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Time for a Reality Check

Your customers' shopping in other stores

The newspaper photo showed the store owner standing in front of his store. The photo caption mentioned the distinctive neon lettering. In the last fifteen years, this news article was the largest about an independent hardware dealer that we had seen in our local newspaper. When one of the big box stores moved their store to a new location a couple of years ago, their regional president was the subject of a cover photo and four page article in the business section.

If there is a tropical storm heading our way, you can expect to see a photo in the newspaper. It will show folks in line at the big box store waiting to make their purchase. There is also the occasional article that calls for a quote from someone in our industry. You can anticipate where the reporter goes to get the interview.

The question today deals with the perception that the public has of the big box store, and of the independent hardware dealer in the market. In the article about the local store, the owner was announcing the closing of the store. He remarked about the customers that told him that they check his store when they find the big box does not have the item desired. He also made a comment about the smaller hardware store being relegated to providing the inexpensive accessory sale.

The description of "friendly and knowledgeable help", "they have the unusual items", or "it is a neat store to visit" may be compliments, but they do not make major contributions to the bottom line.

In a discussion one day, a dealer told us of a customer that had gone to the big box store to purchase a faucet and copper fittings, but went to the hardware store for directions of how to solve a problem, and a lesson in the art of soldering pipe fittings.

Many times we can find the article, or industry expert, that says the smart retailer will take excellent care of this customer and expect that he will return. Do you really think so? When the customer decides to paint his house, do you expect that the customer will remember the previous experience and will come running to purchase all of his paint and sundries from your store? The independent store can't sit back and rest on his reputation. Not even after having provided the customer with the knowledge of how to solder pipe fittings, can you expect that you now have a loyal customer. For you can never shame a person into shopping in your store.

Ask 100 businesses about their position in the market, and 97 out of the 100 will tell you that they are the number one or two business. This is the major problem with businesses as few, if any, are willing to acknowledge that they are not the leading business within their market. This report is according to "Marketing Warfare" a book written in 1986 by Al Ries and Jack Trout, two gentlemen that own an advertising agency in New York.

The authors explain that there are one of four directions you can take in an effort to increase your market share. This book is an excellent resource book for any hardware retailer for there are stores that fit into each of these categories.

The first "warfare strategy" is for the business that truly is the leader. Not someone that is "holding their own", but the retailer that is truly the number one store in the mind of the customers.

The thrust of the number one position is to work to make your current position outdated so that your competition is always one or more steps behind you. Your competition is trying to copy the business techniques that you are preparing to abandon.

The second strategy is for the business that is the second or third position retailer. In this scenario the suggested direction for a retailer is to determine the strengths of the number one business and then make number one's strengths work against him.

If you are not one of the top three businesses then there are the third and fourth strategies that you can utilize. The example given in the book for the third strategy, "flanker strategy", was that of the soft drink, 7 Up. If you let the traditional colas (big boxes) hammer away at each other, then you can take a flanking approach. Remember the upside down glasses and the "never had it, never will" approach of 7 Up?

Perhaps in your store, you could use a "voice mail - never had it, never will", or a "friendly greeting at the door, and throughout the store" approach.

The fourth warfare strategy is entitled "guerilla warfare". With this market position, you have to first remember that you are not the number one store, nor should ever try to act like the number one store. But you should concentrate on a unique niche of the market.

Utilizing the soldering example, perhaps your store could specialize in having Thursday night pizza parties. Invite your customers to come in for an evening where they are provided with hands on training on how to perform various repairs about their home. Have them bring the entire family and have movies for the kids. The important thing is that you find something unique about your business and promote that position. The side note is that as soon as the position loses its uniqueness, you have to have a new idea ready.

This brief article is by no means meant to be a review of "Marketing Warfare". Instead, the purpose is to suggest that you read this, and other management books, to find a strong position in the market for your store. The big box store is not going away, and hopefully neither are you.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179