Many U.S. cities are seeing small retail stores head for bankruptcy. Now, a handful of major national chain stores are moving aggressively to wrest customers from old-fashioned “mom-and-pop” establishments (many of which have been in operation for more than a hundred years) in favor of major retailers. How do the big stores do it? In addition to simple price-cutting, improved customer service, and other standard business tactics, some of the big-box sellers are turning to modern marketing techniques to drive out the smaller shops because they are unable to keep up. Here are the three main tactics they use to defeat the competition.
The “oldest trick in the book” for large retailers is to offer deep discounts on multiple items to get customers in the door. After that, it’s simple enough to win them over with all kinds of specials, hard-to-find items, coupons, and other services. For decades, chain stores in the U.S. have been building their clientele this way. In fact, Sears was one of the first to use its pricing advantage to usurp local sellers around the nation. Now a victim of unrelated business ills, Sears recently filed for bankruptcy and has been closing on a large scale nationwide. But other retail giants still dominate local markets all over the U.S (for example: Walmart).
Massive Advertising Campaigns
Huge corporations have the cash to conduct comprehensive ad campaigns. This tactic has to do with sheer monetary muscle. Mom-and-pop stores rarely have more than minuscule ad budgets and just can’t compete with the big players of the marketing game. Outgunned and outspent on all levels, the small retailers in hundreds of U.S. cities quietly go out of business and disappear. Take a walk through the streets of any small city these days and you’ll notice that most of the shops cater to tourists or focus on one or two products that aren’t offered in big-box stores. It’s the only way small sellers can compete these days with the likes of Walmart, Costco, and online giant Amazon.
Integrated Services and Long Hours
Walmart and its brethren in the big-box universe have the monetary muscle to open entirely new, unrelated lines of business if need be. Sometimes the big boys contract out this function. On other occasions, they go into business for themselves, offering things like insurance, hair styling services, fast-food, coffee, catering, and more.
Nearly all the large chain stores now have at least one unrelated service provider on the premises. Sometimes that’s a burger joint, a barber shop, or an eyeglass store. The marketing plan seems to be turning big-box stores into mini-malls, complete with their own places to eat, get your nails done, and have your car fixed.
When additional services aren’t enough to dominate the local retail landscape, the chain stores routinely stay open much later than local stores and open earlier too. Costco went one better; the company opened service stations at most of its locations and then extended times of operation to boot. Costco gas hours run well beyond service stations in some small and medium-sized towns where the stores do business.