I have a secret.
It’s something that will help you, but it’s not new information. In fact, it might be right under your nose.
I am often asked if there is a way for small operators to compete against their larger competitors. The question has taken on even more significance during this time of pandemic and the accompanying economic turmoil that has come with it. Not only do we have to worry about other convenience stores, but the competition with grocery stores and online delivery programs has also become even more intense.
Over the last few months, fuel gallons are down, people are making fewer trips outside the house, unemployment has risen, and consumers have less money to spend. All of these factors work against the small retailer. And, unlike our larger competitors, we don’t have the marketing budget, the brand recognition or, frankly, the support of our suppliers to help us win and attract new customers. As small retailers, we are on our own.
Now, for the secret. As I said, it is right under your nose. The way to stay in business and to stay relevant during these times is to become part of your neighborhood.
You need to be very aware of the people who live around you. In today’s world, when someone talks about “local” retailing, they are usually talking about artisan foods, farm-to-table products, and handcrafted organic consumables made by flannel-clad millennials who live in a forest. That’s not what I’m talking about here. With this strategy, everything you sell can come off a truck or from Sam’s. This isn’t about having special products; it is about having the right products.
Part of this idea is very basic — discover the ethnic groups, economic levels and age demographics of the people who are your future customers. More importantly, you need to find out how your neighborhood lives. What are the rhythms and the cadence of the people who live around your store? What motivates them, what worries them, how do they relax, and what do they need to get through the day, the week or the month?
I have spoken to many retailers who are very hands on in their shops. They have their regular customers who come in every day and buy the same items. The operator knows the products the regular customers want and, often, already has them out when they arrive — showing the customers they are valued, and making the transaction as easy as possible. That is excellent! However, I propose that this level of customer service is merely the baseline for staying in business throughout the rest of the 2020’s.
You cannot wait for your customer to come to you; you need to go out and find your customer.
Typically, this type of customer loyalty has been developed by the store operator through the process of waiting for the customer to come into the store, recognizing the repeat customer, learning that customer’s preferences, and anticipating their arrival. Today, that level of care and attention needs to be taken to the next level. You cannot wait for your customer to come to you; you need to go out and find your customer.
In my experience, most independent owners of small stores don’t live in the neighborhood where their store is located. They may live a couple of miles away or more. While they are familiar with the area where they do business, they don’t know their market area. The operator needs to take the next step — they need to truly understand what makes their market area tick.
Gaining this information can be done simply and very inexpensively. All you really need to do is slowly drive, or preferably walk, through the community that surrounds your store. Pretend you are a visitor on a walking tour around the area and that it is your job to observe and make notes about what you see in a four- to six-block radius around your store. Walk up and down every street and go through some of the alleys.
Notice the different types and styles of housing and the make and number of cars in front of each house. Do you see children? How old are they? Are there families living together or single people hanging out in the neighborhood? Are there a lot of people around during the day? Do you see them outside? If you go by at night, are they outside with friends or inside watching TV? If you look into a garbage can, do you see bottles or cans of products you don’t sell? What other types of shops and restaurants are in the area and what do they sell? Are they busy?
All of these things will give you a better understanding and a more defined image of who your customers will be. You may have to make several trips before you see enough to come to a conclusion.
Once you feel you have a deeper understanding of your community, you need to go back into your store and take another look at the products you’re selling and how you’re presenting them.
Once you get past your top 20 sellers, does the remainder of your products reflect the neighborhood and the lifestyle around your store? Is the pricing in line with your understanding of your community — are your prices too high or too low? Are there opportunities or needs you have noticed from your tour that can be met by your store? These could be items for special holidays, types of food, toys, products you saw in the garbage can, or other products inspired by what you have seen. This is about selling the things your customers want to buy; it is not about what you want to sell.
One of the most important things to remember is that your community is not one monolithic entity. There are different types of people, genders, ages and ethnicities living around your store. The products in your store should reflect the mixture you have seen in your neighborhood. Your product selection should be as diverse as the community around you so that you can attract the greatest number of customers.
The goal is not about becoming a specialist company. It is about understanding your community and providing them with the products they need and want. The more you reflect the makeup of your community, the deeper ingrained in the community your business will become.
So, congratulations on now getting to Stage Four. (Stage One: treating the customer right; Stage Two: getting to know your neighborhood; Stage Three: carrying the right products and services.) Once you have an understanding of your community, walk through it again. Look for the places of worship, community centers, hospitals, nursing homes and senior care facilities.
All of these places and organizations will have some type of community outreach program or constituents who need help and support. Get involved. Provide services, products and programs that help make your community a better place. What you do in the community will come back to you tenfold and people will remember you and your store. They will support you in difficult times the same way you supported them when they were having troubles.
The greatest advantage that a small retailer has is the opportunity to understand, be a part of, and meet the needs of their local neighborhood.
The greatest advantage that a small retailer has is the opportunity to understand, be a part of, and meet the needs of their local neighborhood. Your store should reflect the values and the needs of the people who live around you. The critical part is going out to find out about your customer. Don’t wait for them to come to you.
Published in: Convenience Store News – September 2020
Roy Strasburger is president of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. StrasGlobal operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them.
Learn more at strasglobal.com.