Getting Squeezed By Big Box Stores - Ways to Overcome

upmatthews,

Excellent post. I took these two lines from the story:

1) Jones, a former construction guy himself, took a deep look at his store and studied Home Depot's public filings to get a stronger understanding of the business.

2) But Jones' ultimate secret weapons are perhaps in the intangibles -- the networks and local relationships he has built over the years. "People will let me know when the geraniums are in early [at Home Depot]," he said. "It's social, and I catch up with people."

Line #1 just let the goose out of the hen house. He studied their biz model through their public filings and learned what they did then adapted. Pure effing genius. Nobody gives this kind of advice to their clients. This is so easy to do with the Internet. A guy could take this and make a hefty how-to study public filings book and make a fortune.

Line #2 screams at you. He has built local relationships. Imagine something as simple as building local relationships. I left out the part about him aiming his marketing theme towards the people who do most of the buying of what he sells - women. That too is a stroke of pure raw genius.

My God, what a fantasitc article. Your job is to find more material like this and send it to me for quality control purposes. If I think the other warriors should have a need to know, I will post it. If not, oh well...

Tom

Excellent article and the owners are rare indeed. They get what is needed to be successful.



I have done many liquidation sales of Ace Hardware stores and most did no additional marketing of their business besides the Ace marketing. Here are a few observations how hardware stores could do a better job.


1. They mentioned women and the stores that have added greeting cards and gift lines especially Christmas and Halloween have done very well with these. Some do well with the high end Grills and Smokers.


2. Power Tools are a waste of space. They need to use that space for more high gross merchandise or promotional stuff that can be turned quickly.


3. It is funny when the sale reaches 70% off, I see the same merchandise in every store. Smart hardware operators would see this and discontinued the items in their store and use the space for other profitable merchandise. Plumbing and electrical and hardware space could be cut 20% or more in many stores.



4. Most stores inventory level is thousands of dollars too high on box Hillman Fasteners .


5. The stores could do lot more business by being aggressive with the Every Door Direct Mail Program and SMS and email marketing.



6. Create special events and contests for their store. Make up your own holidays and have local celebrity judge's is a great way to get attention. It worked for several of the promotional sales I have done.


I could write a lot more, but need to go. Small business owners need to be proactive instead of reactive. Look for new ways to get more customers while being different from their big box competition. It is not easy and takes work, but can make the difference in being successful or going out of business.

Ace Hardware has several stores in my city and they do quite well. They carry unique products and they have staff that seeks you out asking if they can help you with anything. They have services that are helpful like screen repair and glass cutting. Some even rent tools. I like to go there when I can because they're working hard to make a good business that cares about customers. Home Depot on the other hand, I avoid as much as I can. There is absolutely nothing they have that I can't get elsewhere for less and with better service.

Excellent example of thinking outside the box (store).

I think the big takeaway from what he did was 'listening' to what his customers wanted, then providing it with a high level of 'we care about you and your business'.

I know here where I am at, the big box stores have become very unfriendly and unconcerned with what I, as the customer, really want or need. The corporate mentality has turned into 'they will buy it because we have it'.

This has become very true where Wal-Mart is concerned. They buy what they can get a good deal on, throw it out on the racks and assume because they have the 'lowest prices guaranteed' people will fall all over themselves to spend money because they are Wal-Mart.

I used to love shopping at WM, but now I avoid them if at all possible. Many where I live wouldn't shop there if they were the only store on earth. Sam Walton is probably rolling over in his grave at the direction they have taken.

Interesting fact from the business sector is people have gotten to where they will actually spend more money on something if they feel they are getting value, service and support from the business they are dealing with.

Anyway, excellent article and definitely a concept to leverage for local businesses.