By
Bob Phibbs
Updated May 22, 2024
Levi's made headlines when its stock gained 32% on its first trading day. While Levi's sales and profits grow, they didn't come by accident.
For years, Levi's brand foundered as competitors chipped away at one of America's most iconic brands. Then Levi's crafted and carried out a definitive plan of attack, and they continue to reap the benefits.
But this is not a post about Levi's...
Many specialty retailers have loyal customers because they built their brand in their own way and did many things right initially.
But when the inevitable winds of change blow with increased competition like Amazon, the retailer can be rocked to the core… or begin to sell on Amazon as Gap is now doing ... or even collapse like Payless, Charlotte Russe, etc.
As your business matures, you notice holes in your foundation; things that should have been in place to prepare for long-term growth are missing or unmaintained.
Those gaps in your foundation make you vulnerable to online retailers like Amazon.
How you handle those holes tends to separate into two camps…
You either settle for where you are and begin to slide backward, or you push yourself to keep moving forward even as the path ahead looks less and less confident. This is when you could use a map for navigation.
Because the shocking truth is: Many retailers are their own worst competition. That opens the door for Amazon and the rest of your competitors.
Here is a 5-point road map to compete with Amazon:
1. Set your goal to provide excellent customer service. An exceptional shopper experience is as much the setting as the encounter with your salespeople. When every inch of your store is thought out to how it could surprise and delight. When you add a professional retail sales team carefully schooled in modern retail sales techniques, consumed with making everyone else’s day before they try to make their day, offering an exceptional experience is a standard, not a rarity.
Excellent customer service evolves from a curiosity about the individual human being in your store and why they chose to drive past other competitors to shop with you. Offering options regarding products, asking the customer permission if you have to leave them alone, and providing wisdom when comparing and contrasting similar products are all hallmarks of an exceptional customer experience.
If you're serious about this, you'll use an outside mystery shopping company to verify that your experience is exceptional or run-of-the-mill. Without this destination of an exceptional experience, you're lost.
2. Buy intelligently, price responsibly, and manage inventory closely. Newer retailers tend to go hog wild when buying what they think will sell. After all, buying things without thinking about paying for them is fun. The smart retailer is very familiar with their merchandise turns and margins.
Pricing responsibly is knowing how much you have to mark up an item to clear your costs, grow your profitability, and account for markdowns. You want to treat your open-to-buy like it is your money; you don't want to see it languishing on the sales floor collecting dust.
For example, it may seem like a good idea to have every type of bicycle to meet every need, but fitting it all into a small space usually means rows of bikes that overwhelm customers and lose sales. Same for cosmetics, shoes, and many products where too much inventory makes shopping a chore. Curate your selection to have everything for the customer who will buy - not for your ego.
3. Market focused on what the customer needs and not on your need for their money. So you’ve got a sale? So what? Who doesn’t? Unless you focus your marketing messages on what the customer gets out of shopping with you, you’re like a needy school kid saying, Look at me all the time. How do you help your customers live a better life? What challenges do your products solve for them? How does a product give the user more time, more beauty, or less stress?
Focus on answering those questions in your emails, ads, and status updates, and you’ll find a tribe of supporters loyally supporting your business. Not sure if you are doing it already? Just ask yourself, if I was a customer, would I care about this? If your answer is no, change your marketing message.
4. Train staff with systematic management. Never forget that your job as a retailer is to give your employees the hope to do better, not give in or give up, and not retreat into feeling isolated or sorry for themselves. Having the right processes and religiously training your employees make the difference between a retailer putting out fires all day long and a low-drama yet high-profit shop.
As I've said numerous times, what most people call training is exposure. Training only happens when someone changes their behaviors permanently. You want to train with a checklist so everyone receives the same information and make sure to employ retention techniques.
5. Strategically merchandise your front windows and your store. Visual merchandising cuts down your hundreds of SKUs to a manageable few while making shopping fun. Regarding windows, here's a tip to ensure the focal point is average height. Go outside and look into your front window. Have someone use lipstick or something to mark the outside of the window at the height where your eyes are. That is your sweet spot. Create a tight display in that area. The lights in the window have to aim squarely in the middle where your eyes are focused.
Inside the store, the best and brightest merchandise has to be displayed at the front. Keep clearance items in the back as shopper interest decreases farther into the store.
I had one client sell a $500 ski jacket the day after we re-merchandised his whole store. The jacket hadn’t sold in months prior. Another found a sales increase of 30% simply by creating the right displays throughout the store.
What happens when you constantly work on this road map?
You have less dead inventory.
The merchandise you buy is based on data, not hunches.
You create an exceptional experience for everyone who comes in, not just for your regulars.
You are less dependent on running sales and more on finding what’s new and different to offer your customers who are hungry for your vision of the world.
Your windows and displays become your silent salespeople focusing distracted shoppers’ attention in a split second to consider buying your merchandise.
Your employees look forward to coming to work and not calling in sick.
Your intentions are focused on the future and how to make everything run more smoothly and profitably.
In Sum
To succeed against Amazon, you have to figuratively get up in the blimp and look down on your whole playing field regularly to see the opportunities you’re missing, your competitors who are offering new and innovative products, your employees who need additional opportunities, ... the works.
At the same time, you must always keep your long-range goal in mind to grow sales and enjoy the journey as you progress through retail cycles.
Use these five points to compete with Amazon and the rest by controlling what you can control.
