Competition & Crowding Push Small Retailers into New Channels

Going into 2011, what seems to be keeping the small retailer up at night?  There are a number of issues you could call out.  Controlling costs is an ever-present concern, particularly as commodity prices rise.  For small retailers, who typically do not have the volume or the margins that larger retailers do, the increase in commodity prices can cause even greater pressures.

Big box retailers are also posing additional threats as many implement plans to move to urban centers. Small retailers have historically owned the downtown and urban area consumer traffic as big box retailers had not refined their suburban approach to fit an urban environment.  However, big box retailers are turning their focus on thriving downtown areas and cities which are experiencing a revitalization of their downtown development.  Consumer shopping habits are changing, and the big box retailers are looking to capitalize.

At the same time, leasing rates have stabilized, and with positive holiday sales numbers reported, 2011 has the potential to be a banner year for small retailers.

In fact, several opportunities abound in 2011. During 2010, small retailers began seeing their online presence as a means for both managing their costs and increasing their brand awareness.  This year, online efforts are expanding beyond just a focus on the website as a channel for online sales.  Now, small retailers are using social media as a meaningful tool for connecting with customers and developing awareness of product offerings and promotions.

While social media and other online means for expanding business into the market has been growing in acceptance over the past several years, small retailers have been slow to make use of these tools.  Last year, the tides began to change with 20% of small businesses reporting that they had developed a social media presence.

Are you utilizing social media to improve your competitive position?