How to survive in a very tough market

Today's economic times are among the most challenging many retailers have ever faced. Even wealthier consumers are changing some of their buying habits, becoming customers of Wal-Mart, for example, rather than shopping at department or specialty stores. For retailers in the DIY field, the situation is requiring an adjustment to fix-it projects instead of big projects, of consumers making do with what they have, rather than replacing with something new. It is a time that calls for finding ways to offer better service to customers, better value, better product selection, innovation in everything one does. As major retailers announce substantial employee reductions, smaller retailers, especially single-store or small chain operations, may find it necessary to curtail employee hours rather than dismiss their employees. The problems facing big chains present opportunities to smaller competitors, because big-box customer service is sure to suffer with fewer people on the sales floor. If smaller competitors can provide better service, it will help create lasting customers. One smart idea is to promote the expertise of individual sales people. This will boost their morale, while at the same time trumpeting your ability to better serve customers and help them solve DIY problems. In the United States, big chains like Home Depot and Lowe's also have been increasing gross margins over the last few years, to the point today where the spread between their prices and that of independent and small chain stores is much less. "Smarter" pricing is also necessary, being competitive on price-sensitive items and gaining extra margin dollars on service items not stocked by the big boxes. One must create some buying excitement as well, and that can be accomplished by introducing and featuring new products before big chains can get them distributed through their channels. One must also create excitement with unusual advertising and promotions. An example of such ideas is distributing coupons that offer substantial discounts (50 per cent) on any one product up to a value of $ 25 or $ 50. Getting savings like that will bring in customers who will walk the entire store searching out items on which they can take advantage of the big discount. Dealers who are doing this report double and triple normal sales. While gross margin percentages drop, gross margin dollars increase tremendously and customers become familiar with you, your store's breadth of inventory and your qualified…