COMPETING WITH THE "BOX STORES"

FOR THE OFF PREMISE RETAILER

The off premise retailer in today’s extremely competitive marketplace, can become confused when deciding how to go to market and against whom to compete. Many different types of retailers are after the same consumer as you. It is rough enough competing with your fellow liquor stores, grocery stores and c-stores. But when a box store (club store or mass merchandiser) opens and begins to compete with you, it may cause a major alarm to go off.

Your first thought may be a “knee-jerk” reaction…match the box store’s promoted price. This is NOT the way to go. The majority of package stores do not have either the buying power or the floor space, to go head-to-head with these mega-retailers. This is the time for creative thinking.

It’s hard to believe, but price is not the only element in fighting the competition. Many other factors come into play. The smart retailer weighs all of them before putting a plan into motion.

You must analyze the positives of your establishment vs. the negatives of the box store. Some of these key issues might be:

1) Location

2) Size (as it relates to a “comfortable” shopping experience)

3) Personal attention/assistance to the customer

4) The variety of available brands and packages

5) Your independence as a business owner

Let’s look at each of these points:

1) Exactly where is the box store, with whom you compete? How far does your average customer have to drive to get there? At $2.65 for a gallon of gas, the savings better be substantial. Take a tip from the fast food companies who advertise on roadside billboards, throughout the highway system. They promote, “Easy on / Easy off” access to their stores from the highway. Many consumers are looking for exactly that…something quick and easy. Promote your store in a similar manner. “Why spend expensive drive time going to a store just to save a buck? Come to my local shop and get in and out with no hassles at all”.

2) All of these box stores are huge. To begin with, they have parking lots the size of a major stadium. These stores have some things in common…they are all big, congested and confusing.
It is quite a time consuming hike just to get to the front door.

You start your adventure by hiking from your car to the store. This trip could take a number of minutes, depending on how close to the door you can park.

Once in the door, you have to locate the beer department. Invariably, you are forced to walk past massive displays of everything from toilet paper to snow tires. When you do arrive in the beer department and make your choice, you are forced to wait in a painfully long line, just to pay for your purchase. Let your customers know what is store for them at a box store. Assure them that those things do not happen to your customers.

3) In the box store, the employees are hired mainly to move stock and to keep product available to the shopper. There is usually no one to answer any questions you might have. There is very little personal attention or assistance. You, on the other hand, CAN offer can offer your customers a personal touch. Knowing a name or a favorite item goes a long way in keeping customers happy. And, as we all know, happy customers are loyal, returning customers.

4) The typical box store carries an extremely limited choice of beers. The average is approximately 30 SKU’s (Store Keeping Units…meaning a specific brand and package of a product). Your store probably carries between 100 and 250 beer SKU’s. If a customer wants a product that is not in the box store’s top 10 sales-wise, it will most likely NOT carry it. You, on the other hand, have the ability of carrying a much broader variety of beers, including specialty brands and those hard-to-find items. As an additional benefit to you, these “other” items are not usually “footballed” in ad features, enabling you to make some money on them.

5) Many box stores are clubs. As a club, they charge membership fees. Make sure any of your customers who are venturing to this type of store, are taking this into account, when computing their savings. Add membership fees and the cost of travel to the other aforementioned “issues’” and the decision to shop with you is easily made.

The intelligent retailer takes all the above points into consideration before putting a plan into motion. Don’t look at a box store as an “unbeatable” foe. Remember, price is not your only weapon. Use all the weapons in your arsenal. Take a long look at the positives of shopping at your store. You just might be surprised at what you find.

We invite your comments, questions and/or suggestions. To add yours, simply go to the end of any post and click on the word "comments," in current links to this post. That will take you to a site where you can leave your thoughts.

We offer training seminars to suppliers, distributors and retailers. Contact us for information on specific details, time lines and costs.

Thank you for your support,

Don Apostolos

The Apostolos Pro Beer Post

973.692.9585

dapostolos@optonline,net