The Only Way That Local Retailers Can compete With Tesco…..

Back in October, the UK’s largest independent chain of Green Grocers, Stokes, went into administration.

Media coverage suggests that Stokes was just another High Street casualty in a losing battle with Tesco and the other big chains. Whilst there is little doubt that increased competition from low price driven super markets contributed to administration, this doesn’t tell the full story.

Stokes was in the middle of a major change in the way that they did business. This involved the modernisation of stores, product range diversification and the sourcing of more local produce.

All of these changes were in direct response to a widespread and detailed program of customer surveys that were carried out in their stores.

The figures speak for themselves and it appears that the changes were working.

In the modernised flagship stores, average customer spend, footfall and profits all increased! The fact is that Stokes simply ran out of money before they could modernise.

Smaller independents will never compete on price. Their offerings must be built around specialisation, building loyalty, providing quality products, and constant improvement via survey and experimentation.

Economic factors that are seen as a major limiting factor towards growth could even be harnessed by independents, for example: The rise in the trend of dining at home offers opportunity for specialist food retailers to package together great local ingredients to provide the restaurant crowd with an eat in alternative.

So what on earth can digital marketing offer independent businesses competing with larger competition, especially if these businesses conduct no transactions online?

Social media is the first thing to spring to mind, but businesses need to put much more effort into integrating their digital marketing efforts with their offline offerings.

Electronic email and text survey programs can survey customers to provide meaningful MI in every area of the business from product offering to opening times. For those customers that gave glowing responses to the survey, automatic referral requests can be issued that are much more likely to be acted upon than the usual embarrassed and faded sign saying: “please tell your friends if you liked us.”

Automatic segmentation of customers based on behaviour and choices is also a massively underused digital tool. Many businesses send out newsletters, but many of these are dull, sporadic and most annoyingly totally impersonal and irrelevant.

What if it was different?

For example: a local wine retailer sends out a newsletter to all its customers with a list of new wines it has in stock from both old and new world, red and white.

Alternatively, via a combination of surveying and monitoring of buying behaviour, that shop then sends out automatic, individual, personal communications that matched old world, French red wine offers to  those customers who had always bought and show an interest in similar old world, French, red wines.

Would that show a better return on investment? Amazon would certainly say it does…….

Is the technology available? Yes. Is there a need for it? Yes. Is it just for big businesses? Not any more.

The time is perfect for smaller independents to truly embrace all that digital marketing has to offer in order to take the battle to the larger players.