In retail there are few secrets. Ninety percent of what we do and who we are is obvious to customers and competitors alike. Success will be copied, try as you may to prevent it.

Some retailers succeed by copying more innovative competitors, while others succeed through their own continuous innovation, but most employ some combination of idea creation and idea borrowing. It’s important to stay aware of one’s competition, but dangerous to become obsessed.  A friend often says that when you focus on the competition, the best you can do is achieve parity, but if you focus on customers instead, you are far more likely to innovate and move ahead of the competition.

Creative retailers have the edge, presuming they can market their innovations well enough to capitalize on the product life cycle and benefit from an idea when it is most profitable. Strategic innovators always have a new product entering the product/profit life cycle just as a previous product begins its competitive decline. By product I also refer to services or, in come cases, novel applications or promotions for mature products. Arm and Hammer Baking Soda and WD-40, for example, keep discovering and publicizing new uses for their decades-old products.

Baking soda and WD-40 are important examples, because customers and coworkers generously offer most of the new ideas. Small businesses may feel a disadvantage because they do not have inventive marketing departments or high-priced focus group consultants, but they possess something far more valuable: direct access to customers.

If you want your retail business to stay original and successful, make sure you talk to customers every day. Find out what needs and desires are not being met, and what people are willing to pay for them. Use customer language in your signs, ads, and other marketing materials. When your business is large enough, make sure you also talk every day to the coworkers who serve customers.  And of course, by “talk” I mean ask questions and shut up while they answer.

Entrepreneurs have to fight their natural self-confidence to create a company culture that supports innovation, because self-confidence sometimes turns into arrogance. Resist!  Resist micromanaging and excessive policy writing! Resist the impulse to ignore criticism.  When it’s your money on the line, you want to hear all the dirt. After all, which would you rather have, a big ego or a big checkbook?