How Independent Natural Retailers Can Grow Sales in a Hyper-Competitive Market

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How can small retailers remain competitive and grow in a hyper-competitive market? This is a question I get asked a lot. This is a question that needs to also include the brands these retailers sell. Most small brands owe their very existence and their start to the small retailer that took a chance on them when they were starting out.

I’d like to share a story about a local retailer who took on a big box store and is still thriving today. In fact, the large big box store eventually went out of business while the small store continues to thrive. The parallels between small natural and mainstream retailers are identical.

Several years ago, one of the first national big-box home-improvement retailers moved into my neighborhood and instantly began to challenge the smaller retailers in the area. Out of fear, several of the local building suppliers, lumber yards, specialty, and hardware stores tried to compete on price alone and lost. Some smaller stores chose to discontinue items that were available at the large box store. Consumers eventually stopped shopping at the smaller stores due to their limited selection of key items. They too succumbed and went out of business.

One local hardware store took a different path and survived and they are still thriving today. The key to their success was maintaining distribution of key items in addition to a wide variety of specialty items. They priced them fairly to remain competitive. They resisted the urge to engage in a pricing war they had no chance of winning. They focused instead on their strengths; great selection of the hard-to-find items and outstanding customer service. In fact, most of the big-box shoppers eventually went out of their way to shop the little store where they learned how to install or repair everything from toilets to roofing and beyond. They were happy to pay a little more for products that came with valuable help, instruction, and encouragement.

The local hardware store changed its promotional strategy to focus on its strengths:

• Outstanding customer service
• Years in business serving their local community
• Reputation for quality and help
• Unsurpassed product knowledge of their sales staff
• Connection with local tradesmen
• Ability to customize orders
• The trust they had earned

The store never tried to match their prices to compete. Sales grew and continue to grow because of the focus on their loyal shoppers.

This is the model small natural retailers should adopt to remain competitive against mainstream retailers. This will help you compete and grow sales in any economy and across all channels.

Natural product brand sales will continue to grow at mainstream retailers. This will benefit us all as it makes our healthy way of life more accessible and affordable. The advantage natural has over its mainstream competitors is in our ability to remain close to our loyal customers.
The goal for small retailers should be to encourage customers to fill most, if not all, their shopping needs while in your stores. This is how you grow sustainable sales and remain relevant in your community.

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Daniel Lohman, CPSA
Daniel Lohman, CPSA is the Organic and CPG Industry Strategic Advisor, certified at the highest level of category management proficiency: Certified Professional Strategic Advisor. Daniel is a trusted and respected member of the natural community who assists companies giving them a sustainable competitive advantage helping them compete head-to-head with the most sophisticated big brands. His company, Category Management Solutions (CMS4CPG), provides innovative ideas, actionable insights and strategic solutions for companies interested in gaining a significant competitive advantage. His unique approach and expertise is designed for the small to medium size brands wanting to grow their business, build shopper base and expand brand shelf space. It includes strategies of the top national brands without all the added expense, saving you valuable time and money. His mission is to level the playing field between natural and conventional (mainstream) by helping natural organic companies make the most of their available resources, win at shelf and connect with consumers. Save valuable time and money while avoiding making costly mistakes, providing solutions that help you get and stay ahead of the competition. Email Dan at dan@cms4cpg.com.

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