Here is practical advice for local small business retailers based on our years of service of such businesses:
Big businesses – Big W, Woolworths, Coles, K-Mart, Target, Officeworks, Staples – all need volume for any move they make, any promotion, any catalogue, any front of store offer.
The operate on seven and fourteen day cycles. Rarely, they will run something for a month.
It is almost unheard of for them to run an offer, promotion or deal longer that two weeks.
It is important to know this as it can help you deal with them competing with you on price, which they will do.
These majors set their own price. Most times they do not tell their supplier. They get the product shipped to their distribution centre and from there they ship to stores for when the catalogue hits or TVC starts. It is rare for a supplier to know any of the details – unless it is tied to a movie release or so other national promotion.
It is important to know these points as we often see retailers complain that the supplier has been complicit in a discount offer. Usually they are not. But even if they are we do not blame them as theirs (the supplier) is a volume business and small business cannot deliver the volume they need to maintain their status with the brand owner.
Here are tips for dealing with a competitor challenging you on price:
- Rest your products while they discount. This is not recommended but we acknowledge it is an option.
- Stick to your guns. Don’t change a thing. But educate your staff with a story about price, big vs. small and the importance of local small businesses.
- Renew the pitch of your loyalty program. For example if you run discount vouchers that could be more valuable than a short term discount.
- Promote your exclusive product.
- Keep your display full.
- Offer amazing shop-floor customer service.
- Show off your product knowledge through Facebook posts.
- Add value where possible.
- Run a competition for people purchasing the target product through you. This helps to differentiate your offer.
- Package to make price comparison harder.
Try and not get hijacked by stress about a competitor. Being stressed will not alter the situation. It is what you do that matters. Exercise control. Be a competitor.