The natural products industry is full of small business owners for whom the threat of big chain stores constantly looms on the horizon. While studies demonstrate people tend to purchase a greater percentage of their groceries and other merchandise from these larger stores, many smaller businesses do succeed. Recently, the Natural Products Association Southwest newsletter had good advice on how to compete with the big box stores, which is important for any small retailer:

*Don’t be scared: If a big company is coming into your community, use the threat as a reason to make some positive changes to your business. An easy (and inexpensive) modification is to improve your customer service, making sure you give your customers personal attention (see September 2008 WholeFoods Tip of the Month). You may want to think about being open to a little price negotiation, which smaller retailers do more than chain stores. Some customers prefer to shop where they feel more in control; remember, it all depends on their perception.

*Don’t shy away from the competition: Go and explore the store for yourself. Compare their products, experience their customer service, and talk to their customers. Find out what the customers like and dislike, and think about how that compares to your store. You could take it to the next level by hiring an industry consultant to conduct a formal study of your customers’ values.

*Intrigue your customers: While the chain stores tend to have some of everything, your store could benefit from being the in-depth supplier of a smaller niche. By being more focused, your store can be the place to go for the products you sell. Smaller stores tend to have bigger personalities, and your store should be no exception. Emphasize your inventory’s originality and create a warm and welcoming atmosphere.

Published in WholeFoods Magazine, November 2008