One of the most daunting challenges facing the locksmith industry today is how to compete with the Big Box Retailer. Because of the economies of scales they represent, these retailers may be able to sell locks cheaper than locksmiths can even purchase them. While most of the industry realizes that...
One of the most daunting challenges facing the locksmith industry today is how to compete with the Big Box Retailer. Because of the economies of scales they represent, these retailers may be able to sell locks cheaper than locksmiths can even purchase them. While most of the industry realizes that these products are not equal in terms of quality, consumers (and contractors) who are outside of this industry do not.
In order to effectively compete with this channel, you must be able to communicate the value of using a professional locksmith to your customer.
What advantage does your business have over a Big Box Retailer?
Before you can communicate your message to consumers, you must first understand what value your business brings to the marketplace. While this seems like a very simplistic statement, most locksmiths position themselves in the marketplace in a way that suggests they don’t truly understand the difference. Here are some key factors that would influence a consumer to choose your establishment to do business with over that of a Big Box Retailer:
- Specialized Experience. While employees at a Big Box Retailer may be trained to cut keys or a variety of other services, there is no doubt that the “hands on” lock experience your employees receive each day makes them the most qualified players in the market. The level of knowledge that is readily available in your shop is unmatchable, from technical and installation expertise to security and feature knowledge that you can not get without “hands on” experience.
- Certified Technicians. Offer the expertise of certified and experienced technicians who install a variety of different security products on a daily basis. Choosing even the right product is the wrong decision if it is not installed correctly. Your business can offer full service that the Big Box Retailer can not compete with. Coupled with that service is the certified training that backs up each and every job you do.
- Knowledgeable Staff. The knowledge of a locksmith goes well beyond that of the owner and his technician. Through proper “hands on” training and day to day experience, most staff members are fully equipped to meet the needs of today’s customers. Imagine if employees in your shop had never taken apart a lock or installed one before. What kind of recommendation could you possibly give customers on what security meets their needs?
- Needs Assessment. Your trained staff can help determine which solution is best for the end user. The clerk at the Big Box Retailer sells what he has on the shelf, often without knowing what the end user’s needs really are. To make matters worse, the end user often is not clear as to his options and which are the most appropriate for his application.
- Commercial Quality Products. Sometimes this relates to not only the quality of products but also the levels of security available. To most consumers, all locks are pretty much the same, and Big Box Retailers tend to market them that way. The value provided by the locksmith is carrying and recommending the proper level of security for each application. One of the greatest strengths the locksmith has over the Big Box Retailer is in the higher end products they choose to carry. The more a commodity a product becomes, the easier it is for a Big Box Retailer to dominate the market with it. As long as price is the most important issue to the customer, the the Big Box Retailer maintains the advantage.
- Product Breadth. Lock shops, like most small business that have gone through a similar market lifecycle, must offer something different (a differentiation strategy) to the market to survive. The best way to achieve this is to prevent direct price comparison by offering a full line of products, not available in other channels. This relates to a good, better, best scenario; which allows you to help your customers determine what level of security is necessary for their specific application. Combining the full range of security solutions with your expertise allows customer to become more knowledgeable and choose what solution is right for their application.
- Commercial Expertise. Because your business specializes in commercial applications, you have access to customers and references that other retailers do not. While a lot of the decision making process for residential applications is made based on price, commercial applications require more service and installation experience.
- Product Exclusivity. Although there is a cross over of some brands in the Big Box channel, there are still a variety of locksmith products sold exclusively through the locksmith retail channel. By recommending products that consumers can not purchase through other retail channels, you are preventing your service from becoming a commodity. The more access customer have to purchase a brand, the more likely they will base their purchase on cost.
While Big Box retailers certainly are not your only competition, as an industry, they have become a formidable threat. By simply understanding the advantages the locksmith carries in regards to this competition, will help your business map out a successful strategy to compete with these retailers.
Choose products and services that will help you compete successfully.
To compete successfully in this market, you must choose the right mix of products and services to position yourself as the security expert, not just another place to purchase a DIY lock and key. When choosing the proper products to offer to your customers, keep the following things in mind.
1. Am I selling better quality products than that currently available at the Big Box Retailer? If I am, then I have a substantial argument as to why a consumer would pay more for a product through a locksmith than a Big Box Retailer.
2. Can the customer find the same equivalent product in the Big Box retailer? Even if the “exact same” product is not sold in the Big Box channel, will consumers perceive my product as a comparative equivalent? There is always value in explaining to a consumer “why” a product is only available through a locksmith.
3. Do not choose a commodity product that will be purchased solely on price. If you are forced to compete on price, you will never be able to compete.
These are just some of the things to keep in mind when trying to go head to head with a Big Box retailer. First, know your advantages and position yourself with the right partners who can help you leverage those advantages. In upcoming issues we will talk about:
- How you can use these advantages to craft a strategy specific to your business.
- How to choose the markets most suitable to your business based on your strategy.
- How to craft the proper market message to those consumers.
As part of a targeted marketing focus to help locksmiths compete effectively with the Big Box retailers, www.arrowlock.com will be providing a variety of free tools available to the locksmith, throughout the year. Each one of these tools will be outlined in upcoming articles in this publication.
Brad Smith, Brand Manager, Arrow