Small Retailers

The good news for small retailers is this: the big companies will actually do very few, if any, of these things. The strength of will is not there. Lower and mid-level managers will avoid risk-taking. At higher levels, with shareholders and analysts watching, the willingness to forgo profits in favor of market share will not materialize. Short-term results are the order of the day.
This strategy that must be implemented from the top down, so that risks can be taken at all levels. As such, it is ideal for smaller retailers with strong involvement by management. Analyze your distinctive competence. What is your competitive advantage relative to the "big guns"? Cost? Location? Product lines? Service? Emphasize them. Take heart – you will thrive.

Summary: Conceptually, the strategy is "Retailing Reaganomics" – outspend the competition when they are fearful and contracting. Much of the cost of execution is in "soft costs". Actual cash outlay is small.

A window exists now which will last for at least another year. But the strategy must be executed soon. The correct st

The ideal time to build market share based on loyalty 

Now is the ideal time to build market share based on loyalty – a loyalty that will carry through the recession into the following recovery. This is loyalty based not on price, but on customer service.

The standard defensive posture involves cutting costs. Usually this means cutting staff payroll. But from a strategic perspective, this has four major drawbacks.
First - cost-cutting ruins customer service. The more you cut, the less service you provide. This builds business based on price alone. It does not build loyalty
Second - cutting staff means losing some of your better people. When the recovery begins, you must replace them – with less-experienced, less-qualified staff. And at a dollar cost.
Third – recessions create insecurity, and managerial insecurity leads to micro-management. Managers avoid risks, do what is safe, do what they think they know. In short, they regress. This is especially true of mid-level managers, who are the most insecure. Insecurity is also a poor motivator.
Fourth – the defensive posture reinforces the status-quo. By default, it determines that there will be no significant change in the market positions of the competitors.