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This article is another in our series of small business retail management advice. It comes from a deep well of experience helping small business retailers, local retailers, as well as our own experience running successful retail businesses.

How to take on a local competitor with care and respect.

If you want to grow your retail business it is likely that at some point in time you will need to take on a local competitor. By take on, we mean compete with, head-on, in a category or on a whole of store basis.

While it can sound cold-hearted suggesting you take on a local business colleague, it is survival of the fittest in the world and, especially, in business. Better you than them.

The time you might consider taking on a competitor could be when you are looking at taking on a new product category, something sold in another business nearby. Such a move could likely be seen as an attack on the other business – hence the need for careful planning and management … BEFORE you make the move.

Here is advice on how to approach taking on a local competitor.

1. Ensure there is a need in your business or the community for you to move against a local competitor. The need could be in your business – the need for more traffic and / or revenue. The need could be in the community for better products because the competitor is doing a bad job or overcharges. Ensure you know what the need is and that it is enough to fuel your commitment for what is ahead.
2. Make sure that the new product category fits with your business and how you and your customers see your business.
   1. The move must make sense in terms of what you sell and what you are known for.
   2. The move must have a story backing it for you and your customers to believe in the move.

3. Thoroughly assess risks you and others working with you see.
   1. How the competitor and / or community might react publicly.
   2. How the competitor and / or community might react privately.
   3. What the competitor might invest to fight.
   4. Whether they can take on what you plan to stock and directly compete.
   5. How people might perceive you taking on a local business.
   6. To you and your health – competing takes stamina.
   7. Do you have sufficient resources for a long-term plan?
   8. What if the competitor closes? Are you ready to deal with that?
4. What will be your Unique Selling Proposition, what will separate your offer apart from the competitor(s)?
   1. You must have a genuinely unique proposition: range (deep into a niche for example), quality, brands, price, customer service or a combination of these.
   2. The differentiating proposition must be obvious and valuable to local shoppers for it is this that will justify you taking on a competitor.

5. DO IT BETTER. On all fronts. This is the most important factor of taking on a business.
   1. You must do it better, from the outset.
   2. Better products, better brands, better displays, better service, better marketing. Price does not have to be a factor if you are better in all other areas.

Taking on a competitor by introducing new products or product categories in your business can be tough anywhere. The goal of our advice is to have you plan for the move for good planning is a key factor in success.

We often see businesses take on a competitor without thought and eventually retreat having lost money. Avoid retreating by taking time to research and plan.

This article is another in our series of advice for small business retailers. While we are a POS software company, we are retailers too. Often, we are asked for advice from retailer colleagues. Here is an example of advice we provide:

That won’t sell in my shop, it is too expensive for my customers.

Before you say something will not sell because it is too expensive, consider the actions you can take that could make the product work.

It could be that you are a factor in something not selling as in your placement, visual  merchandising, business marketing and more you set the price expectation.

When you think something will not sell because it is expensive, consider that it might sell in another business. What does that business look like? Is there an opportunity for you to connect with shoppers who might shop at that business?

Here is how you influence higher price acceptable of an item or group of items in your business.

1. Display to the target shopper. Treat the product as special, something of quality, away from the usual cheaper products on the shelves. Respect the higher price, the higher quality.
2. Do not place the higher price items with cheap products. Location is everything. Set aside a location that reflects the difference of these products.
3. Price / product signs. Make them. Handwritten. Explain the product. Reflect quality.
4. Use lighting, or darkness, to draw attention.
5. Know the product. It is more expensive for a reason – quality, source location, rarity. Know the reason and ensure all staff can speak to it.
6. Don’t be scared of the price.
7. Remember you are not your customer.
8. Know if if you don’t sell this someone else nearby might or at least products in the same price bracket. Beat them.
9. Treat the higher priced product with respect, through your actions show that the price is worth it.

Here is why you would do this: new traffic plain and simple.

Every new item that appeals beyond the usual, the average, for your business is an opportunity to attract a new shopper.

Attracting new shoppers is, in our view, the single most important business activity for you every day.

As part of our small business retail management advice series, in this article we offer suggestions on what to consider about a pop-up shop opportunity.

While we are a POS software company, we are retailers too. We are often asked by small business retailers to comment on opportunities, like pop-up shops.

Definition: a pop-up shop is a temporary shop, one that is open for a limited period of time, usually around a month, rarely more than three months.

WHY?!

Like any business decision, a decision to open a pop-up retail location needs to be based on good research and the business itself needs to have a purpose. So, before you begin, think about why.

Here are some reasons to do a pop-up shop:

1. To test new product categories.
2. To supplement your income.
3. To help quit slow moving stock.
4. To enhance your retail experience.
5. To experiment with a plan b where you might land if you close your main shop.
6. To engage in targeted, temporary, competition.
7. To compete with yourself.

LOCATION.

With a pop-up shop you don’t have time to find your customers. The location needs to already have good traffic passing daily, traffic you can easily leverage. Even more so than in fixed-location retail, location is critical.

The best locations are shops that have good passing traffic that is of interest to you and that have been vacant for a while where a landlord might be happy with something rather than nothing.

OCCUPANCY COST.

Negotiate the lowest rent cost possible. Some landlords see pop-up offers as a reason to charge a premium. Only sign up for a price you are 100% happy with. If it is expensive and does not work financially, don’t sign hoping it works out, because in retail it rarely does work out better. In a pop-up business you have less time to see if it works out. Also, preferably, no contingency deposit.

LABOUR COST.

Staff the business with a lean roster. This shop is about selling. that means, products placed for a price proposition rather than beautiful displays that take time to maintain. Every staff member is there to sell and maximise revenue from every shopper visit. There is no room in the roster for fat.

FIXTURES AND FITTINGS.

Don’t spend a cent on fixtures and fittings. That needs to be your starting position. It’s a pop-up shop. People expect it to be  efficient, cost-effective. Using tables and boxes adds to the feel of the shop feeling low-cost and that can help drive sales. Suppliers can be a good source for loaned fixtures.

INVENTORY.

Ask suppliers to offer consignment stock or special clearance deals they’d like to move fast. Go for items that can be sold out of a box, to make display and ranging easier. In-box displays of particularly cheap items can work very well.

PRICING MODEL.

Price to sell. This means being below usual retail. Price to understandable price points. For example, you might have a $10 table, a $20 table and so on. Consider bundling items into packs, which make price comparison difficult.

PROMOTION.

Don’t spend money on sign writing or marketing. Use social media and bargain websites and anywhere similar where you can list the store and its products.

Host an opening party. List this as a local event on Facebook.

MANAGEMENT MINDSET.

Your mindset in managing the pop-up shop needs to be different to a fixed-location retail situation. Pop-up shops are about low cost, low overheads, low prices. Be ready to do deals. Those working in the pop-up shop needs to be different to how they would be in the fixed-location retail business.

SPEED.

You need to move fast. From the moment you sign a lease or agreement, the clock is ticking. Ideally, you’d open within 24 hours and when you are done, closing and clearing out the shop is done in 24 hours or less. This is all about maximising the time for income-production.

TRACK PERFORMANCE.

Cultivate good data that can guide business decisions for your next moves.

Is a pop-up shop worth doing? Only you can determine that. We have seen plenty of pop-up shops work well for the retailers, contribute good GP, help move slow stock and help open to the owners category opportunities not previously considered.