Small-to-midsize (SMB) retailers have long been the backbone of the retail industry. They are the change agents that can shake up the industry and are very often where true change happens first. Unique products and excellent service are where SMB retailers have staked their claim. And to achieve truly differentiating levels of customer service, they are turning to technologies that once were only affordable by larger retailers.

That was the conclusion that the RSR team reached after benchmarking over 250 North American SMB retailers[1]. We wanted to identify the unique business challenges that these retailers face, to uncover the opportunities that come from those challenges, and to highlight if and how technologies can help address them.

To sum up the report, we found that SMB retailers have staked their claim by either by offering a unique product mix or by providing a service level that is above and beyond what larger brands can provide. Making information about products available on the sales floor to both customers and employees plays a big part in SMB retailers’ service offerings. Consumers today view instant access to relevant information about products, prices, and availability almost as a birthright. Retailers should respond by making that information available on the sales floor. The good news is that always connected (and usually mobile) technologies have commoditized to the point where even the smallest retailer can afford them, and cloud-based services can put sophisticated capabilities directly into the hands of employees in the same way that consumer mobile apps do for modern shoppers.

We wanted to validate our conclusions, and so reached out to one successful SMB retailer, Ron Burke, owner/operator of the Hilton Head (South Carolina) Ace Hardware. Hilton Head is a tiny island community in the low country region of South Carolina, known for its beaches and golf courses, as well as it’s unique part in American history. Ron’s store, like many Ace Hardware stores across America, is known for catering to the lifestyles of the town’s residents, and it prides itself for being a go-to destination for both craftsmen and “weekend warriors”. And like so many other Ace Hardware stores, Ron’s store is doing well despite some really big competition (Home Depot and Lowes) only 15 minutes away to the west of the island.

Over 8 years ago, Ron visited Hilton Head from Chicago on a family vacation, fell in love with the place, and ended up buying the Ace Hardware store there. “I’m not a reluctant retailer”, said Ron, “it was a fun project that got out of hand. We just got done with a big expansion and remodel a few months ago – so we’re right in the middle of everything!”

So, how does Ron differentiate from the Home Depots and the Lowes of this world? “It’s really two things”, Ron explained. “Our differentiation is in our people and service, but it’s also in our products. We’re a hardware store, and we try very hard to get specialty items for this area, but we also try to exploit brand exclusivity whenever we can. We’re not outpricing or out-inventorying anybody, but those things set us apart.”

RSR’s survey revealed that the top thing SMB retailers want their employees to do (by a large margin) is to be knowledgeable about the products they sell. The 2^nd most important “ask” is for employees to assist customers in the aisle. The question is, what kind of challenge is created by emphasizing those things?

According to Ron, “first of all, it’s pretty easy to find experienced part time help around here. Many times, employees’ work and educational experiences fit perfectly with what we’re trying to do. And then we incentivize them to stay. To fill the gaps – because not everybody’s an expert at everything – we really rely on the Ace Hardware corporate training, called the Ace Hardware Badge system. That’s where employees can do a deep dive into particular categories. We’re not trying to make everyone an expert plumber or electrician, but we are trying to give them enough information to be able to give customers direction and help – if nothing else, to get them down to one or two options. Most customers have very simple and basic problems– they just want someone to be there, to be concerned, and to offer them some options.”

The RSR study revealed that the top-two operational challenges that retailers grapple with is that (1) customers can’t find what they’re looking for, and (2) that they can’t find help when the need it. Ron could relate to those challenges, especially since having expanded and redesigned the store layout (“everybody used to know where everything was!”, he explained). The Hilton Head Ace maintains a higher-than-average employee-to-customer ratio, and as Ron explained, this is an area where technology can really help. “We know when the busy times are; we know when to add more staff. We have a creative scheduling system that helps us make sure that we’re placing people in the store when the customer counts are highest.”

When it comes to using technologies in the store, The Hilton Head Ace Hardware store recently implemented Epicor’s Propello retail management system. Propello is a modern cloud-based and mobile-friendly platform that has many “built for Ace” capabilities, such as integrations to Ace Hardware’s corporate product information databases.

Ron is very upbeat about the system’s mobile capabilities: “it’s important to each and every person in the store. We have a strong special-order business. If somebody can’t find something, we push very hard for a special order. We gather all of our information from the Ace data bank with the mobile app to build a special order.” While the retailer still uses proprietary mobile techs for inventory management functions, the mobile app (which works on any cell phone) helps employees with product location and special ordering.

As to the future of tech-enabled retailing, Ron’s advice is to be aggressive – but not too aggressive. According to the store owner, before adopting new solutions it’s important to make sure that integrations with upstream systems (in this case, Ace corporate systems) are working seamlessly, and that new state-of-the-art store management systems can do all the things the “legacy” system did as a starting point. “We were an early adopter”, said Ron, “and we are muscling through and continue to see improvement. I can really see the ‘genius’ in the new system, but we have a little work to do.”

As for the future of SMB retail? Ron is very upbeat: “we have several 20-something employees, and they are so good at using the data provided by the system to anticipate customer needs”. Ron cited the ability to relate what a customer had been looking at on the website to that customer’s visit to the store. “That stuff is unbelievable!”, exclaimed Ron.

“Data will be the foundation of this business going forward – and it will be fun to watch us get there!”

[1] The benchmark study (sponsored by EPICOR), asked 262 SMB retailers to respond to an online survey. Sixty-six percent of respondents came from retailers with an annual revenue of $5M or less, with most of the remainder reporting annual sales of between $5-25M.