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Can We Compete With the Mega-Retailers?

Copyright © 2015 by Davis Multimedia, Int'l. All Rights Reserved.
As Printed in April 2015, Volume 40, No. 10 of The Engravers Journal
If you offer sublimation, you can offer a huge assortment of gift products. Shown here are a sublimatable bottle Koozie, wine tote, cup sleeve and coasters available from Johnson Plastics, Minneapolis, MN.

   It's no secret. Thousands of articles have been written, studies have been published and seminars have been conducted on the topic of the emergence of mega-
retailers causing devastation among smaller businesses and mom and pop retailers. If you are like me, you have no doubt browsed the Internet and seen the incredible number of large companies that are offering a huge selection of personalized products conveniently and at low prices—www.personal
izationmall.com is one that comes to mind. Or perhaps you have visited a brick and mortar big-box personalization store in your area, like Things Remembered, to get a better feel for your big-name competition.
   If you are like me, ominous questions come to mind when you see what these businesses are doing. How long will there be room for the little guys and gals like us? Can small retailers survive in the shadow of these retail giants? Is it even possible for mom and pops to compete successfully? More importantly, can smaller, single-location outlets win?
   Interestingly, research has also been done that shows that small businesses can survive—and even thrive—amidst mega-competition. As I examine these huge operations, I am encouraged to realize there are not only ways we can compete with these big guys, but ways we can beat them at their own game.
   The first mega-personalization store was Things Remembered. With over 600 locations in the U.S., the company has a heavy presence and has had one since the 1960s. As we look at the operations of businesses like these, there are a lot of things they are doing right, but in reality there’s very little we can’t counter effectively—and profitably. There are also some things they are doing wrong—at least in my opinion. Here’s a look at what these mega-retailers are doing and how we can compete.
Compete With Your Flexibility
   Believe it or not, an enormous drawback of large chain-operated businesses is their sheer size. Being big isn’t everything. Small businesses are more nimble and better able to make changes to adapt to trends and customer requests nearly on-the-fly. You can swiftly introduce what’s touted to be a hot new product and just as quickly remove it from your shelves if it isn’t selling, something the large businesses aren’t set up to do without maneuvering through a lot of red tape. You can stock the products that you want to stock. And, if you want to, you can “give a guy a break” when prices get a bit high or a customer needs a favor. Small businesses are agile which means they can take some risks that large businesses cannot and if they realize that, it can be a huge advantage.
Compete With Customer Service
   As a small business, you can also connect on a more personal level with customers. I encountered three salespeople in my outing to the local Things Remembered stores. Only two spoke to me at all. One greeted me with, “What occasion are you shopping for today?” Once she knew I was just browsing, she gave me no further attention whatsoever. If she had, I might have purchased something.
   As small business owners, we can easily outperform larger businesses in customer relations by giving personal, one-on-one attention to our customers, and we can go the extra mile in doing so. When was the last time you received a personal note from the owner of a large company thanking you for your business? Or a note congratulating you on a milestone or achievement in your life? As small business owners, we can easily make simple gestures like these that can make a world of difference to customers. It generates good word of mouth and keeps them coming back.

Laser engraving is a versatile process that allows you to personalize a wide variety of award and gift items. These wood photo albums from LaserBits, Inc., Phoenix, AZ, hold up to 100 4" x 6" photos and can be quickly personalized with a laser.

   We can always meet or surpass the friendliness with which we greet and care for our customers and, likewise, we can always meet or surpass the big guys with the customer service we provide. Before I bought my first engraving machine, a mentor told me that if I did three things, I would be successful in this business: 1) Deliver on time, 2) Deliver only top-quality work and products, and 3) Do it right the first time and when something goes wrong, fix it NOW!
   That was good advice that amounts to quality customer service and that’s something we can definitely compete on. In fact, I would venture to say that many smaller businesses are better at offering excellent customer service.
Compete With Your Showroom
   The fact that the Things Remembered locations are in malls gives them a lot of visibility, which is good for spur-of-the-moment purchases (particularly during the holidays). Plus, for many potential customers, the store in the mall is the only exposure to an engraving shop they know (as much as we hate to admit it).
   However, the problems with mall locations are many. First, they are extremely expensive. Not only is the rent high, they usually demand a percentage of sales as well. Plus, the store must be open during all mall hours, including holidays. That combination must cause their overhead to balloon. I have been told that mega-personalization retailers do the vast majority of their annual business in just two months of the year (around the holidays). This makes for a lot of lean months when more money might be going out than coming in.
   I know of one business in our industry that was very successful competing in a mall setting. John and Judy McDaniel cut a deal with a mall in Oregon for a kiosk that they could run only during the Christmas season. This kind of deal is very unusual but was highly successful for them.
   Something else that is being done right by the mall retailers is the appearance of their stores and kiosks. I visited two stores in my area prior to writing this and have, over the years, visited a great many other locations as well. The showrooms are very appealing, well laid out and functional. Even the tiny kiosks they use are elegantly designed to show off lots of products in an appealing way.
   This might be a lesson to us that having a fully stocked, up-to-date, clean showroom is essential. It is a bother and can be expensive, but it is difficult to sell what the customer can’t see. That is probably the single most important reason people like to go to the mall and shop. They know the mall is probably the most expensive place but, unlike shopping on the Internet, they can touch and feel what they are buying. If they come to our showrooms and see just a few types of products here and there, they will be disappointed and think, “This place is small and doesn’t have much to offer.” Why would they come back?
   No one can anticipate all the products that customers might want and while there might have been a time when just about everything available to us could be displayed, that is no longer true. There is no way that even the largest showrooms can display everything that is available today (or even a fraction of it). It is important, however, to show a wide-range of the merchandise that you offer so you can market your business as a “gift and recognition” center. That’s what the mega-retailers do and it’s definitely something we can do, too.
   In the awards arena, that might include high-end crystal and glass corporate awards, traditional plaques, medals and trophies. On the gift end, it could include just about anything from jewelry to desk accessories to “trending” items like personalized phone covers and sublimatable flip- flops.

