Our county administrator spoke on the Bart Hawley Show that despite the "goverment estimates" that say our county population is growing or at least staying constant, there are signs that Jackson County is shrinking. The home foreclosures, the homes for sale versus the homes being bought, and the vast availability of rental units says people are moving out, looking for work wherever they can find it, just not here.
So my wife turned to me and asked, "What are you going to do now?"
It's a valid question. How do you keep your business afloat when your population base is shrinking?
A shrinking population may be more challenging than new competition. With a new store entering the market you know their strengths and weaknesses and can exploit them to your advantage. But when the people are going, going, gone, what next?
The first answer is "expand your territory". If you're a neighborhood store, become a city-wide destination. If you're a county-wide store, become a regional destination. Of course, that means you have to make some radical changes to your business model. You have to give people a reason to drive that much farther to see you.
That reason could be product. Is there something you sell on which you could corner the market? In today's Internet world, that is hard to do - possible, but hard.
That reason could be service. Is there a service you offer that no one else offers? Is there a way to offer such over-the-top service that people call their friends to talk about it? Sure. It takes time and effort to get to that level. But it can be done.
That reason could be store design. Is there something remarkable about your store that makes people want to drive just to see it? I have never been to an Ikea store, but I hear so much about them that I'm compelled to eventually make the trip. In the toy industry, you can't go to NYC without stops at FAO Schwarz and Times Square Toys R Us. Of course, store design on that level requires thousands, nay millions of dollars. And who has that to spend?
The second answer is to become more important to the community you currently serve. Are you involved in community groups? Serving on committees or boards? Not only do you gain in visibility for your store, you gain relationships with people and businesses that can help you through tough times. You also get your ear closer to the ground so that you hear and can respond faster to changing times.
A third answer to meeting the challenge of serving a shrinking population is to expand your offerings. Are there categories of products you haven't offered that you could? Are there items customers request because they think you would carry it but you don't? Grocery stores used to sell food. Now they sell everything from stamps to socks.
I'm not saying you should run out and invest in a whole bunch of inventory just because, but ask yourself if there is an area in which you could expand that would draw some traffic. Years ago, when Hughes & Hatcher went out of business, we applied for the right to carry Boy Scout and Girl Scout merchandise. The target audience was a perfect fit. And although profit margins are fixed quite low, the draw of the line more than makes up for the low profits.
To recap, here are three things to do in a shrinking market:
- Expand Your Geographical Reach - exclusive products, over-the-top services, or incredible merchandising that will bring 'em in from miles away
- Expand Your Involvement - Get involved in your community and network, network, network
- Expand Your Product Selection - Look for new product areas to serve your current customer base