How to Compete with Online Retailers

It’s No Secret

Retail businesses have been under assault from online retailers for some time. Let’s face it, shopping online has never been so easy, convenient or, dare I say it, satisfying.

And why not? The number of products available on the internet is truly staggering. Online retailers are always open, and customers can shop for products at any time, day or night, in their jammies, right from their computer or even their phone.

Furthermore, online retailers have access to lots of inventory. Whatever the customer is looking for is probably available – at an attractive price. And in many cases, the purchase made online will likely be delivered overnight, at no charge, to the customer.
Yeah, it sounds like they have it all figured out but, the truth is, they don’t.

Your Key Resource

So far, online retailers haven’t found an effective way to engage with customers directly.

It’s difficult for online retailers to ask if the customer is finding what they are looking for or direct them to what they need. Instead, the customer has to poke around, do various searches, and scroll through multiple web pages until they find what they want. What if they aren’t sure what they need? How do customers get help from someone who actually has answers?

This limitation is where the traditional retailer has a leg up. Offer your customers something the online retailers just don’t have: real live people to direct them quickly to the product or service they need. This is how to compete with online retailers.

Offer something the online retailers don’t have. Real live people to direct them quickly to the product or service they need.

A Good First Step

Knowing you have a real advantage is a big help, but there’s more work to do. Everyone on your staff is probably really good at showing customers the proper respect and courtesy, and more than willing to do their best to help customers where they can. That’s good, but it won’t be enough to give you an advantage over your online competitors. Customers expect to be treated well no matter where they shop. The next step is to give customers extra reasons to come to your store.

Images of a training session.Train Your Staff

If customers are coming to your store for advice about the products you sell and receive bad or inaccurate information, they won’t be back. To prevent this from happening, invest in the training necessary to keep your staff on top of the latest trends and innovations in your industry.

Many manufacturers and trade associations offer online training to keep sales people at the top of their game. Encourage employees to educate themselves during off-peak hours. Consider holding training classes before or after normal business hours. There may be some cost associated with keeping staff up to speed but the rewards will likely overshadow any short-term expense. When your employees have a better understanding of a particular area, it will be much easier for them to make add-on sales.

This doesn’t mean everyone has to know every little detail about each product in every department. Have two or three specialists in each area of your store. Specializing will give employees more time to focus on the area they’re responsible for. It will also ensure you can schedule knowledgeable people whenever customers need them. If you have a few people who can specialize in more than one department, even better.

Offer Services

Services linked to the products you offer is a great way to get customers to your door. Not only will you profit by providing the needed services, customers will be able to see what other products and services you provide that they can’t live without.

For example, would you even consider having a new key for your front door made by an online service? (Is that even safe?) Wouldn’t it be much faster and easier to have it done locally? Hardware stores can offer services that aren’t suitable or sensible to do online:

  • Re-keying locks
  • Glass cutting
  • Lawnmower repair
  • Blade sharpening
  • Cutting lumber to specific sizes
  • Screen repair
  • Propane tank exchange or refilling

It’s not uncommon for pet stores to offer dog grooming, custom blends of animal feed, and a bulk section where customers can create their own blends of pet food or buy in smaller quantities.

Many grocery stores sell prepared foods that are hot and ready to eat. Long counters are filled with everything from sushi, party platters, a variety of soups and salads, fried chicken, three cheese tortellini, you name it.

Catering to customer needs through services is happening everywhere. Think outside the box. Are there services you can provide?

Consider Offering Products or Services Unrelated to the Products You Sell

Some hardware stores are thinking way outside of the box. A quick search online will reveal several hardware retailers that have actually installed a deli or a coffee bar. Customers can roam the aisles of your store as they wait for their pastrami on rye or that tall, half-caf, soy mocha with an extra pump.

Loyalty Programs

If you’ve been in retail for any length of time you’ve probably heard all about rewards programs and how they get customers back in your store. Well, it’s true. They work. But, there’s another aspect of a rewards program you might want to consider.

A rewards program gives you an opportunity to collect useful information about your customer. If you have their home and email address, use that information to contact them directly through snail mail or email. Offer these customers a coupon, a special discount on an upcoming sale, or some other incentive to get them back in your store.

Want to stand out from your competitors? Snag your customer’s birthdate and send them a card before the big day, with a hand written greeting, to create an enduring memory.

