience was differentiated from that offered by other clothing stores.
...I had purchased a coat from Martin Patrick and was having the alterations done...When we walked in at 2:00 in the afternoon to pick up my navy jacket, we were greeted with a welcome sign, this private fitting room, a lunch spread, and my favorite bottle of cabernet. The store has been completely shopped for me, and there were two assistants on hand...
- Ryan Esits
Your physical space and margins might not afford you the ability to provide a meal and a bottle of wine to every customer, but you can absolutely raise the bar. Offer to wrap items. Shoppers buy things for themselves. They also buy gifts, and few enjoy the experience of wrapping. Make your store the place people can shop for that last-minute gift.
Ask what your customer is doing that night. Recommend a place to eat. Offer to book a reservation on their behalf. Provide a decidedly high-end experience. If you want to get a better sense of the impact service differentiation has, listen to Ryan's full talk for free. He does a terrific job explaining.
Shopping online is convenient. If a person makes the decision to walk into your store, their in-store experience needs to be better than their online experience. It needs to be downright pleasant because you can never win on convenience. Customers can reach their phones 24/7, but must travel to reach you. You're the out-of-the-way option.
Don't make your customers wait in line. The internet doesn't. Use a mobile checkout solution like Square. When you see someone waiting, deploy your other floor staff. When someone finds what they need, ask if they need anything else. If the customer has everything they need, let them buy their items where they stand or help carry their products to the checkout counter. If your customers see a long line, they'll put down their items and leave your store. They'll remember the experience as they buy the same items on Amazon.
Customers have a look about them when they need help. Some are shy about asking. Those that are comfortable asking for help won't enjoy searching your store for a person that can assist. You're buying shoes. You find a style you like and want to try-on a pair in your size. No one's around, or a person who works there sees you and continues with their work. How do you buy the shoes? How hard are you willing to work to get help, and should you have to work at all? People choose brick and mortar retail for exactly this reason. Many stores squander the opportunity to convert visitors into paying customers. When someone yells, "Does anybody work here?!" it's a failure.
Your small business may travel to customer homes. This is often true of trade professions: plumbers, carpenters, electricians, etc. Some believe their scope is limited to the specific work they're doing at the customer's home. This is wrong. Their job is to leave the customer's home in a condition better than it was when they arrived.
Your employees may smoke. They should do it on their own time. Your customers shouldn't smell cigarettes on your employees, and they should never see your employees smoking. Neither should your customers find cigarette butts in their driveways.
Your employees should arrive clean. They're strangers in a person's home. They might get dirty at the customer's home, but they shouldn't bring dirt into the home.
Your employees need to treat the customer's property as if it's their own. If your business is working in an upstairs bathroom, your employees shouldn't track dirt up and down the stairs as they make trips to and from the supply van. If the customer's bathroom looks nice, but their carpet needs a thorough cleaning, you haven't done much for your customer. You made them trade one problem for another. Said differently, if the dirt wasn't in the customer's house when your employees arrived, it better not be there when your employees leave.
Put your small business on the internet
Your retail location may be where your small business earns most of its revenue, but you still need a presence online. Your website works for you 24/7 as it passively acquires new customers while you sleep. It's also an expression of your brand position. You need people to understand the value you deliver, especially if they're actively seeking it out on Google. It's a missed opportunity if your business doesn't feature search results. You're otherwise relying on the hope that people are seeing your street sign.
Use Google My Business
Google prioritizes local businesses in search results, and through My Business provides small business owners with a tool to manage their physical location in search results. As an example, a search for "financial planner" prominently features local results over large businesses based on the user's IP address.
Use Google My Business. Google is the internet's phone book, and it will get people to your storefront. Also use Facebook, but use Google My Business.
If you sell items from your store, chances are they can be sold online. Consider augmenting your in-store sales with the internet.
Shopify enables small businesses to operate online retail stores. Recently, they entered the business of order fulfillment, which means they'll manage your inventory and ship your products for you. The advantage of using a service like Shopify is, you can have a fully branded storefront. When you sell on Amazon or eBay, your products are part of someone else's store. Amazon and eBay own the relationship with your customer, and your products are just things the customer can buy from Amazon or eBay. You are undifferentiated. Shopify lets you keep both your identity and your relationship with your customer.
Everyone loves Amazon Prime's two-day shipping. You don't have to sell on Amazon to provide two-day shipping. Use FedEx to reach your customers at Amazon-like speed.
