rDialogue's Rubin: Big retailers can learn from mom and pops

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Larger retailers can learn a lot from the loyalty and customer service of mom and pops.

Smaller retailers being crushed by the bigger guys is just a myth. According to Phil Rubin, CEO of rDialogue, small businesses almost always have the advantage and in fact, apply a lot of pressure on larger entities to try and compete on customer service and loyalty.

As Small Business Saturday approaches, Rubin offers some advice that all retailers can learn from their local, community store. 

FIerceRetail: What is the effect of Small Business Saturday (SBS) on larger retailers?

Phil Rubin: All things equal, SBS diminishes share of voice for large retailers and puts more pressure on them in other ways:

  • Having to be locally relevant the way a small business is (always a challenge for national/global brands);
  • Demonstrating that they are part of a local community, that they invest in and give back to a local community, and that their people are visible as brand representatives within that community;
  • Delivering a personal experience is more natural, and easier, for a small business to do;
  • Seeing that a larger retailer has a non-American Express, co-branded or private label credit card, it puts pressure on choice of tender for customers.

FIerceRetail: What are the advantages that larger retailers have over smaller ones?

Rubin: Larger retailers have a more consistent opportunity to dominate media investment and share of voice. They also benefit from broader lines of merchandise (depending on the category), value in the form of one-stop convenience and e-commerce, pricing power (savings potential). If they have invested in loyalty marketing, they can offer targeted customer experiences that create a strong and relevant relationship between the brand and their most loyal customers. 

Larger companies also tend to have strategic partners that also help offset the “partnership” power that American Express brings small businesses, specific to SBS, like private label or co-branded credit cards or with entities like Uber. 

FIerceRetail: Can you give us five habits of SMBs that larger retailers can learn from?

Rubin:

1. Like that local shop owner calling out your name when you walk in, know your customers and recognize them. Through technology and data, there’s so much that can be done to connect with customers.

2. Small businesses sometimes organically remember what customers buy; larger operations can track customer purchases and other activity so that customers feel remembered.

3. Small businesses are flexible, and can, for example, offer modified holiday hours that align with the local culture. Larger retailers should think about how to be convenient and accessible (physically and personally) for their customers.

4. No one likes waiting in lines. Small businesses often personalize the waiting experience, making it less painful. Larger retailers must offer an efficient purchase experience. 

5. Give people a reason to shop with you as opposed to somewhere else—and understand that it isn’t always about the lowest price. Have distinct merchandise and services, including localized assortments.

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FIerceRetail: With the holidays coming up, how can retailers stand out and make the experience as inviting as within a small store?

Rubin: First, don’t start promoting end-of-year holidays until after Halloween at the earliest; this helps avoid the diluting factor of the season. For example, Nordstrom sets their stores on Thanksgiving—it gives loyal customers something special to look forward to. If holiday merchandise creeps onto the shelves in October, the opportunity to build that anticipation is lost.

Second, preview special merchandise arrivals and curate offerings specific to customers; these tactics are a great way to make your most loyal customers feel special and get them in-store during a critical time of year.

Finally, provide easy shipping and gift wrapping services; this convenience and opportunity for direct, positive customer service is invaluable. 

FIerceRetail: What else can you tell us about small versus large retailers and winning business in 2017?

Rubin: Small can and does win, even in brutally tough categories. One of my favorite examples is an Atlanta-based menswear merchant, Sid Mashburn.  They have about five stores and a relatively short tenure compared to competitors but they fight way above their weight class. They are delivering a highly branded, curated experience, without discounting other than a semiannual sale. Everything they do has its own Sid Mashburn-ness to it, as opposed to increasingly generic offerings from larger chains. Businesses that can find ways to be highly relevant and make their customers feel special have an advantage—and big retailers can achieve that if they harness data and listen to their customers.

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