Be Different

How about offering something your online competitors can’t? Look for unique or locally produced products for your customers. You won’t have to compete head-to-head on price and you’ll be able to set your store apart with products that would be hard to find anywhere else.

The success of any retail enterprise will ultimately rest with the ability to build strong relationships with customers and give them a positive shopping experience.

They Might Not Be Your Customers, But…

Take a look at not only who your customer is, but who is coming to your store with your customer. If your clientele is mostly male, why not stock some products that might be of interest to the ladies they bring with them?

If children are often brought to your store, is there a way to keep the little nippers entertained while the grownups shop? With the little ones are occupied, the adults can spend a little more time looking around.  They’ll be less distracted while being assisted (read influenced) by your well trained and knowledgeable staff. Anything you can do to keep customers cruising the aisles of your store is going to work in your favor.

Add-ons & Upselling

When customers come in looking for a specific product or a solution to a problem, they may not be aware of additional items they will need. Do your customer a huge favor. Save them.

Save them from:

  • making an unnecessary second trip to your store for the same project
  • visiting a competitor to get something they could have bought from you
  • frustration
  • poor results

Send them home with everything they’re going to need to be successful.

Once you understand what the customer wants, suggest any additional items they might need. If they have that one, great. Suggest the next thing, and the next thing, until you’re sure they’re prepared. Even if they say no to everything, it was a good opportunity to demonstrate knowledge and professionalism while potentially increasing the amount of the sale.

How a Point-of-Sale System Can Help

A lot of basic point-of-sale systems do a good job of accepting money from customers. Making the payment process go smoothly is important, but running a retail business is complicated.

Depending on the quantity of merchandise you offer, the logistics of getting merchandise to the customer is time-consuming. To keep staff members out of the office and on the sales floor, automate those time-consuming back office chores like purchasing, ordering, and receiving.

Electronic Data Interchange (EDI) allows a point-of-sale system to communicate directly with your major supplier to order merchandise for you. No need to even touch your printer, fax machine, or phone. Your order is sent electronically and confirmed in minutes. When your shipment arrives, the point-of-sale system will eliminate the need to manually receive your order. This saves hours of time and greatly reduces human error.

When determining which items you need to purchase, a point of sale system can help there, too. Some systems use your store’s historical sales data to reliably predict which items customers will be looking for in the coming weeks. When inventory purchases are based on upcoming demand, you will lower your overall investment in inventory. You’re able to meet customer demand with fewer out-of-stock events and park your profits in your checking account instead of in overstocked merchandise.

Let’s say that you’ve got this awesome, intelligent, feature-packed point-of-sale system in place, ready to automate all these time-consuming tasks for you. Taking the leap is going to be scary. If turning your inventory management over to your point of sale system gives you a queasy feeling, try it out with a couple of departments and see how it goes. You’ll get a chance to learn the new system and get comfortable with it. As you gain confidence, you’ll feel better about relying more on the technology you’ve invested in.

Change is Good

It is possible to survive, even thrive, in the current environment. Staying competitive may require you to think about your business a bit differently, to look at it through different eyes. As you figure out how to compete with online retailers, you may have to consider offering services or products that you never imagined in order to engage with your customers and get them to spend more time wandering the aisles of your store.

In spite of all the technology available to you today, the success of any retail enterprise will ultimately rest with the ability to build strong relationships with customers and by giving them a positive shopping experience each time they come to your store. If you can do this, you will create a legion of loyal customers willing to jump in their car and drive to your store to interact with you and your staff.

Why? Because they look forward to the experience they will have in your store rather than ordering something passively over the internet.


Are you making it easy for customers to do business with you?

Look at your store from the customer’s perspective.

How to Compete with Online Retailers:
The Checklist


Does your store open up early enough to serve contractors and stay open late enough for people who work all day?


Are employees actively greeting customers and engaging with them, directing them toward the products or solutions they’re looking for?


Is your staff well-trained? Do they have enough product knowledge to suggest add-on items that will increase the total sale?


Is your store clean and neat? Are prices displayed so they are easy to see?


Does your inventory reflect the unique needs of customers in your area?


Are you stocking the right depth of these and all other products?


Are you giving your repeat customers an incentive to return by signing them up for a rewards program?


How smooth is your checkout system? Are cashiers well trained and able to quickly handle any situation?


Do you have a salesperson working outside your store to find new customers and check in with your current customers?


Do you offer free delivery?

George Maginnis