How does a “mom and pop” store compete with Walmart?

Don’t blame Walmart, here’s a different take on the whole “Walmart is forcing me to close my store”.    Here’s a solution.

How does a “mom and pop” store compete with Walmart?

By  Amelia Rojas

I have often asked myself this question, how does a “mom and pop” retail store compete with the large retailers of the nation such as Walmart? It is a known fact that Walmart is the most influential and powerful retailer in the world, they “call the shots” not the manufacturer which enables them to “name their price” and sell for a low profit margin. It is important to remember that Walmart had very humble beginnings and did not begin this way. At first they had the same challenges and had to come up with a strategy in order to be competitive and to attract customers. Walmart’s motto “buy cheap and sell low” has taken them to this level along with the help of Trade agreements with China. Conversely a small business does not have this power or influence, and therefore cannot compete with Walmart on this level, it is nearly impossible; they do not stand a chance. Simply put, Walmart is only a threat to those who are trying to compete with them on a “price level” but not because of quality or service. Therefore, if “mom and pop” businesses focused on the customers’ needs and the quality of the product and service, they would not be forced to close down because a Walmart opened near them.

 After all, Walmart’s shoppers are not seeking product quality or exceptional customer service. These customers only expect the lowest prices, plain and simple. But there are customers who value quality and service over price. Where shall these customers go? There could be an alternate answer to Walmart. And the answer could be found at any store which offers quality and service. What does Walmart do? They do what they do best and that is to offer the cheapest prices, and offer everything from groceries to automotive and everything in between, hard to compete with that. I, for one, have never stepped into a Walmart because of the quality of the product or the service, that’s like having dinner at McDonald’s and expecting to see filet Minong and red wine on the menu. However, I have noticed in recent years that one thing most small businesses lack is precisely what Walmart does not offer, “quality and service”. It is safe to say that the consumer is not willing to spend their hard earned dollars where there’s a lack of these essential factors, for that they shop at Walmart. 

No disrespect to Wal-Mart -   I happen to shop there from time to time and for the most part the cashiers are always very friendly and down to earth.

If the small mom & pop store wants my business, they better offer service and treat me “the customer”  with respect, plain and simple.

I seriously have stepped into many new stores and from that “first impression” I can almost always guarantee they will soon close and they usually do.

I don’t have superpower, just an average American who loves to shop, but will ONLY spend money where there is value or at least a perceived value.

I’m not always looking for a “sale” or “discounts” although it’s nice.  I am first and foremost interested in the “service” yes,  Service people!

 And I don’t mean the obligatory “hi, how are you” with a frown, or the very scripted “I’m sorry to hear that mamm” –

Please train your employees to be respectful and offer genuine service.

Do not judge the customer, it’s time to stop! Unless you don’t want to remain in business, it’s that simple.

Walmat is smart, they welcome everyone into their stores.

It is a known fact that American consumers are willing to pay more if they perceive the value in the product or service, that’s what it “boils” down to. Small businesses must offer value, go above and beyond by offering exceptional service and respects their customers. After all, smaller businesses do not have the capital needed to spend on marketing and advertising and rely almost entirely on “word of mouth”.  If the experience is negative or the product does not meet their expectations that is the word that will get out. I would prefer to give my business to the local “mom and pop” retailer simply because of the perceived value and evident service. Customers could face problems or might be in need of service for a product like a Computer. If they do not get any service while they are facing technical problems with the computers; what good will it be for them to buy the product. However, if an alternate business provides the customer support service for such customers just at the dial of a phone; the customers will be more than glad to do business with them in the future. Since business is a continuous process and the customers need a hassle free service, it is wiser and beneficial to provide good service and quality product which will decrease the recurring expenditure of the customer, and the customers will further enjoy the product they have purchased. In short, these customers will keep on visiting the ‘mom and pop’ in the future for receiving better service and quality product. Now multiply that times thousands of consumers and this equals a very profitable business, this is “key”. Otherwise, these businesses will see a decline in their profit, blame Walmart for their financial loses and ultimately close their doors.

As a small business owner you may be saying to yourself, this is just a theory or a biased opinion written  by a consumer who has no facts or a gripe against Walmart.  Which by the way I don’t, I happen to think that Walmart is to be admired for their success and accomplishments.  That said, In an article written by Alex Goldschmidt “Wal-Mart’s Poor Customer Service Has To Go” he investigated and found that “Walmart scored the lowest of any retailer on the American Customer Satisfaction Index” earning them the title of “Worst Customer Service in America” (Goldschmidt, 2008).  Additionally in a video interview given on CNBC, Claes Fornell of University of Michigan explained that “having lost the battles on merchandise quality and customer satisfaction, Walmart is left competing on price alone” (Fornell, 2009).  For this reason “mom and pop” retailers can learn from Walmart, but most importantly take advantage of their weaknesses and benefit from it.

This problem would not exist if small business owners realized this basic and simple principle. Perhaps it’s time for the “mom and pop” business to take a new approach and not focus on Walmart’s prices, rather by doing precisely that which they do not offer. Consequently a “mom and pop” must go above and beyond, must offer quality, must offer competitive prices, but above all it must offer exceptional customer service. Just as Walmart did 60 years ago, by doing the opposite of their competitors, by buying cheap and selling low. For instance, Nordstrom’s is not known for “cheap” on the contrary customers gladly pay the higher prices because of their high standards which they abide by and is precisely one of the reasons for the success. After all if the customer perceives value in the product or service they will pay the higher price. “Bottom line” how does a “mom and pop” business compete with Walmart? The answer is they don’t, if they do they lose. Ultimately if you can’t “beat them” do something distinctive.

References

Goldschmidt, A. (2008, January 10). Wal-mart’s poor customer service has got to go.  Retrieved 

   from http://www.seekingalpha.com

Fornell, C. (2009, August 18). Customer satisfaction index. Retrieved from 

   http://www.cnbc.com

Thanks for reading!

Amelia

Retirementandtravel.com

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Posted July 1, 2011 by Retirement and Travel in Uncategorized

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