How small retailers can give a multinational a hard time
Posted 12 August 2008 at 8:36AM by Ian Betteridge in Doing business online
For most small retailers, the arrival of a competing multinational chain in their area is a sign of impending doom. Take, for example, coffee, where the opening of a Starbucks in the neighbourhood often leads small, independent coffee houses to ponder a new career.
However, the arrival of a chain doesn't have to mean the end for an independent - as Australian coffee shops have proved. For Starbucks, the chain which has previously conquered everything before it, has closed 61 of its 85 stores across the country.
So why has Starbucks been a relative failure down-under when virtually everywhere else it has succeeded?
I spent two weeks in Australia earlier this year, and one thing that I noticed almost immediately was that the coffee was of a uniformly high standard - so high, in fact, that coming back to the UK was like walking into a sea of poor coffee.
Secondly, the number of coffee places was very high. A small square or six places to sit and drink, ranging from one-off independents through to local chains. This means that Starbucks will have had greater difficult in saturating localities, as it does in other cities - because there was already a good choice of decent coffee.
Finally, the quality of the independents was incredibly high. Not only did the small, one-shop businesses we visited have great coffee, but they had fantastic ambience, great service, and real character, as well as often doing great food, too. Unlike many small shops in the UK, there was no hassle if you sat and lingered for as long as you wanted.
There are some universal lessons for small businesses here. When faced with a big chain moving into your locality, concentrate on customer service and quality. Get to know your customers - one shop we visited had the same staff working pretty-much every day, which meant they got to know us as regulars very quickly. That meant better, more personal service, which increased the likelihood of repeat business.
But most of all, don't give up. The Australians have proved that the little guy can compete against the big corporations, and win.
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Comments
2. At August 13, 2008 11:26 AM, the master chief wrote:
Just an open thought- did you realise that the lack of comments could be related to the stupid redesign of the website making it extremely difficult to locate the blog.
3. At August 18, 2008 9:25 AM, 'Razor' Ramone wrote:
"Just an open thought- did you realise that the lack of comments could be related to the stupid redesign of the website making it extremely difficult to locate the blog."
Bang on, as soon as you log in, the blog is gone. You need to hunt to find it, most casual browsers, or people with other things to do (which is just about everyone) will simply not bother any longer. Especially since those posting on the blog were the biggest (or at least most vocal) objectors to the changes to the website. Quash the voice of dissent by removing the ability for the dissenters' voices to be heard. Lovely.
On-topic however, I think JG has it spot-on again. You move into a market too late and you fail. Starbucks moved into a market in the UK where the only real competition came from Costa Coffee, an essentially identical enterprise. There were a few decent coffee shops dotted about, but most places (cafés, burger vans, even some restaurants) were still selling swill in a cup; hardly surprising Starbucks could prosper.
4. At August 18, 2008 5:54 PM, Derek Hemphill wrote:
Hi Razor - it was certainly not our intention to "quash the voice of dissent". We know we still have some work to do on the visibility of the blog, and we will in fact be moving it this weekend so that it becomes easier for people to find, regardless as to where they arrive from.
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1. At August 12, 2008 11:05 AM, J G Dawson wrote: