In English they are known as Mom & Pop, a term that describes those businesses that are owned and operated by small entrepreneurs, usually by families who have decided to risk capital to open a small business. In this classification we have small shops or sundries, local bakeries, independent pharmacies, the neighborhood bookstore, cafeterias, mechanical workshops, aesthetics, etc…
These businesses see the main threat to their survival in the large commercial chains. Large retailers, such as Walmart, Liverpool, Domino’s Pizza or Home Depot, enjoy many benefits that are mostly inaccessible to family businesses. They can take advantage of economies of scale to reduce operating costs, secure capital investment, and allocate large budgets to marketing and innovation campaigns. These companies are much less vulnerable to any changes in the local markets. Family businesses often find it difficult to compete with big box retailers when it comes to the price of products and services. In order to maintain a profitable margin, smaller businesses may not be able to offer their customers discount, wholesale deals in the same way that large retailers can.
Thus we have seen how clothing stores, bakeries, tortilla shops, small fruit and vegetable stores, pharmacies, among others, are literally devoured by large supermarkets and shopping centers. Mechanical workshops are threatened every day by franchises entering the market; independent aesthetics by large chains of beauty salons, among other examples. How can family businesses differentiate themselves and be successful in today’s environment? How can they compete with the big commercial chains?
Here are 4 proposals.
1. Exceptional Customer Service: This is a great advantage that family business owners should capitalize on every day. Unlike large supermarkets where the customer can enter and leave the store unnoticed and without having had a personal interaction with an employee, Mom & Pop customers can personally interact with the employee or owner of the business. This coexistence must be maximized to offer a service with the highest quality standards and always seeking to make the client feel special and well cared for. This generates happy and loyal customers.
2. Offer personalized products: Large commercial chains can offer standardization of products on a large scale, as in the case of McDonald’s where a hamburger is practically the same throughout the world. But the appeal of personalized products and services is growing, and this is an area where family-owned businesses have a unique advantage and opportunity to shine, especially since they can quickly change their service offerings to keep up with new trends and stay relevant. . The consumer values these small details and gives their loyalty in return as a thank you.
3. Align with consumer values: today the trend of local consumption is growing. There is greater consumer awareness to give preference to family businesses, either because they produce locally using local ingredients and raw materials, or because they appeal to sustainability, inclusion, diversity and ethical values. Family businesses should take every opportunity to proudly promote their status as a minority-owned or sustainable business that sources all products and services locally; doing so is almost guaranteed to boost customer loyalty.
4. E-commerce: the pandemic forced family businesses to reinvent themselves in order to survive. With declining sales and on the verge of bankruptcy, these businesses had to turn to see e-commerce as their great ally or last alternative in order not to disappear. The good news is that technology today is more affordable and cost effective. There is no reason for family businesses not to offer digital customer experiences. From simple solutions such as accepting electronic payments, home deliveries, to web pages or apps where the customer can interact with these businesses.
They are some basic and pragmatic ideas, but well executed they can give results in the short term without the need for large investments. Today family businesses must think and execute changes in favor of their customers, to offer them a better shopping experience with higher quality and personalized service. On the other hand, consumers can create a moral commitment to support these businesses, especially those that do things well, that offer quality products and services, since in the end, they will be supporting the country’s economy.