Things Remembered’s website is driven by a database that allows customers to search for gifts based on the occasion and the recipient.

   Things Remembered’s concept of organizing the merchandise by occasion seems very logical to me and it’s a strategy that I think would provide a fantastic marketing boost to a lot of smaller retailers. If you visit one of these stores, you will see that the merchandise is displayed in separate sections on the showroom floor. For example, there is an area for baby and children’s gifts, wedding merchandise, gifts for him, gifts for her, desk accessories, glassware, graduation, etc. You will also see seasonal display areas throughout the year, e.g. a section for holiday gifts, Mother’s Day gifts, Father’s Day gifts, Valentine’s Day gifts, Easter gifts, etc. Each of the display areas is clearly defined and features appropriate gifts for those occasions. This is a great concept, particularly for those customers who are shopping for an occasion but have no idea what to buy. It works well for customers who know what they are looking for, too, as they may see something even better (and more expensive) than what they originally had in mind.
   No matter how you organize your showroom, be sure to use quality displays. There are lots of professional display cases available from suppliers, you can make your own or you can repurpose something you have, like that unused bookcase, desk or dresser in your basement. The point is, of course, to be sure they are clean and professional looking. It’s worth it to spend some time and money on your display fixtures—the big guys do and so can you.
   Of course, you should periodically add new products as they become available, but a big secret to keeping a “fresh” showroom is to rotate your displays and periodically change them around. I have often had people come in and say, “I love coming here. Every time I come in, there is something new!” The truth is, there probably wasn’t anything new. I just kept moving the merchandise around to make it appear fresh and up to date—different from their last visit.
   What if your display area is limited and you can’t provide a fully stocked showroom? What then? Although never comparable to an actual product, there is a lot to be said for catalog sales. Customers know you can’t stock everything and are willing to shop catalogs when they want something special. After all, that’s essentially what Internet shopping is. The important factor here is that you know your products and don’t have to fumble around searching for stuff.
   Good catalog salespeople spend a lot of time studying their catalogs so they can recall in an instant who makes what and where it can be found in that mountain of printed and Internet catalogs we get every year. In a recent article, I talked about using an iPad or computer for doing this (“Creating a Virtual Showroom,” Feb. 15). Not every supplier’s catalog is online yet, but most are. The search features included in most online catalogs really help and people are impressed when you show them nice big color images on a computer screen rather than just in a printed catalog.
Compete With Your Personalization Processes
   The mega-retailers in my area do most of their in-store work using diamond drag engraving on a computerized engraving machine. Many of us, on the other hand, can offer many more in-house personalization services that they tend to avoid, such as rotary engraving with rotating cutters, laser engraving, sandblasting, hot stamping, embroidery, sublimation, digital inkjet printing and screen printing. This means we can offer many more options for personalization with quicker turnaround. Even if you don’t have a certain capability in-house, there is undoubtedly a business in your area that does that you can partner with, which means you can still offer fast turnaround.

One of the benefits of being a small business is that you can very quickly and easily introduce hot new products to your customers, such as personalized phone covers. Photo courtesy of Condé Systems, Mobile, AL.

