There are some that would say “absolutely not”.  The reasoning behind this is based on price alone.  Big chain stores have more buying power than smaller stores.   The more product a store buys from a supplier, the lower they are able to negotiate their prices on those products .  Assuming that both types of stores are working on the same profit margin, the store that was able to negotiate the best price is also able to sell at a lower price.  If you believe that stores compete on price alone, then this would be true.

There is so much more than just price though.  Customer service plays a huge roll in any business.  I don’t think there is anyone that hasn’t had the experience of going to a large chain store to purchase something, had a question or problem and could not find anyone to talk to.  Or worse yet, couldn’t find anyone that knew what they were talking about.

This is where the independent stores have the opportunity to excel.  Customers want to feel that they are important to you and that they matter.  You need to be able to demonstrate your knowledge of the products you carry (and maybe some you don’t) and your willingness to share that knowledge with them.  Because you have a smaller customer base, you have the ability to develop relationships with your customers which is what will keep them coming back.  Your customers need to be able to trust you.  If you do not have what they need, offer to get it for them if you can or refer them to someone else, preferably another small independent store.  Be sure that your customers know that you are there for them no matter how large or small their purchase is.  A small purchase today could mean a larger purchase tomorrow.

So, my answer to the question “Can small independent stores compete with large chain stores?” is absolutely.  What’s your answer?

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• Capitalism and the Games We Play

Tags: relationship, strategies