Do you know what your competition is up to?

You know the impact of Mystery Shoppers and Secret Students—but did you know how much you, as an independent retailer, can maximize your competitive advantage by shopping your competition?

Defining Your Competition—And Your Competitive Advantage!

Who is your competition? Jot down the independent stores in your town as well as the chain craft stores, big box retailers who sell craft or scrapbook supplies, and the photo processing stores. Make a plan to visit each of these retailers. Give yourself plenty of time to get the complete customer experience.

One Independent’s Experience

One independent Oregon scrapbook retailer shared her competitive shopping experiences. She shops her local competition on a regular basis, alternating between 6 independent scrapbook stores, 2 different stores in the same regional chain and 2 different nationwide chains. Ironically, she does not shop her nearest competitor, another independent scrapbook store; instead, she visits the stores in the nearest large city, about 30 miles away.

Going Incognito?

For most independents, the biggest obstacle to shopping the competition is a fear of being embarrassed or mistreated. “I’m worried about being asked to leave—so I’ll never set foot in another independent store,” said one retailer. “Chain stores, no problem. Independents, no way.”

Don’t let this deter you from shopping as many competing stores as possible. Some retailers go incognito when shopping the competition, others introduce themselves.

“When I visit most stores, I introduce myself as the owner of a small scrapbook store in a neighboring town,” says our Oregon retailer. She’s had two retailers visit her store who introduced themselves and the store they were affiliated with. “For all I know, other stores have done the same but didn't announce themselves. I have a few people I've come to recognize who check all my product and prices, thank me and leave without a single purchase. It always makes me wonder if they are one of the home party consultants in my area, or are they affiliated with another retail store?”

What to Shop For?

“When I visit another store, I do so mainly to see what they carry,” shares the Oregon independent. “I am also aware of prices and general atmosphere.”

When shopping your competition, whether you’re visiting a craft chain store or another independent, look for product selection, price and customer service.

Take a notebook and jot down your impressions after you leave the store. Ask yourself:

• What product lines do they carry?
• How much of their product selection overlaps mine?
• Were the prices similar to mine?
• How was the customer service?
• What was my overall impression?

Finally, ask yourself: What is this store’s competitive advantage? How does it compare with my competitive advantage?

And finally, how can I turn my mystery shopping discoveries into profits? We have the answer for you: With savvier product selection, competitive promotions and increased customer service.

Better Product Selection

“On a recent trip to Texas, I visited two large independent retailers,” says Hot Off The Press President Paulette Jarvey. “What was interesting was the product selection: both stores carried exactly the same merchandise—right down to many of the same fixtures! As a customer, I couldn’t help but wonder what made the stores different.”

This product selection situation is more common than you might think—which is one important reason for you to shop your competition. You may be carrying the same merchandise as the other stores in your area and not even know it.

Our Oregon retailer tells us another independent retailer offered to split orders. “My feeling was that it didn't behoove us to carry the same products. Scrapbookers are going to shop the stores in a given area, and if they find the same products in both of our stores, they'll drive a greater distance to another store to find something unique and neither of us will have their business!” she says.

How Does Your Competition Affect YOUR Store?

“If a chain store picks up a line I carry, I’ll be shopping elsewhere.” Sound familiar? How does your competition affect you? Do other stores influence what product you carry?

Beating the Chains

Don’t forget to competitive shop the craft chain stores in your area—independents may learn some surprising facts.

At a retailer panel at HIA, an independent retailer announced that she stops carrying a product line once the chain stores pick it up—no matter how much product (or how little) the chain store carries.

When visiting the one of the Texas stores, the retailer said she couldn’t carry Paper Pizazz™ because Michaels did. Sound familiar?

“I admit I stay away from as many products as I can that are carried at a craft chain store,” says the Oregon independent, who wants to maintain a more exclusive product selection. She cites the chains’ ability to offer lower prices and discount coupons to customers as another reason for avoiding chain-carried merchandise. “Customers can purchase an item with a 40% discount coupon! Why would they buy it from me?”

Why indeed? What about the rest of your product selection?

This retailer listed four popular scrapbook vendors whom she’s effectively boycotted because they’re carried at Michaels or Jo-Ann’s. While it is important to differentiate your store from the competition, you don’t want to exclude popular, nationally advertised product—after all, this is the product your customers will see in the magazines and ask you for!

Shopping your chain competition will provide you with a profitable solution. “Don’t assume the chain carries an entire line,” advises Paulette. “Hot Off The Press, for example, has over 800 items. No store, no matter how large, can carry all of these items—much as we’d like them to!” Paulette cautions independents to see just what the chain store buys, then carry other merchandise from the same line. Hot Off The Press has 410 different bulk papers, of which Michaels offers 19. “And independents interested in expanding their current selection will be interested in the Paper Flair™ card-making line,” says Paulette.

Independents can maximize their competitive advantage by carrying product from popular vendors without duplicating the exact items. “Because chain stores set planograms once or twice a year, this gives independents a window of opportunity to stock new product as soon as it’s released,” says Paulette. “If the chain store carried some Paper Pizazz™, carry those items the chain doesn’t.”

Another truth about your competition, straight from your customers? Consumers shop at chain stores because they’re convenient, not necessarily because of the 40% off coupon. After all, the chains are open on weekends and evenings—a retail tactic that appeals to a lot of shoppers. And most shoppers don’t necessarily have the time or the inclination to shop every store in the city. They want to be able to buy all the supplies needed at one convenient location.

Don’t Miss The Opportunity!

“The Texas retailer I spoke with refused to carry any Hot Off The Press products because of chain stores—regardless of whether or not the product was in the chain store,” says Paulette. “This retailer missed out on three of our best-selling idea books, simply because she didn’t want to carry any Hot Off The Press.”

Creative Promotions

Product selection is just one of the areas where independent retailers can focus while competitive shopping. Promotions is another area. Some of your competition will be competing with you on price—the chain stores do this with 40% and 50% off coupons. Other independents might promote loss leaders to get consumers in the store, exposing the customer to the regularly-priced merchandise.

What if you can’t compete on price? Leverage the brand names of the merchandise you carry instead! Capitalize on those recognizable, well-advertised names by promoting “Biggest selection of Paper Pizazz™ in town!” or “Newest stickers from Mrs. Grossman!” After all, these companies spent time and money to promote and advertise their product in order to benefit you—take advantage of this promotional help!

Customer Service

Ask any independent retailer and she’ll tell you her biggest competitive advantage is customer service. Yet it’s easy to get caught up in the pressures of retailing and forget what it’s like to be a customer! Competitive shopping helps many independents keep in touch with the consumer experience.

How were you treated as a customer on your shopping trip? What tactics do you want to incorporate into your store service—and what tactics do you want to avoid at all costs?

Product, Promotions and Service: What is YOUR Competitive Advantage? After competitive-shopping a few stores in your area, you’ll probably have a better idea of what your competitive advantage is. Don’t be alarmed if it’s changed since you first opened your store. Retailers who once prospered based on low prices may have to switch gears in order to compete with a new chain store or a savvy independent.

Keep visiting other stores in order to stay abreast of your competitive environment. You’ll never know what you can do better if you aren’t aware of what your competition is up to!