   Things Remembered’s pitch is that they will engrave your purchase while you shop in the mall. This works when things aren’t busy and when they can do the work in-house, usually in about an hour or two. However, during the holidays, this isn’t typically the case because that is their peak season and, in most stores, it only applies to items that are diamond drag engraved. Things Remembered does offer other processes, such as embroidery and sandblasting, but these orders are all done in a central fulfillment center so time for shipping has to be added to each order and, in many cases, the cost of shipping as well. We can beat that by offering and promoting in-house personalization and fast delivery.
   Another highlight that we can play up to our advantage is our “highly skilled and professionally trained staff.” When I asked one manager at a personalization mega-store what they engraved with, she told me “a needle.” She had no clue what rotary or drag engraving was. We spend a lot of time and money training our staff in many fields, including customer service, design and, most of all, decorating and engraving. You and the people you hire are more knowledgeable about engraving and personalization processes than their people, many of whom are hired for a seasonal, entry-level job with no experience whatsoever. Letting your customers know that your engraver has been with you for ten years says something about the professionalism of your business and the quality of your work. It stands to reason that a highly trained professional is far more desirable to engrave a customer’s gift than just someone “off the street.”
Compete With the Web
   If you have been in the engraving/personalization business for some time, you are probably aware of the changes that are taking place in our industry. With the introduction of the Internet and e-commerce, we are seeing more and more people buying online—especially the younger generations—and why not? Shopping can be done from the home or office, at any location and at any hour they like. Products are shipped to their door, and since everyone and every company has a credit card, payment is also easy. “Convenience” seems to be the word of the day.
   The mega-retailers, like many other successful companies, have taken up a strong, professional presence on the Internet. This is an expensive, time-consuming commitment and is daunting to most of us little guys. Still, we can compete more than you might think, and if you are going to compete at all in today’s world, you must have a web presence.
   There are at least a dozen big companies serving the online personalization market and they are definitely making an impact on our business. A few include Things Remembered, Personalization Mall, Café Press, Gifts For You Now, Vistaprint, Zazzle, LogoUp, Spreadshirt, Printer Studio, Shutterfly, Walmart, York Photo and Snaptotes, only to list a few. These are fulfillment houses and only a couple have actual retail locations. This means they can offer a broad selection of products and a variety of imprinting methods without the worry of a showroom, sales personnel or the high cost of a good retail location. Everything they sell is sold online.
   The great advantage these companies have over us is the ability to invest a lot of money in high-quality websites that make it very convenient and easy for consumers to shop. Many of these are driven by databases that allow customers to search the products available for personalization based on the occasion and the recipient, such as wedding gifts for the parents or birthday gifts for a teenage boy. On many of these sites, customers can actually design their products online by selecting graphics, messages, fonts, etc., and see a rendition of the finished result before placing their order. This removes a huge piece of the overhead associated with any personalized product. It also eliminates the responsibility of spelling errors and the like since the customer is doing all the design work and they must verify everything is correct before submitting the order. Such websites have always been custom designed and are rather expensive.
   A new company called iPersonalyze Network has introduced a way for us to offer the same ability for any of the products that we sell through a personalization app. The app allows the customer to choose the product, create the design and pay via credit card. All you have to do is produce the product and ship it out. Condé Systems, Mobile, AL, has been offering this to their customers for some time now and actually have most of their products preloaded so Condé customers don’t have to do anything but select what they want to sell, formulate the price and fill the orders.

Grouping like items together is a very effective showroom strategy. The side of this kiosk displays car-related awards and items in the showroom at Great Lakes Trophies & Engraving, Inc., Garden City, MI. Pleasance Trophies, Windsor, ON, Canada, uses antique jeweler’s cabinets to create beautiful showroom displays to highlight products.

   One of the benefits of the iPersonalyze web solution is that it can be attached to a Facebook page. This turns Facebook into a marketing tool that not only tells people about you but gives them the opportunity to design their products, place the order and pay for it in one simple process. It can also be attached to other people’s Facebook pages, with their permission of course, so the members of groups, churches, schools and organizations can order products related to the group just as if they were on your website.
   The important point, at least for now, is that you have some sort of presence on the Internet and that it appears professional. This means you need to showcase as much of your product line as possible and in the most convenient format possible, taking a clue from the mega-web-based marketers. If you have an e-commerce site, all the better, but if you don’t you need to make sure it’s easy for customers to contact and order from you.
   One of the biggest headaches of building an online catalog of your products in a website is photography. Yet, most suppliers, upon request, will tell you where they store the pictures they use in their catalogs and allow you to use them for free. This amounts to a treasure trove of professionally staged photographs that can really enhance your site.
   You can also link your suppliers’ catalogs to your website. This is easy to do and the information remains updated and current because the supplier does that work for you. Some catalogs will show retail prices and some will show no price at all—an issue I struggle with sometimes. Catalogs should never show wholesale prices to the public but if they do, just don’t use them.
   Another way to effectively market online is to create multiple websites to showcase and market your products. Granted, it takes a lot of time and effort to maintain one website, let alone two or more, but it can be very effective. As another option, instead of individual websites, you can create multiple domain names and direct all of those to a single site or to a single page within a website. For example, say you want to sell wedding gifts, school mascot items and trophies. Just purchase domains that are likely to be called up when someone does a search for “weddings,” “schools” and “trophies.” You can set it up so that each one immediately links the customer to the same place—your website.
Promote! Promote! Promote!
   Marketing is, perhaps, one of the biggest areas where small businesses fall short when it comes to competing with bigger competitors. We offer high-quality products, the best personalization services, nice-looking showrooms, top-notch customer service and fast turnarounds. But when it comes to actually promoting the business, many mom and pops tend to rely on a few small advertisements or promotional pieces here and there, and word of mouth. This is a mistake. The mega-retailers actively promote their businesses and, even though you don’t have the deep pockets that these businesses do, you can too.
   In a survey I did years ago, I found that the vast majority of engraving shops had budgeted zero for advertising and many of those that did have a budget wasted it on things that would bring no return. It is vital that we find a way, or multiple ways, to tell people who we are and how to get to us. Think about this single goal: Get them in the store.