People go out to eat as a form of leisure. It's an activity. Two-day shipping is fast, but it's slow when you're hungry, a sensation which requires satisfaction within an hour. Traditionally, few places would deliver. Even that's changing.
The restaurant equivalents of Amazon Prime shipping are Uber Eats, Grubhub, and DoorDash. All services facilitate food delivery from restaurants that otherwise don't deliver. Traditionally constrained restaurants are able to sell prepared food online. Consumers have more options. Your restaurant could be one of them.
Build an email list
Mailing lists enable retailers and service providers to inform customers about sales and remind them about the value that they provide. They get customers to visit online and storefronts and to make purchases.
Mailing lists are valuable to more than online stores. They're valuable for brick and mortar locations. A company sends you an email encouraging you to visit their website. You send your customer an email encouraging them to visit your physical store. There's no difference.
Ask your customers if they will join your mailing list. Then, email them once a week. Share your most popular item, or send your patrons an in-store coupon. Services like Mailchimp and ConstantContact can get you started for free. Get people coming back to your store and increase your Customer Lifetime Value (CLV).
Did you know?
Did you know? We wrote an article in which we explain Customer Acquisition Cost (CAC), Customer Lifetime Value (CLV), and the meaning and importance of knowing your business's CLV to CAC ratio.
Read it now, "The importance of branding in solving business problems."
Improve the shopping experience
Give your best parking to your customers
For many businesses, especially in downtown areas, parking is at a premium. Customers don't like hunting for parking spaces. They don't like paying parking meters, and they don't enjoy walking long distances to reach the store they want to visit. All these experiences increase friction along with the likelihood that your target customer will keep driving. They'll buy the thing they need from Amazon and wait two days just to avoid the hassle of parking and going into a store.
It's a misconception that brick and mortar establishments need to be cheaper to succeed. They don't. They need to be convenient, as evidenced by Amazon. Amazon isn't always the cheapest, but it's usually the most convenient. People will buy on Amazon without first doing competitive shopping elsewhere. Brick and mortar can't necessarily match the convenience of Amazon, but you can eliminate a lot of friction.
If you're a business owner and you or your employees are parking in front of your store, you're blocking customers from accessing your location. Make it a policy for you and your employees to park in the back or in a parking garage. Talk to your peer business owners and ask them to follow suit. Reach out to your local government or Chamber of Commerce and request they encourage all member businesses to do the same. If your customers have more places to park, your business will have more customers.
Make it easy to pay for parking
You can't eliminate paid parking, but you can eliminate the task of paying a physical meter. Apps like Flowbird and ParkMobile make quick work out of paying for parking. They also keep customers shopping longer. When a person fears their time on the meter is running out, they have to leave wherever they are to feed the meter. Depending on how far away the shopper is parked, they might decide to cut their journey short and just head home.
Mobile apps let customers add meter time from wherever they are. Proximity to a meter is not a factor. If sitting at a restaurant, they can take their time and order dessert. They can make another stop at the store down the street.
Business owners need to educate consumers. Strategically placed signs, "Want to skip the meter next time?" can go a long way. Municipalities need to call prominent attention to mobile payment capabilities near parking meters and storefronts. They should provide app download links via QR codes and setup instructions. Meter attendants should be versed on the technology and able to help.
Local businesses bring people and money into communities. Most municipalities want to create an environment in which small businesses thrive. However, many lack the resources to dedicate personnel to solve business problems had by small business owners. Your municipality is an expert in running a municipality, but it is not a small business expert. Business owners need to identify solutions and let their local governments and Chambers of Commerce know where they can help. Eliminating customer pain related to parking is one of those areas.
Add a centerpiece retail destination
Your mall or downtown shopping district needs a centerpiece location to attract customers. It should fit with the character of your locale. Seek a bigger name retailer to attract shoppers to your downtown. When people are already walking distance from your storefront, they're more likely to walk into your store and buy something.
Freeport, Maine has more than 80 stores in its downtown shopping area. They're anchored by L.L. Bean. While there are a number of mainstream retailers in Freeport, there are also a lot of small businesses which earn customers through proximity to L.L. Bean and other recognizable brands.
Label your streets
Drivers and pedestrians can easily see merchant signs on main roadways, but businesses on side streets are lost. This is a problem common to a lot of businesses. A person needs to know a business exists before they can form an intent to visit it. For example, a person wants a coffee. Starbucks is positioned on the main road with its sign facing the vast majority of traffic. You own a coffee shop on a side street. Your sign is unseen by the customer because it faces only the small volume of traffic that travels the side street. The customer sees only one choice. It's Starbucks.
