Small retailers are often nimble, agile and creative because they need to compete against established businesses with bigger budgets. Here are five of the best ideas big businesses can borrow from small retailers.
We recently shared a post about the 5 Lessons a Small Retail Business Could Learn from National Chains. And while it was chocked-full of sound business strategies small retailers could learn from the “big guys” – national retailers are continuously fighting off those new up and comers.
As a large retailer, you have both scale and logistical complexities that make competition fierce, but there are best practices that can streamline operations, especially if your team is able to implement winning tactics that make small retailers so agile.
So let’s flip the script and look into what big retail can learn from their smaller, local competitors.
1. Small Retailers Build an Innovative Culture on Trust
Many small retailers place emphasis on creating fun and inviting company cultures – focused on the team, the customer, and keeping processes and procedures simple, flexible, and intuitive. Whether it’s allowing employees to customize their workspaces, engaging in team-building events, or allowing front-line retail staff to be a part of creative or strategic brainstorms, innovative cultures are a hallmark of the small business world. Big retailers can remove the drudgery of going to work or picking up “a shift” by making a concerted effort to develop creative, dynamic, and supportive environments that focus more on an employee’s role within the company than adhering to restrictive operating procedures.
For example, the e-commerce shoe retailer Zappos leveraged an innovative culture to build its brand and win the loyalty of customers, by creating an empowering environment for employees. Zappos also changed its organizational hierarchy opting for a flat managerial structure, giving employees more autonomy and equipping them to serve customers in the most efficient way. The emphasis on customer service, by focusing on people, process, and culture catapulted Zappos into big business.
2. Hire for Hybrid Jobs to Lower Headcount
As anyone who has built a business knows, when you’re tapped for resources you’re forced to get creative. And so smaller retailers are often limited to do more, with less. As a result, employees may be asked to perform multiple duties. For example, the stock staff may also be front line customer service as well as helping the buyers understand how goods are received by customers.
By finding and retaining the right staff based who’s work is aligned with their passions and core skills, big retailers can create hybrid jobs and consolidate tasks from different functional departments. This can result in a myriad of efficiencies while also laying the groundwork for a swarm culture (that is, roles that are cross-functional and focused on attacking a given challenge as opposed to simply saying, “that’s not my job”).
Additionally, the cross-training of employees in large retail companies can lead to better communication and efficiencies while also lowering headcount. In a global economy, the cost of labor and supply chain management are two big determinants of success. The better that big retailers can allocate tasks and retain employees, the better for all stakeholders, and the customer experience.
3. Curated Collections and Limited Quantity Products
The most successful small retailers not only have an intimate knowledge of their products but also leverage limited quantities and curated collections to their advantage. While truthfully, many small retailers employ limited quantities because they are hedging against the risk of overstocking and leveraging curated collections because they tend to buy from a place of “if I like it, others will too”; it still creates a sense of discovery for shoppers each time they walk through the doors.
Draw what you will from retailers who often employ this strategy:
- Eat-local restaurants that create limited menus based on season and what they could source that day.
- Fashion retailers who run invite-only trunk shows for season previews.
- Online retailers who run “deal of the day” or limited quantity product-feature sales.
- Specialty retailers like wineries, cannabis shops, or adult sex toy and lingerie stores where the staff are expected to help direct buyers through knowledge and experience – often with “staff picks”.
So consider, limited runs based on region, location, or season. Allow your teams to fall in love with the product lines and curate goods and collections based on their tastes and customer reactions – it will not only make your retail environments more browsable, but it will also create a sense of individualism that small retailers do so well.
4. It’s All About the Story
Taking a note from the point above, small retailers and their passionate and knowledgeable staff are often more intimately tied to their goods compared to large retailers. Their staff have an understanding that goes well above casual users. There’s a reason they sell the products they sell, why they’re displayed with such prominence, what other customers think; and for small retailers, they have an amazing story to share.
For large companies, it’s not about an employee discount or hoping that your staff will like your product lines, it’s about looking for those opportunities to bring meaning and context to what you sell and why you sell it, and what people like and why they like it.
Hiring staff that are passionate about what you sell certainly helps, but allowing your staff to understand the story behind the season’s lines, your buyers’ motivations, the context around the decisions that were made – can certainly help front line retail staff come to understand the intentions behind the goods.
And as we know, there’s nothing that replaces getting products into your hands, using them, and loving them. So encourage your staff to use the products and focus on those they love most, sharing their personal stories and point of view to help customers arrive at the same conclusions – that is, that they love it.
5. Always Be Moving…and Fast.
If there’s one thing small business does well (it always has and always will) is its ability to ideate, move, and respond to customers and market conditions. And while the systems, processes, and procedures that keep a large national retailer moving – logistical challenges that quite frankly small retailers do not have to face – are the foundation of what keeps the “machine” running, it also holds large retailers back.
When you consider that many large retailers are unable to respond to “new”, have a short-term focus on shareholder returns, and create working cultures where they’re risk-averse because “failing” could cost you your job or reputation – they’ve become very slow, conservative places. Often going against the very spirit that allowed them to become a national force in the first place.
So what can large retailers do to move quicker? Well, it’s actually pretty simple?
- Enable an “always-on” pilot program to fast-track ideation and innovation
- Develop a culture that focuses on progress over perfection
- Don’t be afraid for concepts to fail by rewarding effort and not simply the outcome
- Understand that amazing ideas can come from anywhere within the company
- Embrace the “uncomfortable pace” that comes from moving quickly
Big and Small Retailers turn to CBSF
From local entrepreneurs to national chains, we help retailers strategize and design retail spaces for the ultimate customer experience. Our exceptionally talented retail space design, retail fixtures design, engineering, and construction management specialists can help you develop a retail space that will enhance your brand and build a loyal customer base by focusing on retail design fundamentals. For more information, call CBSF at (800) 535-2279, to discuss the details of your vision for your new store.