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Strategies for Local Businesses to Compete with National Players

19 June 2023

To paraphrase Seth Godin, he said, “Amazon has won the online war, now begins the battle for unique experiences”.  Small local businesses face significant challenges when competing against large national chains and online retailers. The dominance of big-box stores and the convenience of e-commerce make it difficult for local businesses to attract customers. However, by implementing strategic approaches, leveraging unique strengths, and embracing innovative practices, small local businesses can effectively compete in the market. What are some of the strategies to compete?


Local businesses must start by emphasizing personalized customer service. They already have the advantage of providing personalized and attentive customer service that is often lacking in larger establishments. By focusing on building relationships and understanding customers' needs, small businesses can create a unique customer experience. For example, a local bookstore can offer personalized book recommendations, host author signings, or provide a cozy reading area, fostering a sense of community and loyalty among customers.


Local businesses must cultivate a powerful online presence. I am amazed at the number of local businesses that ignore websites, social media, and other digital assets. While online businesses pose a challenge, small local businesses can leverage the power of the internet to reach a wider audience. Establishing a strong online presence through a well-designed website, engaging social media profiles, and online marketplaces can help drive traffic and increase visibility. For instance, a small local clothing boutique can showcase its unique products on social media platforms, engage with customers through interactive content, and offer convenient online shopping options.


Local businesses must differentiate with unique local product selections. They need to double down on unique products and services not always available in larger stores or online. By curating a selection of niche or locally sourced items, businesses can cater to specific customer preferences and tap into a targeted market. For example, a specialty food store can stock artisanal products from local producers, creating a distinct offering that sets it apart from larger competitors.


Local businesses must foster community engagement. I am equally amazed at local businesses not taking advantage of their local chambers and networking groups. In many cases, networking may be the single most powerful element for a small local business to master.  Small local businesses can leverage their connection to the local community to drive customer loyalty. By actively participating in community events, supporting local causes, and collaborating with other businesses and organizations, they can establish themselves as integral community members. For instance, a local hardware store could sponsor a neighborhood clean-up initiative or host DIY workshops, fostering a sense of belonging and generating goodwill among customers.


Local businesses must enhance convenience and even delivery opportunities where they can be implemented. To compete with the convenience offered by large national chains and online retailers, small local businesses need to prioritize convenience for their customers. This can include offering flexible store hours, providing online ordering with in-store pickup, or even partnering with local delivery services. For instance, a small bakery can offer online ordering and delivery services to cater to time-strapped customers who value convenience.


There are numerous studies supporting these strategies for small local businesses.  A survey conducted by Small Business Trends found that 72% of consumers prefer to support local businesses because of the personalized customer service they offer.  A Google study indicated that 76% of consumers who search for something nearby on their smartphones visit a local business within a day.  The National Federation of Independent Business (NFIB) reported that consumers often choose local businesses due to their unique products and personalized services.


Competing against large national chains and online businesses can be challenging, small local businesses will need all the resources they can muster to win.  By emphasizing personalized customer service, cultivating a strong online presence, offering unique product selections, fostering community engagement, and enhancing convenience, small local businesses can effectively compete in the market. Through the evidence provided by studies and examples, it is evident that small local businesses have the potential to thrive by implementing these strategic approaches, connecting with their customers, and creating a distinctive identity that sets them apart from larger competitors.


John Newby is a nationally recognized Columnist, Speaker, & Publisher. He consults with Chambers, Communities, Business & Media. His “Building Main Street, not Wall Street,” column appears in 60+ newspapers and media outlets. As founder of Truly-Local, he assists chambers, communities, media, and businesses in creating synergies that build vibrant communities. He can be reached at: John@Truly-Local.org.