The old certainties in life are no longer so certain. Banks are thieves is probably the only one now they are holding onto all that taxpayer money used to bail them out. But now you can no longer rely on the yellow pages or a great location giving you the traffic in a town, what happens when the new superstore opens on the edge of town and moves the centre a few hundred yards away and footfall reduces. Neither your feet nor your fingers do the walking now it is much more likely to be your mouse or trackpad. However as we shall see there is still a place for the location and niche.
I have seen this in two real life examples recently and I want to expand this into the small business area. When in the UK I visited my hometown Widnes. I haven’t been back for a couple of years. My surprise was a whole new town centre, an economy based now on the big superstores rather than the small shops that previously existed and the shopping precinct I used to know falling into disrepair due to the effect of the big new superstores nearby but not quite near enough.
The second example is here in Spain, a ring road around a town or a new motorway means that many towns that relied on the passing trade for survival are now dying and rural depopulation is happening as the young move into the cities to look for work. It is just like Radiator Springs in the Pixar movie “Cars”.
So what were the old certainties?
Location. If you have a shop you need a good location. That is still as important as ever but you cannot get locked into a long term contract because the footfall may move as in the case of Widnes.
Advertising. The Yellow Pages were totally a must for anyone with a business in the past. However on a quick straw poll recently of people both in the UK and Spain I found out that very few people look in the Yellow Pages now. If they want information they go into the internet and find it. The straw poll included older people too and that can only increase in the future as technology becomes more inclusive. Therefore you need to be visible on the internet to get your virtual footfall. Increasingly this means having a presence on page one of Google for your local area. As people get more internet savvy they are making their searches more long tail and more local. Nobody searches for “shoes” as an example. They are more likely to search for “Shoe shops in Widnes” and move on from there. If you have your website optimised for that term and you are paying Google and other search engines for when people type in that term, then you will get much more targetted traffic. More importantly that traffic is likely to be much cheaper than having an ad in the Yellow Pages whose only marketing seems to be blackmail, ie If you don’t take this space then your competition will. (Check out this survey in Melbourne, Australia)
Image. The image you give out in your shop or your online presence needs to match your product or niche. Previously the old shopfronts only changed with the seasons. Now you must attract people in with the best offers and services up front and if you can do that by giving them away then you have more chance of building a relationship with the customer. What can you give away online or offline to get your customers in and start the relationship.
Social. You need to build a social relationship with your customer. You need recommendations and a strong brand image. More and more people make their buying decisions based on social proof. Just look at websites like Trip Advisor, the feedback system in eBay or the reviews on Amazon. Of course this can be gamed but if you do your research thoroughly online then you can be much more sure of not making a mistake in purchasing.
So is there a place for the old ma and pa shop on the high street?
There sure is. However rather than being a generalist they need to focus on a niche market and again I saw examples of this in the UK, of thriving shops in niches.
The major sports shops dominate all high streets now but the small ones that thrive have taken a niche and made it their own.
In Shrewsbury, there is a sports shop that focusses on just three sports, cricket, rugby and tennis, with cricket being the big one. The prices are high compared with online shops but people go there for a couple of reasons.
Firstly, the knowledge of the owners is huge. They can also get any product related to those niches really quickly. They leverage that knowledge to make upsells of further equipment.
Secondly, they are not on the main street so footfall is not huge. However, they are nearby and people make a detour to go there because of the niche domination. They have identified a large local interest in the sport, through the private schools nearby and cricket clubs in the area, and they market directly to them.
The question is whether the shop would be as successful if it were more generalist selling leisure clothes and brands of trainers and competing with the bigger sports shops on the high street. The answer is a resounding no of course. Those that tried have been wiped off the face of the high street.
Online you can do something similar. Drill down in your niche, become an expert and promote locally through an international search engine. Demographic and regional targetting allow you to do this in a highly leveraged way.
How can you apply this to your business today? What certainties are you relying on?
I look forward to your replies email and tweets about this.