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Survival of the Fittest

Every day the grip that the supermarkets and major chains have around the commercial world seems to get a little tighter. The sight of small, independent retailers being forced to shut down because another major supermarket has just opened a new store in the area is one that many people have become accustomed to. This push is felt right across the commercial world, and it is now relatively rare to find a high street with local independent shops on it rather than the mighty giants such as WHSmith, John Lewis, Debenhams or Boots.
This homogenisation of the high street is a real tragedy, and one that affects the entire spectrum of independent retailers, be they food shops, chemists, stationers or independent gift shops. The advantage that the major chains have is that they are able to offer products at greatly reduced prices, sometimes dropping the retail price by as much as fifty percent. In this sort of market, it is hard for smaller shops to compete. However, where the major chains might be able to win on price, the independent retailers have the advantage in terms of the quality of service that they are able to offer.
As an independent retailer, you should not despair simply because Tesco has opened another Metro store just yards down the high street from your gift shop. Instead, take pride in the fact that you can offer services and products that the major chains cannot.

Holding their own
Having run a gift shop for 25 years, John and Susie Butcher are used to seeing stores come and go. They run Bazaar, an independent shop selling handmade, non mass-produced products, in Sudbury, a market town in Suffolk with a population of about 25,000. Although there is competition from chain retailers, the longevity of John and Susie’s success is indicative of the fact that they can easily hold their own with the competition.
“Sudbury has an out-of-town Tesco, Homebase, Halfords etc. and a number of ‘clone town’ small multiples like Past Times, Bon Marche and Millets,” says Susie. “It has one local family department store, Winch and Blatch, but most shops are small, one man/woman bands. We had one of our best years last year and I would say that the big stores have little effect on us. Although we are a bit out of the town centre, we have been here for 25 years, and once customers make the effort to visit to the shop they always buy something and always come back!”
The Butchers are experienced at sourcing unique products, and are well aware that in buying from smaller manufacturers, they actually have an advantage over the major chains.
“We a make several very enjoyable shopping trips a year to the Far East to source new stock,” says John. “Our latest finds are hand-loomed silk scarves from Laos, and hand embroidered torrans from the Gujarat in India. We compete by selling handmade, non mass-produced gifts which we get from small companies who could not supply in the quantities that the big boys want.”
Another tip that John and Susie have learned from running Bazaar is that a variety of eclectic stock, something they might not find in a supermarket, will always be attractive to the customer. “We also stock clothes in the summer so that our turnover holds up all the year round. Quality costume jewellery is still selling well and we always do well with our hallmarked silver.”

Size isn't everything
Equally, a small store can have the effect of feeling more intimate and exclusive than one of the bigger, soulless department stores or supermarkets. Making your customer feel that they are getting something exclusive is a good technique for keeping them loyal. Presentation and stock control have a huge role to play in this. A supermarket will always struggle with the fact that they are by nature of the pile ‘em high mentality. Of course, this might mean that they are able to offer discounts on products, but it can leave the customer feeling that he is little more than a robot on a conveyor belt. “We make sure that we have eye-catching windows and won the town’s Xmas window competition, something that Tesco could never do of course.”
Offering a highly personalised service is something that the most successful and inspirational independent gift retailers refer back to again and again when evaluating the pressure placed upon them by the major chains.
Cotswold Trading in Gloucestershire is a company that is a leader in terms of keeping abreast of their competition. They provide a very personal service and are well known for the high quality, original and eclectic gift ranges they stock at their three stores in Broadway. “We do feel the pressure of the major chains, particularly at Christmas,” says Kath Mahon at Cotswold Trading. “But our customers come to Cotswold Trading because they know that they are going to get a very different shopping experience from the one they might get at the more one dimensional high street store. This makes a very big difference. For example, without question, our staff are genuinely friendly and polite and take real pride in their jobs. We offer a very personal service, know customers by name, and feel it is important that the staff often know what types of products our specific customers like. In addition we go out of our way to make our customers feel as if we are doing everything we can to make their shopping experience as pleasant and easy as possible. We can offer to place special orders for items that we do not have in stock and we can gift wrap items. We regularly run events evenings, Christmas shopping promotions and special displays for our customers.”

Special offers
As well as providing the sort of service that the major chains could not hope to compete with, such as knowing customers by name, a trick to keep ahead of the rest of the high street is to play them at their own game. “Although it is hard to compete with the three for two or 25% off offers that the big stores run, we do frequently run in-store promotions, such as spend £50 on Bridgewater and get a free mug. We are also considering launching a customer loyalty scheme.”
Sourcing also remains an area in which the independents can compete with the major chains. Both Cotswold Trading and Bazaar are aware of the advantages of finding stockists who do not deal with the bigger high street stores. “We are continually working hard to find fresh new products for customers in order to remain ahead of high street competitors,” agrees Kath Mahon. “This can sometimes be done by sourcing from smaller companies who would not be able to deal with volume of high street demands. In addition, certain trade fairs attract smaller suppliers, such as Top Drawer and Pulse, two quality shows that represent smaller companies offering stylish design and products you would not find in John Lewis or Debenhams. The types of products you might find at Pulse and Top Drawer can help to give your store that feeling of exclusivity. We also have had to look further afield for our products in the past three years, such as Maison et Objet in Paris. Finally, we try not to use suppliers who have discounting structures that favour bigger business. We are not keen if a supplier stocks Internet sites offering 10 to 15% cheaper than in-store.”
In a sense, it is the job of the quality independent retailer to try to provide an almost entirely different service to the major chains. It is clear that financially the chains will always have the advantage in being able to offer big discounts and special offers, something that is very hard for a small independent retailer. “There’s no point in competing directly with the big chains - you’ve got to offer something different,” agrees Samantha Swallow of Maddie Browns, a quality independent with stores in Wells and Tetbury. “Presentation is key and we try to give a context to the products that we sell rather than just stacking high and selling cheap. We wrap up purchases in tissue and put a tag on our bags and these are often given as gifts just like that. We can advise on what would be a suitable gift for a certain sort of person or occasion.
"Our customers realise that the local high street has just as much in a more convenient and pleasant environment. Knowing the sort of things that a regular customer likes can be a very powerful tool that would never be present in a large store. We are also able to apply our buying knowledge so that we can answer the questions directly when they come - for example, 'Can you get one of those in this sort of colour or in that size.' We are both buyers and sellers and therefore we don’t need complex analysis tools and surveys to answer simple questions. We know what sells and what we have been asked for. This makes us much more reactive than any large store. ”

Competing with the big boys
Ultimately, it is clear that, despite an increasingly competitive market, the independent quality gift store is very much alive and well, and quite up to the task of taking on the competition from the major high street chains. It is clear that in today’s market the independent store must work much harder than in the past to keep their customers loyal, but that if they put the extra work in, their sales will reflect this.
“The gift shop certainly does have place in today’s market,” asserts Mahon of Cotswold Trading. “Customers come to us because they want a different shopping experience. They may want to purchase a special gift for someone, look for inspiration for lighting up a particular room, or wish to treat themselves, as they know they will find an eclectic array of products. That is not something that you can say about every big store.” Unlike the major chains, you as an independent gift store owner can stay connected with your customers and maintain the sense of trust."
“Gifts are usually bought with some emotion,” agrees Swallow. “It’s hard to have an emotional experience in Tesco - it’s a functional place. Customers will often share their joy of a new baby or even the sadness of a friend's illness that is attached to their purchase.”

September/October 2010
issue 61
available now