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Are merchants losing sales to service-light competitors?

Have you ever spent ages with a customer, giving them all the advice and guidance they need about materials and stock for an upcoming project, only to lose the actual sale because they found it cheaper elsewhere?

Most merchants have, at one time or another – whether they know about it or not. In an age where pricing and availability is so easily compared across different vendors, it’s only natural to lose out sometimes.

While the expertise that enables merchants to provide that depth of knowledge in the first place is often invaluable for customers, it’s not always enough to inspire the loyalty to complete the sale, even with longer term customers. But for merchants, it costs double – not only have you lost the sale, but you’ve also invested the time and effort to ensure your staff have that knowledge in the first place.

Are service-light competitors – i.e. those who simply source or stock products for quick sale, rather than providing the expertise and advice (think, online retailer, for example) stealing market share from merchants? The statistics would suggest so – but why is this happening? And how can merchants respond?

Why are merchants losing out?

Undoubtedly, the reasons are complex and will vary from situation to situation. It may be a more common occurrence with public sales rather than trade – but it definitely happens. Here are just a few of the reasons:

  • Information about products and materials is generally more easily available elsewhere these days, so some customers are less reliant on merchant advice in the first place

  • Some “service-light” business models have fully embraced the power of technology to fulfil some elements of the service, design and planning proposition – for example, the 3D flooring, kitchen design or tile sites which allow you to play with design and calculate the required materials for yourself

  • The issues of availability and fluctuating costs, compounded by Covid, Brexit and the Russia/Ukraine conflict – not to mention the rapidly rising cost of living – have made everyone more cost-and-availability conscious than ever. It has become normalised, and in many cases very necessary, to shop around widely

  • It’s easy to shop around to check cost and availability and buy from where it suits – customers want the most convenient option, and sometimes that’s about delivery and availability, not just price.

  • There is simply more competition. Merchants aren’t just competing against other merchants. Online retailers and the rise of marketplace selling has made an already competitive industry even more intense.

So what can merchants do about it?

You need to consider each of the reasons you could be losing out on sales and tackle them head on. This might include:

  • Make sure your product information is great and continue to be a destination for expertise – which could also involve technology to help you scale it so do take advantage of the tech solutions available

  • The biggest single advantage merchants have against (particularly online) competitors is having products and materials in stock then and there. By making sure you have the best stock control system in place to help you manage, plan and merchandise your stock in the best ways to suit your customers’ buying needs, you can make more of having better availability and take away one of the biggest reasons people purchase elsewhere

  • Ensure your pricing is in line with the market without losing out on valuable margin. Use tracking tools in your stock and order management system to responsively manage pricing and analyse stock selling patterns to make sure you’re pricing products appropriately.

  • Reducing your overheads by using intelligent business management software that can help you scale your operations without having to incur additional cost-heavy overheads will enable you to be as keen as possible on price and offer the best value

  • Reducing waste can help you operate in a more lean and efficient way – not just reduced material waste, but reduced time and resource as well. Again, using modern ERP software to help you hone your business processes will be a huge advantage here.

  • Invest in online, click and collect, and great transport planning software to help you get more efficient and fast at delivery and order fulfilment. Hit every one of those convenience goals your customers are looking for and stop giving them reasons to look elsewhere.

  • Make sure you are working with the customers that work for your business and not wasting too much time on those who you owe nothing to! Your merchant ERP software can help you to understand who your good customers and suppliers really are, and therefore help you work in a more targeted and intentional way with the customers who deserve your time and energy investment.

There are hundreds of potential reasons why you might be losing out on sales and this is not an exhaustive list. You also need to work out what the impact of lost sales - or the opportunity of more sales - is for your business.

Modern ERP software can be a huge advantage in working out how to tackle this, identifying opportunities and highlighting gaps. Your business software can help you to address and remove the underlying reasons why people might go to your competitors instead of you, and maximise your chances of winning more sales, more often, and more profitably.

You need to be able to operate in a way that lets you compete on convenience, price and easy accessibility, yet retain the expertise, product quality and instant stock-availability that sets you apart. And a great business management software system is the foundation of how to achieve that vision.


We believe that Merchanter is part of the solution for merchants looking for a competitive, operational edge. If you would like to see what the system can do for yourself, please register here for a 100% free 30 day trial of the online demo system.


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