Another good showroom tip is to display merchandise that has actually been personalized. These sublimatable glass photo frames are available from Laser Reproductions, Inc., Skokie, IL.

   Things Remembered and other big retailers have a leg up in a sense since mall shoppers know right where to find them. We, on the other hand, must find a way to tell customers where we are and what we can offer. Our locations might actually be even more convenient than the mall, but unless customers are actively looking for us, we will go unrecognized. When I built my first brick and mortar store, I located it on one of the busiest streets in the city and paid to have a fancy neon sign that covered the entire front of the store. Over 100,000 people passed the shop every single day. Yet, even years later, I constantly had people come in asking how long we had been there, and these were people who passed by the shop twice a day, five days a week! We have to do a better job of telling people where we are!
   There are many ways to market your business, including traditional advertising methods like the Yellow Pages, print advertising and direct mail. But in today’s digital age, there are more modern marketing strategies that you can use that cost a lot less (if they cost anything at all, except time) and can yield better results. Namely, I am talking about social media and email marketing.
   Social media marketing is low cost and provides you with a direct connection to current and prospective customers. Think about your website and your store as your “home base” and use your social media channels to push customers to your website and/or store where they can see what you have to offer, buy products and/or find their way to your brick and mortar business. The idea behind social media marketing is to engage people, inform them about what you have to offer, build trust and direct them to your website and storefront.
   There are various social media that you can use, including Instagram, Pinterest, Twitter, Snapchat, Google+, LinkedIn and Facebook. Experts suggest starting with one platform that your desired clients are on (most likely Facebook in our industry) and building from there. You can post information about current deals, upcoming events and reminders for people to come check out your business. Be sure to include plenty of photos—people like visuals. Some of the biggest benefits of social media marketing are that it makes your brand more recognizable through repetition and you are virtually putting your name in front of thousands of potential customers without shelling out a dime. All of the mega-retailers mentioned earlier have Facebook pages and you should too. Check them out for some ideas.

The mega-web-based retailers, such as PersonalizationMall.com, have an interactive feature on their websites that allows customers to input their personalization information and see the result on the product before making a purchase.

Carrying a broad selection of products will help you sell to a larger customer base. This Teddy bear with a sublimatable T-shirt is available from Johnson Plastics.

   In addition to social media, you should strongly consider email marketing. Studies repeatedly show that email marketing is one of the most effective ways to reach and retain customers (in some reports, better than social media). Consider the fact that you already have an existing customer base that you can target. Your email marketing campaign can include an e-newsletter to let people know what’s happening in your business and the community, targeted seasonal emails (It’s the Holiday Season! See Our New Line of Personalized Ornaments!), coupons, special event announcements, contests and more. It’s free and it’s effective. Use it to your advantage.
   Competing with someone bigger than you are is never easy, but it need not elicit fear. No matter how big or powerful, there are always things you can do better than they can. Better service, a higher quality product and personalization, faster service and, yes, a lower price. As much as I hate it when companies compete on price, Things Remembered is one I compete with on price. Although their products are nice quality and fairly priced, by the time they add the engraving, the price soars far beyond what I would ever charge for the same product.
   “People buy from people” is an old mantra, but it’s true. If you build a relationship with your customers, they will keep coming back and they will tell others when they receive good service. The Internet marketers could hardly be colder since the customer usually never has any human contact with the company at all and, if they do, it is because of a problem. Making the most of the time you have with each customer is paramount. Make sure they are happy. If you make a mistake, fix it—immediately and for free. Do what’s right and most people will return the favor. Don’t sell your products based on having the lowest price (ok, Things Remembered is an exception), sell quality, service, friendliness and fairness. If you do that, you can beat out these other companies almost every time—provided they can find you!