One Sure-Fire Way to Compete With Big Retailers.

When a company achieves massive scale, the advantages this brings can seem daunting to compete against from the view of smaller competitors in the category. A combination of bigger budgets, more sizable market presence, more professional websites, larger inventory, aggressive discounting, generous exchange policies, and robust loyalty programs can create a feeling that there is little a smaller company can do to truly compete. In retail specifically, smaller businesses find battling with larger companies a grueling task.

But there is a way for these smaller spenders to use the activity of large spenders to their advantage. The strategy: draft off the message, steal from the funnel.

Draft Off The Message, Steal From The Funnel

Large retailers spend more on mass media advertising. While this brings them more share-of-voice, it also creates a “wake in the water” of the marketplace that others can use because large ad campaigns drum up consumer interest in whatever product or service is being promoted. And when this happens, interested buyers will go to the web and search for more information. This is when smaller retailers pounce.

Here’s how:  

– Have a paid search buy that was specifically created to draft off of that large retailer message the moment it started running in the market.

– Use the same message points and subject matter that the big spender used.

– Add a local twist that local customers will respond to. Small retailers have the luxury of knowing their local zip codes far better than larger retailers do. Certain zip codes around a store will have acute needs that a large, national player may not know, or care about.

This ad group then serves whenever a consumer is traveling through the purchase funnel past “consideration,” and it’s possible that they choose the smaller retailer with a strategic search campaign instead of the large one who produced the TV ad. (In fact, it can be surprising how large spenders forget to integrate local paid search ads to their mass media retail message points.)

For example, in the spring, Home Depot might run a TV ad campaign about gardening. When that goes on-air a local nursery in a part of Seattle surrounded by leafy neighborhoods can run a paid search ad campaign about flowers that grow best with limited sun. This drafts off the awareness of gardening but serves something hyper-local to interested buyers. Draft off the message, steal from the funnel can be played across many industries, from home appliances to furniture, to electronics.

If keyword costs are high, small retailers can save a notable portion of their budget, and wait. They can watch the media for what the top two players in a category are advertising, then quickly craft ads and launch immediately after mass media is seen.

This all works because, for the large retailer, success comes from achieving regional/national scale of sales. But for the small retailer, success comes from winning their local zip codes. Drafting off the message of the big spenders, and then stealing from the purchase funnel is one sure-fire way to compete.