How Independent Retailers Can Utilize Their Natural Advantages

Recently, Harvard Business Review published a blog post entitled, Megastores Want to Be Like Mom-and-Pop Shops… Sort Of. The article described how businesses like Whole Foods Market, Starbucks and Lululemon are using the marketing concept of “local” to build appeal within communities seeking authentic, regionally differentiated businesses. These companies are excellent at marketing. Whole Foods has a goal to source 20% of its food locally, but its stores display “local” messaging over a much greater percentage of their square footprint. Lululemon employs a grassroots strategy, hiring popular yoga instructors as brand ambassadors to convey their message to the community.

With their multi-million dollar marketing budgets, each of these companies has a serious leg-up on “mom and pop” businesses. If megastores are using local strategies to win customer respect and brand loyalty, in what ways can truly locally-owned businesses compete?

Build rock solid staff to be brand ambassadors

I just watched Simon Sinek’s phenomenal Ted Talk on the how great leaders inspire action through the “golden circle” model of leadership. In it, he describes the underlying quality that makes companies, thought-leaders or entrepreneurs like Apple, Martin Luther King and the Wright brothers so incredibly successful in contrast to their peers. "People don’t buy what you do, they buy why you do it.” says Sinek. The Wright brothers were vastly underfunded and lacked the polished training of their competitors (compare to highly-paid marketers hired by megastores) and yet were able to be the first to flight—in large part due to their incredible passion for what they did and their ability to hire people who, as Sinek would describe it, strongly held that passion as well.

Locally-owned businesses, if they wish to thrive in this incredibly competitive marketplace, need to build rock solid staff teams who “believe what [the business owners] believe”—that is, a belief in the vision and purpose of their organizations—and are inspired to action. More often than not, the “we care about local” customer-facing image that many megastores create is not in line with how they create their local employees. Especially amongst the highly networked Millennial generation, word-of-mouth is one of the most effective marketing tools. The shorter distance between owner and ground-level staff in a locally-owned business creates an advantage. Employees motivated by that passion will go above and beyond for the organization and will be natural brand ambassadors in their communities.

Implement outstanding customer service

Passionate employees will be better evangelists—both outside of work and in it. Especially for B2C businesses, training these inspired employees to be outstanding customer service providers is essential to differentiating themselves from the competition. Zingerman’s, a community of locally-owned businesses in Ann Arbor, MI, was so successful at doing this that they put together a manual on customer service. In their book, The Guide To Giving Great Service, they write, “when a staff member understands the ‘why’ of great service, he or she is a lot more invested in making it happen than they are when ‘service with a smile’ is merely one more mandate from the ‘main office’.” The “non-corporate” nature of many small independent businesses plays the advantage here—business owners have the ability to directly provide their employees with that “why”—and this authentic messaging will filter quickly down through employees’ actions to the customer level.

Maintain a curated product selection

Though brands like Smashburger, Starbucks and Whole Foods will try to use local brand ambassadors and local products to their advantage, they simply can’t compete with local business’ agility. Because independent businesses tend to be smaller and more decentralized, buyers at these businesses are more able to communicate directly and efficiently with C-Level management about bringing on new and interesting products—even if it means ordering directly from a company rather than a large distributor. Whole Foods, with few exceptions, works exclusively with the giant natural food and products distributor UNFI. Starbucks streamlines its offerings to be consistent across the country. Independent businesses have the agility to source interesting and unique products and make quick decisions about bringing on new lines. Because of their non-corporate nature, they can also more quickly allocate any available resources to promote those products. Independent businesses can differentiate themselves by consistently sourcing products (and even services) that can not be found in other companies. It’s an on-going race, and small local businesses will always lead the charge.

Emily Kanter is a strategist with passion and expertise in food systems, locally owned business, and retail (among many things).