Winning Against the Big Box Stores

By Andrea Gellert

As someone who has spent the majority of her career as an advocate for small business financing, I am a big fan of shopping local. A recent Civic Economics report determined the economic impact of shopping local: 54 percent of the revenue from local retailers goes back into the community, as opposed to 14 percent from national retailers. And eating at local restaurants does the same thing: 79 percent of local restaurant revenue stays local, compared to only 30 percent from the national restaurant chains.

That said, I know that for a small business it can be very tough to compete with larger companies, who have economies of scale that small businesses just don't have. But small businesses have powerful ways to differentiate themselves, and here are five suggestions I think can help you beat the big box stores, or national chains, in converting even more customers to the idea of shopping local:

1. Don't forget that business is personal

It doesn't really take much. In fact, sometimes it's as simple as remembering a name or a favorite dish. It really doesn't matter is if it's a local restaurant or the dry cleaner, every customer likes to know that their business is appreciated. The best way to do that is to remember who your customers are and greet them by name when you see them. When was the last time someone in one of your favorite stores called you by name?

2. Remember, just being good at what you do isn't good enough

Many of the national chains are really good at what they do. Starbucks, Amazon and Apple are great examples of major brands that do what they do incredibly well. What's more, they can do it for a lot less than you can. Don't be afraid to redefine what it means to be good. Maybe it's a willingness to work with special orders or offer free delivery. One company, B-Line Sustainable Delivery, uses electric-assisted tricycles to deliver products around Portland, Oregon. They're providing an ecologically sustainable delivery service that sets them apart from larger trucking companies, while differentiating themselves in a crowded marketplace. They also offer advertising on the side of the delivery boxes on the back of the trikes.

3. Level the playing field online

If you don't already have an online presence, you should. Many of your customers are likely searching online for your product or service now, so at a minimum it's really important they can find you with a listing like Google Places, etc. You should also be thinking about where your customers are already looking and participating online. Even if your business doesn't sell online, don't assume you don't need to be there. A plumber, for example, might not have anything to "sell" online but could offer scheduling services there to make it easier for customers.

4. Get social

Facebook, Twitter and other social media platforms let you target your local market to interact with current customers -- and even those who might not be your customers yet. Images and videos of your business, and maybe even your employees having fun, is a great way to show off what makes your business unique.

5. Get out and network

If you expect the local community to support your business, you've got to get involved. The Chamber of Commerce is a great place. Networking gives you a chance to get to know the other businesses nearby and enables you to start thinking in terms of how you can support each other. Complementary businesses that share the same customers can create great opportunities to offer things like special packages to provide a lot of extra value. Wedding photographers, florists, and local hotels are great examples of complementary businesses that could work together. Don't be afraid to think outside the box to discover what will work in your area. A great example is a group of stores in Rhinebeck, a town in Dutchess County, New York, that collectively create shopping promotions during pre-peak season times to generate business.

Competing against the big box stores might be a challenge, but there are lots of ways to win. These five suggestions are a great place to start. What are you doing to beat the big box stores?

Image (cropped): Flickr/bisgovuk

Andrea Gellert is Senior Vice President of Marketing at OnDeck, where she brings more than 15 years of small business marketing and client service experience. Most recently, she was VP of Client Services/Operations at Group Commerce. Andrea also spent 15 years at American Express, holding key leadership positions in both the OPEN small business and Merchant Services divisions. Andrea graduated magna cum laude from Harvard and received an MBA from the Kellogg Graduate School of Management at Northwestern.