The Point: Why This Matters
- Offer transparency and clear communication. SMBs can differentiate themselves from big box stores by being transparent and straightforward in their pricing and promotional activities, which can help increase consumer trust and loyalty.
- Personalized and tailored services. One common customer experience deficiency that plagues big box stores is the lack of personalized and tailored customer service, which creates an opportunity for SMBs to stand out by providing individualized support that caters to each customer's needs.
- Get to know customers. By investing time and effort in getting to know their customers at a one-to-one level, SMBs can create authentic, personalized experiences that can lead to customer loyalty and repeat business.
Big box retailers often struggle to deliver a personalized and efficient customer experience, which can create an opportunity for small and midsize businesses (SMBs) to differentiate themselves and attract customers. By identifying and addressing the common customer experience deficiencies that plague big box stores, SMBs can create a competitive advantage and build loyalty.
Below are some areas where SMBs can capitalize on big-box CX deficiencies:
Offer Better Transparency to Overcome Challenges in Customer Experience
“The most common customer experience challenges that may plague big box stores can relate to customer satisfaction and personalization,” says Bob Vormittag, CEO of Vormittag Associates. Big box stores like Walmart and Home Depot have more fulfillment power than SMBs due to their size, but if a large retailer has a supply chain hiccup, web outage or similar issue impact CX, the outcome can be more detrimental than for an SMB. The big box retailers can struggle to develop personal relationships and loyalty with individual customers and prefer to use data-driven tactics to lump entire groups of consumers together.
“For example, many big box retailers have loyalty programs, but in recent years they increased the points needed to unlock a discount or introduced hidden fees resulting in consumers noticing these discrepancies and becoming frustrated by the lack of transparency,” Vormittag said. This distrust opens an opportunity for SMBs not only to be transparent in their customer communication practices but also increase their own consumer loyalty through personalized touchpoints, enhanced loyalty programs and perks that not only differentiate from big box retailers but showcase the business’s ability to meet individual customers’ needs.
Big box stores often lack transparency with their pricing, discounts and promotions, said Ryan Mckenzie, Tru Earth CMO.
“Customers can be confused when faced with multiple prices for the same product or unclear descriptions of promotions," Mckenzie said. "To take advantage of this deficiency, SMBs should make sure they are transparent and straightforward in their pricing and promotional activities to ensure customers know what they are getting and at what price. This can include clear and easy-to-understand pricing structures, as well as offering limited-time discounts or other promotions.”
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Offer Tailored Services: Opportunity for SMBs to Stand Out
One common customer experience deficiency that plagues big box stores is the lack of personalized and tailored customer service, which can be a major pain point for shoppers, Mckenzie said.
“Customers often have to wait in long lines without being helped and the sales associates are not always knowledgeable about the products on sale," Mckenzie added. "This can create an opportunity for small and midsize businesses to differentiate themselves by providing personalized, tailored customer service and support that caters to each individual’s needs.”
Provide Authentic, Personalized Customer Experiences
One of the largest challenges faced by big-box stores is creating authentic, personalized experiences, according to Keith Kirkpatrick, Dash Research principal analyst.
“While the use of CDPs and CRMs can help provide basic personalization, it is hardly the same as truly getting to know and understand customers at a one-to-one level," Kirkpatrick said. "Big box retailers, in particular, do not generally incentivize employees from investing the time or effort to truly get to know customers, and many do not encourage any insights learned when interacting with customers to be recorded and referred to during later interactions.”
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Staff turnover is often high at these large, corporate retail stores, so customers and employees are often unable to develop authentic, lasting relationships, Kirkpatrick added. It’s this personal touch that can truly make a difference in creating relationships that generate customer loyalty and repeat business.
For example, during the COVID-19 pandemic, musical instrument retailer Ish Guitars shifted to an appointment-only sales model, which accomplished several goals, Kirkpatrick said. “It cut down on foot traffic that was seen as undesirable, and it allowed staff to spend more time getting to know each individual customer who came into the showroom in an unhurried, relaxed environment," he said. "This special attention allowed the customer to let the store know which products or services were most appealing, so that the retailer could order or stock the products they were confident would be received well by their customers.”
Related Article: Scaling Your Small Business — and the Marketing, Customer Experience Impact
How a Good Tech Stack Can Help SMBs Take the Lead in CX
Small businesses and digitally native or scaling brands have a leg up on CX over their big box counterparts that often starts with their tech stack, said Cory Cummings, Pack CEO. “Research shows that today’s shoppers will turn to a competitor if they can’t find what they need after one website search, or if a site takes too long to load. What’s more, 30% of millennial shoppers would actually forgo buying items from a big box retailer in favor of ecommerce sites with a quicker path to purchase.”
While ecommerce sites should inherently be built for speed and performance, many legacy retailers contend with having a single technology or platform dictate how they build and present their brand to the world, Cummings added. SMBs should consider a new approach to their ecommerce architecture that decouples frontend, customer-facing layers from backend business processes.
Final Thoughts on Capitalizing on Big Box CX
Big box stores can typically offer some better pricing — they can command better pricing from suppliers, and can better afford to use a product as a loss leader — and will have a wider selection of products.
But SMBs can still make themselves the consumer’s preferred option by capitalizing on big box CX deficiencies.