Fears that supersellers such as Wal-Mart and Amazon.com, with their mammoth buying power and nearly impossible to beat prices, will make smaller marketers obsolete aren’t completely unfounded. Many local mom-and-pop shops suffer when a Wal-Mart, a Home Depot, or a Costco opens its doors. And toy retailers FAO and KB Toys have cited price wars with Wal-Mart as a cause of their recent bankruptcy filings.
But Debra Ellis, president of Barnardsville, NC-based management, marketing, and operational solutions firm Wilson & Ellis Consulting, says that smaller marketers can succeed, David-like, against the corporate Goliaths. Her secrets for success:
* Find a niche. “It may be defined by product, selection, service, or price,” Ellis says. “Anything goes as long as it fills a need and provides something that customers’ love.”
* Along similar lines, “define the rules of engagement,” Ellis says. “If there is a war, battle on your terms, not theirs. If it is a price war, offer selection and service. The same assets that strengthen also weaken. Wal-Mart’s size and market power allows them to define the pricing. It also limits their flexibility and reduces their reaction time.”
* Don’t underestimate the importance of building and maintaining relationships with your customers. “The customer relationship management solutions that provide name, preferences, and buying patterns are great tools with limitations,” Ellis notes. “They will never replace genuine interest in the customer’s needs and wants, appreciation for a customer’s call or visit, and the desire to serve.”
* Look from the outside in. In other words, “think like your customers, vendors, employees, and competition. Search for your weaknesses and then work to eliminate them.”
* And don’t forget that the biggest room in the world is room for improvement. “Constantly seek improvement in merchandising, marketing, and operations,” Ellis says. “Expect many challenges throughout the initiative. Search diligently to find the force to overcome them.”