Road to Recovery: Small Stores vs. Big Retailers

In this lingering recession, small retailers are having to get clever and offer more than just unique products and superb customer service.

At an independently-owned Fleet Feet in Davis, California, which sells high quality athletic gear, competing against the Target down the street means standing out in other ways.

"There are things that we do that they can't do: they can't give the one-on-one personalized customer service. They're not going to be serving their customers breakfast on Friday morning," says owner J.D. Denton.

Creative events, fun promotions, a friendly atmosphere. These are just some of the ways small retailers are surviving in this tough economy, when big box stores can offer similar products at a cheaper price.

While many small stores have closed, or are barely staying afloat, others like the Fleet Feet in Davis, are thriving. "We project good growth over the next few years," Denton says with a smile, because he knows his signature products are being sold down the street for less.

Small business owners can't compete on price. Experts say that to weather the storm, owners need to bring added value to the overall shopping experience. "They've got a niche, they service their customers, they provide a quality product. Those are the businesses that are going to survive," says Scott Hague, a small business advocate based in San Francisco.

Some small businesses have come to rely on customized marketing.

While she can't afford to publish a glossy catalogue or take out ads in the Sunday paper, Sarah Shaw uses social networking to announce new arrivals to her cozy boutique in San Francisco's Pacific Heights neighborhood. "We post every time we get new merchandise, photograph it, and put it on Facebook," Shaw says. "I have a blog that people visit regularly so they know what we're getting in." She also maintains regular email contact with her regulars.

Unlike at big department stores, Shaw's customers say they get personalized attention, and save time because they don't have to sift through scores of dress racks, often located on several different floors.

That's an experience for which her customers are willing to pay more-- paving her road to recovery, after a few very tough years. "I have full confidence that by Spring, we're going to be back where we were a few years ago," Shaw says.

In fact, many small business owners hope to not only start hiring again in 2011, but invest in strategies that set them apart from the mega retailers and deliver a clear message: When it comes to getting more bang for your buck- smaller is better.

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