Business Killer 4: Non-traditional Competitors Cont’d
Posted by Ryan Volberg at October 3, 2007 2:15 PM

Online Retailers – How to Compete Cont’d

This week, let's continue our look at our friend, Bob the Jeweler and how he can tackle competition from online store equivalents. Here are a few more strategies that Bob has incorporated into his business plan.

Craft the Experience

To increase the chances that his customers become shoppers, Bob creates a repeatable experience for his customers.

The experience begins when the customer first enters his store and continues on well after the sale.

He improves his display to create more "shops". These shops are based on both brand and on functionality of the watch. For example specialty sports watches are in one area while an upscale brand is highlighted in another case.

He teaches his staff to qualify quickly and to move through the education process when selling any item, not just watches.

He works with his staff to "be bigger than the sale" and work hard to find "the perfect watch" for every customer.

Once the customer has decided to purchase, Bob offers several payment options, including an "instant credit" system that allows him to compete with larger chains.

Upon completion of the sale, the salesperson takes the customer through every feature of the watch, regardless of the price of the watch. They also review the warranty, and instruct the customer what to do if they have any problems.

The salesperson also extends a yearly battery replacement program. They explain that the easiest date to replace your battery is one you'll always remember, on your birthday. So they get the birthday of the customer and schedule a reminder to be sent in the month before. Of course, in addition to the battery offer, there is a customized offer based on their last purchase.

Bob also invites several of his customers that collect watches to preview new timepieces before they're put on display. Inevitably, he sells several watches during these sessions.

Even if you can’t beat 'em, join 'em

By adding value in terms of convenience, trust, selection and service, Bob loses less and less business to his online-only counterparts. Ironically, Bob develops his own online presence. While many of his customers come from other parts of the country, the vast majority are within a few hours' drive.

His website offers the convenience of easy in-store service and fast shipping options. He leverages the reputation he's built with his traditional store to create trust on his online one.

Conclusion

Online retailers can pose a real threat to some traditional retailers. To compete effectively, traditional retailers must face these threats head on and develop strategies to work around them. Burying your head in the sand and pretending they don't exist or just complaining about the unfair overhead advantages that web-only store have will not make your cash register (or Halo POS) ring.

Think hard about how the internet has changed your business and find ways that you can set yourself apart just like Bob did.

Next week: Coping with Other Non-Traditional Sources of Your Product

Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring retail and restaurant success.

Category: Survival Tips

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