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There’s only one way to become a destination retailer. There may be different paths, but they all lead to the same place: You have to create a convincing reason for consumers to drive past your competitors to get to you. It is to the pursuit of this often elusive goal that Jon Schallert has dedicated his career. Owner of Schallert & Associates, Sorrento, Fla., he spent many years working in retail before leaving to become a consultant, helping independent retailers grow their businesses.
"If you are trying to compete on only product and price, you’re eventually going to get wiped out," Schallert said. "You can’t make it on just that these days. Bigger stores can carry a larger selection, and the Internet can beat you up on price."
Instead, Schallert said, you need to create a compelling environment, something that draws consumers to your store. One way to do that is to offer certain niche products or services associated with your core product line. "Try to find suppliers with limited distribution capabilities, so they will bring hard-to-find products into your store that aren’t seen in other places. Or offer a service no one else has in your market area," he said. Of course, customer service – good or bad – can make the difference, too. Schallert gave an example from his own experience of what an independent photo retailer should not do.
"I went into a camera store recently to buy a digital camera. It was higher priced than on the Internet or in a catalog or at other stores. The store didn’t have any of the accessories. The employee didn’t know how to use the camera and couldn’t really tell me about it," Schallert said. "So, I ran over to Office Depot. They had the camera at the same price as the catalog, and all the accessories, including the carrying kit. They explained to me how to use the flash without blinding people and they directed me to an Internet site that talked about using this camera effectively. It bonded me to them, even though it was a big chain office store. But the salesperson went beyond what he needed to do, and this is what caused me to complete the sale."
Marketing
Another method is to use effective marketing to promote the perception of your store as unique. "Marketing has to be more personal than prepackaged. You want to avoid advertising that is price-oriented or has a hard-sell feel. You and your store develop a relationship with the customers who enjoy doing business with you – your marketing should communicate the personality of your store and that relationship," Schallert said.
To best accomplish this, retailers need to know who their best customers are. "You should identify the 20 percent of your customers who are your best buyers," Schallert said. "Come up with questions to identify that upper niche. Ask things like how many rolls of film they shoot per month, or how many cameras they own. The important thing is to figure out qualifiers that will identify this upper niche. Then, identify the people who do business with you at a lower rate, but who are significant. Last, find the 10 to 20 percent who are the bottom feeders, just shopping for a bargain. You don’t want to waste too much time on them; you could spend vast amounts of marketing dollars on those people for very little return on your investment."
But once the members of the other two groups are known, marketing can be developed to appeal specifically to them. Consider why they are your best customers, and use that information to your advantage. "Courting that top 20 percent will help the whole business," Schallert said. Regardless of the message in your marketing efforts, however, retailers need to communicate personally with customers via a variety of means: phone, mail, fax and e-mail.
"There are a couple easy ways to gather both contact information and answers to your qualifying questions," Schallert said. "You can have a drawing in the store and give away a $50 gift certificate once a month they have to fill out a qualifying form to enter. Have five or six questions for them to answer to be eligible for the drawing. You could also turn that into a form of advertising in a newspaper or magazine. They can cut out the entry form and fax or mail it in."
Physical environment
Simply looking different than your competition can distinguish your store also. "Think of all the competitive outlets that sell the same products you sell," Schallert said. "Think of how their merchandise is displayed and presented, and the feeling your customer gets when they walk into your competitor. Then turn that around in your store.
"If, for example, every store has cameras lined up with their prices, maybe the focus of some of your store windows, walls or aisles shouldn’t be product at all. Maybe a better idea would be graphics showing you actually helping customers select cameras, or fixing them, or doing some intense customer service activity where you save the day. Instead of illustrating product and price like everyone else, you’re communicating extra service," he said.
– By Jennifer Barr Kruger
e-mail:mailto: jkruger@pmai.org
Retail case studies
Unique products
Retail consultant Jon Schallert tells of a retailer in Carbondale, Ill.: "This is a 300 square-foot store that sells women’s clothing, shoes and accessories. It’s so tiny, it feels like a closet. But people drive from as far as 100 miles away to come to this store. The owner sells shoes, from manufacturers all over the world, that you can’t find anywhere else. She has handmade jewelry, and all sorts of accessories for women that no other store carries. Once a woman buys a pair of shoes from this store, she never buys another pair anywhere else. In this teeny store, she is doing sales-per-square-foot that blows away some of the best mall stores."
Creating a relationship
"I met a lady who has a yarn and stitchery shop in Elmhurst, Ill. It is on the second floor of an office building, in the rear, with no window frontage at all," Schallert said. "She has an online newsletter and a direct mail newsletter called ‘Have Ewe Any Wool?’ Her marketing materials really communicate the personality of the store. She lets people know she has very unique, hard-to-find products, and she is available to teach them if they have a question. Customers can call her at the store, at her home, or on her cell phone if they get hung up with a project that isn’t working well. She has all-night knitting at the store. Every Thursday, at 11:00 at night, 60 to 80 people come to her store and talk and knit together all night. They feel like the store is theirs. When that personality transfers, all sorts of things happen that defy what many big chain stores believe is the path to success."
Perception marketing
"People want businesses that can do more than just sell them stuff," Schallert said. "I met a retailer with a furniture store in Mississippi that increased his business by a huge margin by creating a warm perception of his store. The store was over 100 years old, and had been started by his grandfather. We integrated graphics into the store that showed its history and the various transitions. We also communicated a unique customer service problem that had occurred: A young couple bought some furniture for their brand-new house, which somehow got ripped right after they bought it. The owner of the store personally came out and got it, had it sewn up so well you couldn’t even see the rip, and returned it to the couple before they even finished moving in. Personal stories like that touch people and create a very positive association with a store."
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