How Do I Compete, Let Me Count the Ways

Posted Jun 30th, 1997 in From Vito's Desk

How Do I Compete, Let Me Count the Ways

An article written by Vito M. Pirri for Natural Health Products Report (Trade Magazine) in the June/July 1997 issue.

Food For Thought

June/July 1997

Each day, new retailers with visions of health and wealth enter what is perceived to be a booming industry – health food. As pioneers who have broken ground and introduced many of the concepts and products that are so popular today, health food retailers are now facing stiff competition from venues, which have traditionally viewed our beliefs and products with disdain. Other industries have finally awakened to the fact that natural health products have mass-market appeal and they are cashing in on the “natural craze”. This trend is likely to continue in the near future, driven by aging baby boomers who refuse to surrender to infirmities of old age gracefully.

Being first on the street with a new idea or product however, does not guarantee greater sales volumes, more new customers or increased market share. Grocery and pharmacy chains with their massive purchasing power can offer many of our products at discount prices we can’t even begin to match, relying on volume rather than margins to make their profits. Specialty shops, such as fine food/gourmet stores and professionals such as aestheticians who have clued in on giving people what they want, now offer their customers natural health products and are siphoning off customers who could have been potential new converts to the health food cause. 

So while consumer interest in natural products is booming, so is the interest from the competition. In fact, many of health food retailers in the business today will be facing extinction if they don’t find new ways to market their products and services. The competition isn’t going to go away and you can’t turn back the clock. What worked for you as a retailer in 1980 does not necessarily work for you today, particularly if you’ve relied on a product to sell itself.

When starting a new business, real estate experts say that location, location, location, should be your primary concern. However, in this brave new information age, the customer must be the primary focus. Now-a-days its customer, customer, customer as a retailer’s top priority. It is a well-known statistic that we get 80% of our sales from 30% of our customers. By focusing on increasing the purchasing behaviour of our sales from the 30%, we can increase our sales. After all, it is much easier to increase sales of a customer already frequenting your store than it is to attract a brand new customer. So, the following events should occur, each time a customer enters your store:

  1. Customer is greeted by his or her name. If you don’t know it – find out. This can be accomplished in a friendly, non-intimidating manner and without talking about product. Ask them what they think of the weather, for instance, any topic that will ”break the ice” and offer you an opportunity to get to know this person. Take a page from Wal-Mart; there is a good reason they have staff who greet you as you come into their stores in the States.
  2. If this is a new customer, you can open the door by introducing yourself as the owner, manager, etc. A regular customer might like the opportunity of talking about their particular needs at the moment and view it as a time saving opportunity as well as evidence of friendliness. The more you know about your customer, the more you can satisfy their needs today an in the future.

    For example, if you know Mrs. Smith has two sons that play hockey, you recommend to her nutritious, high energy natural snacks that she could put in her kids’ hockey bags. You could also recommend vitamins for that age group and sports requirement. Ask how the team is doing periodically, too.

    Ask your customer if he or she has a pet. Anyone concerned about their own dietary needs would also be concerned about their pets.

    As you know, since processed food lacks many of the vitamins and minerals it should have, animals suffer from many of the same deficiencies we do. This way, you are showing concern for all of their loved ones and you may potentially increase the sales from that customer. A Humane Society donation box at the cash register is hard evidence of your concern and will not go unnoticed.
  3. Don’t trust this information to memory and do share your knowledge with staff. Customer information can be written on index cards and filed for future reference or even put into a computer database. Many software programs today allow for the addition of fields, which can be used to track customer preferences and are very useful in constructing customer surveys.
I am constantly amazed at just how little retailers know about their customers. We were recently consulting for someone who had opened a new store in a very small town. I asked the owner what he said to his customer when entering his store. He said, very proudly, “Oh, we don’t bother them. We don’t say anything!” This new storeowner will never get any further with his customers if this attitude does not change. While customers do not want to be harassed, they do want to be noticed, greeted and told about new product offerings, new staff, what’s on special, etc. They also want to hear about information such as government regulations, which will restrict the sale of products and impact on their choice of lifestyle. Store newsletters can be a particularly effective communications tool, to relay all this information. 

Gone are the days when our products could do the talking for us. With declining disposable incomes, today’s customer is careful about where and what they spend their money on and they demand better retail service. Making them feel genuinely welcome rather than a walking pocket book will get them thinking about spending more of their hard earned dollars at your store. The more of a conversation you can have with your customer, the better the rapport, the better the trust level and ultimately, the better the sale. And remember, not only you, but your staff as well, must follow these simple steps. Your motives and rationale require a full explanation. This article is the first in a series, which we hope will provide useful information to help the health food retailer combat the mass-market giants. Health food retailers can survive and thrive in todays, cut-throat market, but only if they put their CUSTOMERS FIRST.