10 Ways That Your Small Business Can Compete With Big-Box Retailers

Shopkeeper and saleswoman at cash register or cash deskIf you’re going to compete with bigger businesses on your terms, you need to think and act quickly. Here are ten tips to guide you:

  1. Be agile when responding to your customers
    Like a speedboat compared to an oil-tanker, smaller businesses can move faster than larger ones when market conditions change. Keep careful track of your customers’ interests and preferences and you’ll be able to anticipate their requirements. You can also take advantage of these relationships to check in with customers and prospects on a periodic basis. Ask for their feedback on your product or service, shop and website.
  2. Don’t slash your prices
    Competing on price with the big players is usually a bad idea. Economies of scale mean that the larger stores have more purchasing power than you, and can drive down their suppliers’ prices.    
  3. Negotiate with your suppliers
    You might not be able to get their prices down by much, but you could negotiate other deals. For example, you could get a range of products in your shop before the big retailers. Or you might have some product lines custom-made for you.
  4. Be different
    In some retail sectors it’s important to be seen as stable and predictable, but in others you can have some fun. Make the most of your different perspectives, get your employees involved, add quirky side-notes in your marketing material. This will help people remember your business.
  5. Offer the personal touch
    Deal with your customers on an individual basis – that’s something big businesses can’t easily do. Nobody likes dealing with a faceless entity, so give your company a personality that customers want to interact with. Reward your employees for thinking creatively about how best to serve customers.
  6. Use technology to stay in control
    A few years ago it would have been difficult for one person to manage the accounts, inventory and point of sale for a retail business. Now it’s much easier, thanks to cloud-based software that can be accessed from your smartphone, laptop or tablet at any time. Choose quality accounting software, POS tools and inventory management programs to save yourself time and money.
  7. Be socially responsible
    Be aware of the politics of corporate greed. Big business has a tainted reputation for many people. The perception is often that they ignore concerns about the environment, poverty, tax law and other legislation. Whatever the truth behind those beliefs, they can work in your favor as a small business.
  8. Appeal to ethically-minded consumers
    Small businesses can appeal to the large and growing market sector that cares about sustainability, fairness and ethical trading, while still making a profit. Think about where you source the products you sell and look into product labeling that shows customers how ethical you are.
  9. Get the best staff
    The appeal of smaller companies applies to employees too – so make sure to hire people who are passionate about small business. Many of the brightest young minds want to work in a fun, lively and challenging environment. That’s more likely to be the case in a small business than a large one.
  10. Get the best out of your staff
    Employees of big companies are driven by their career and salary – the success of the business itself is less important to them, though it does still matter. Staff at small businesses have much more influence over their company’s future – if you let them have it. Think about employee reward programs and get your staff involved. They’ll reward you with hard work, creativity and good ideas.

Which approach will work best for you?

If you feel able to take on the larger retailers at their own game, then there’s no harm in trying. E-commerce has certainly made it easier for smaller businesses to behave like larger ones.

But these days honesty might be the better policy. There’s no shame in being a small business. In fact, for reasons we’ve discussed, a lot of customers prefer dealing with smaller businesses than bigger ones.

If your small business strategy is good, your customers will even do your marketing for you. Take fashion, for example. “I bought this dress from a big department store,” doesn’t sound as impressive as, “I found a lovely little shop tucked away in one of the side streets. They have all sorts of interesting clothes.”.

Use your passion to your advantage

We’ve covered the practical ways in which your business can compete with big-box retailers, but there’s one other vital ingredient.

Above everything else, the big advantage you have as a businesses owner is your passion. You didn’t start running your retail business on a whim. You started it because you feel passionate about your market sector and because you know and care about the products you sell.

So make use of that passion. Your drive for success, your hunger for innovation, your deep knowledge of the things you sell – those are the traits that will give your business the edge over big-box retailers.

It doesn’t matter whether you decide to compete directly or use your small size to your advantage. Whichever option you choose, if you do it with passion you’ll have a much better chance of success.

Learn more about how to start and grow a successful retail business during a FREE webinar, hosted by Xero, on Wednesday, November 19th with special guest celebrity DJ Peanut Butter Wolf.


  1. Jeanne Busch says:

    These are interesting, and to some degree also apply to services if you substitute “big box retailers” with “big-4 consulting firms” or other appropriate goliaths. I think one of the real keys is to understand the value you bring and make sure you communicate that to your clients.

    • Very well said Jeanne! Many thanks for your comment. I agree with you. It’s easy to get caught in a wordy explanation of our work that doesn’t mean anything and confuses our audience. If we stick to talking about problems and solutions, it’s easy to convey our value. 🙂

  2. Great tips! Thanks, Sydni!