Retailers put a lot into running their stores. It takes cash, time, more cash and more time to be successful! In the back of our minds is always the fear that a big-box retailer will move in and ruin everything we’ve worked for.
I’m reminded to the Stockdale Paradox described by Jim Collins in the book “Good to Great”. Jim Stockdale was a prisoner of war in Vietnam for over seven years. He said “You must never confuse faith that you will prevail in the end with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
In short, the real question is how to win against the big box retailer? One way is to embrace that which scares you….technology.
To most businesses, technology is like insurance. You hate it, but you know you need it. When dealing with the threat of big-box retailers, investing in the right technology can give you an edge in competing for customers.
Big box retailers have billion dollar budgets, analysis teams that span the globe, and state of the art technology. Up against that fearsome threesome, the little guy could easily decide to close up shop and walk away for good.
That would be a huge mistake. While small businesses will always struggle to compete with the Wal-Marts of the world, new retail technology is leveling the playing field.
Let’s examine one of the top advantages big businesses are assumed to have over smaller businesses – a bigger and better supply chain.
More Selection, More Products, Right NOW
With large caches of capital, big businesses try to beat the smaller guys in three ways:
- More inventory – This is a brute force approach. The big guys can buy up lots of inventory to ensure plenty of selection. Too much inventory? Just move it to another store or use aggressive pricing scenarios to liquidate.
- Expensive, integrated inventory management systems- The “big guys” have systems that cost millions of dollars that tell them how much of a product is available and where at a given time.
- Better pricing – With more stores and more products, the “big guys” negotiate deeper wholesale pricing which can help keep their prices low.
While big-box retailers have more money and systems, they’re usually slow to act and just don’t work that hard for the business. This is where you beat them.
Beat ’em at Their Own Game
Remember, technology is your friend! With an integrated retail management system like FusionRMS, you can negate many of these perceived advantages. Counter-acting “their” inventory advantage really boils down to four things:
- Speed – with real-time data and comprehensive reporting, you can identify items that are flying off the shelves or hanging around too long and implement strategies to solve either.
- Flexibility – The retail system has to be flexible, from being able to handle complex pricing scenarios to setting up automated replenishment that keeps the supply chain moving.
- Accuracy – This is achieved through integration. Integrating with your accounting system provides accuracy by greatly minimizing human error. No re-keying of data. No fat fingers. No “black box” where you don’t know what’s going on because you’re waiting for data to batch. Get a real picture of how decisions are impacting your business so you can make adjustments.
- Visibility – What’s available at your other stores or in your warehouses? Seeing multiple locations and nodes in the supply chain in one system will enable you to sell items located offsite, ship to store or ship directly to the customer’s house.
Integration + Automation = Get More Done with Less
Running low on an item after lunch that’s a hot trend? A retail management system integrated into your accounting system can identify a replenishment need, create the Purchase Order, email it to the manufacturer/distributor, and update your general ledger, without you having to do anything. You don’t have to hire a bunch of clerks or data entry folks to keep up.
If you’re looking for the edge necessary to fend off big box retailers and keep your stores profitable with plenty of happy customers, give Mike Gill at FusionRMS a call today. 214-420-5144 x 103!