Cap the ends of each street with signs listing the businesses on the side street (and what they do) so that the listings face the main road. Give more people a reason to stop. You do not exist if people do not know you exist. It's not important for your business to be positioned on the main roadway, provided it's a short distance from the main road and people can see your sign from the main road.
Add outside attractions
Add outside seating. This is a great opportunity for restaurants and coffee shops. It creates a social area. More importantly, it lets passers-by see people experiencing your service and enjoying your food. When people smell food or coffee, they get hungry. Create desire.
Display fun items outside. Create an interactive experience that entices people to come inside your store for more. Physically, get closer to your customer by removing a barrier of access. When the street becomes part of your store, instead of walking by your store to get to the next store, a customer walks through your store. Go to your customer, on the street. Even if the customer doesn't buy from you, you're giving them a sense of the value you provide.
The L.L. Bean store in Freeport, Maine places kayaks outside and sometimes has a pool in which people can try them. They have a giant Bean Boot outside, where pedestrians frequently take photos and selfies.
You don't need to be a big name retailer to become an attraction. If your small business sells office supplies, encourage people to throw paper airplanes for distance. If you own a coffee shop, give free samples. Show off your knowledge by explaining the different flavor profiles of the coffee you sell or teach people about the different ways to brew coffee. If you work in financial services, have a game that's one-part fun and one-part teaching. Give away stickers and help visitors advertise for you. Create an experience.
Encourage the use of pop-up stores in empty spaces. A pop-up store is a temporary retail location which meets the needs of a trend or seasonal demand. Halloween and Christmas supply stores are popular examples.
Pop-up stores have the ability to attract a lot of people for a short amount of time. When a person stops at a pop-up store, they're more likely to stop at a permanent store close-by because it's convenient to do so.
Pop-up stores are also attractive to property owners who struggle to retain retail tenants in struggling business districts. They can capture steady revenue by taking advantage of different seasonable demands.
Define common goals and work together
There's a paradigm among some small business owners that they're alone in their pursuit to maintain the health of and grow their business: that one small business owner is solely accountable for the success of their business. It's untrue. One of the most important things a small business owner can do is to shift that line of thinking in its entirety.
Look to condominium associations. Yes, there's negative sentiment about them for disagreement among owners, but take a macro viewpoint. Individual owners work together for the mutual betterment of all owners. Business districts aren't different. Common goals produce shared benefits.
The same logic applies to work at any big company. Large companies have different departments, each beholden to different business objectives for a quarter or a year or for 5 years. Nonetheless, all its departments need to work in alignment so the company can survive, thrive, and provide employment. There needs to be a shared sense of importance about the mission, principles, and high-level objectives.
Brainstorm with other retailers
Band together with other retailers. Brainstorm ideas to attract new customers to your shared retail destination. Experiment with lots of ideas, and measure the results. Constantly adapt your approach and try new things.
Experiments don't need to be expensive. To the contrary, they should be done cheaply. The intent of an experiment is to test a hypothesis; to learn if something is effective before spending a lot of money on it.
Work with your municipal government
Start engaging your local government as a group of retailers. Partner with them to improve building facades in your retail district. Show them the work you're doing in parallel, so they don't assume you're just exploiting an opportunity to get free money. Your goal is not to survive through subsidies -- harmful to residential property owners as long-term tax burdens -- but to create a sustainable economic climate for local businesses, one which brings money into the community.
In 2016, the Institute for Local Self-Reliance (ISLR) published a report, "How Rising Commercial Rents Are Threatening Independent Businesses, and What Cities Are Doing About It." In it, the ISLR proposes six strategies to maintain the availability of affordable space for small and independent businesses. The report's Executive Summary can help your group of small business owners and your municipal government prioritize strategies to produce the greatest mutual benefit with the least amount of effort.
Always be experimenting. Small business brick and mortar retail has contracted a great deal, but your business has survived. Online shopping may provide convenience, but it doesn't provide personalized care and attention. Your business fills a gap.
Once someone is shopping in your downtown or mall, you're no less convenient than any online business. When you can differentiate, you're better than your online competition.
Partner with other small business owners and your municipality to grow and prosper together. Don't be an errand. Be a destination.