Good service keeps indie retailers in the game
When people line up at a coffee shop for their morning brew or crowd a bookstore to meet a famous author, don't assume they're patronizing a national chain.
Many independent stores have been able to survive, thrive and even launch in spite of competition from big box retailers like Wal-Mart, Barnes & Noble and Home Depot. Indies are doing this by becoming more a part of the fabric in the communities they serve, offering more personalized service and unique ambience than the bigger guys.
For instance, at FoxTale Book Shoppe in Woodstock, Georgia, the strategy is building relationships with customers and the community. The staff spends time chatting with customers about books, knows customers' tastes and recommends books.
It also holds writing classes and events like parties for authors, especially those who live in the Atlanta area. While many bookstores hold meet-the-author events, FoxTale periodically rents a theater across the street, turning it into a bigger event.
The store also has an eclectic look. It is decorated with antiques and a bicycle suspended from the ceiling in the children's room. It's intimate; at 1,500 square feet, it's less than a tenth the size of a nearby Barnes & Noble.
As a result of its small-bookstore feel and personalized services, sales at FoxTale have increased between 15 percent and 25 percent a year since it opened in 2007 — despite Barnes & Noble's proximity, co-owner Ellen Ward says.
"We aren't so much selling the book as we are selling the experience," she says.
The success of indies is something perhaps experts couldn't imagine a few decades ago. In the 1980s, when big box stores began proliferating, and after Amazon.com went online in the 1990s, independents began disappearing. The Census Bureau counted nearly 990,000 retail establishments with under 20 employees in 1992 and just 608,000 in 2013.
In some areas, soaring rents accelerated the trend. Economics professor Carlena Cochi Ficano of Hartwick College in New York estimated in 2012 that on average, between 4.4 and 14.2 retailers closed within 15 months of a Wal-Mart store opening nearby. Meanwhile, at most, an average of 3.5 small retailers opened during that time.
But in recent years, shoppers have veered away from big box retailers, and many stores have closed. Indie bookstores have benefited from the demise of Borders' 640 stores and the closing of more than 150 stores owned by Barnes & Nobles in recent years. There were 2,227 independent U.S. bookstores last year, up from 1,651 in 2009, says the American Booksellers Association, a trade group.
And there may be more opportunities for indies: Published reports have said Sports Authority, which has been struggling to make its debt payments, may close 200 of its 450 stores
Indie retailers that survive are able to provide a personal touch that a big box retailer cannot because they must comply with corporate procedures, can't offer says Edward Fox, a marketing professor at Southern Methodist University. For example, a shopper might look for a dress at a department store, not find anything suitable and hear from a staffer, "that's all we have."
"A boutique owner might say, 'I know a place where I can get it, or I have a vendor who can get you something,'" Fox says.
Personalized service is critical to Kiddles Sport's longevity. The Lake Forest, Illinois, sporting goods retailer, which has been in Aric Shlifka's family for nearly 50 years, doesn't have room for as many different baseball gloves, athletic shoes and other items as stores like Dick's or Sports Authority.
So as its competition grew, it began selling custom merchandise like uniforms for local teams. It also began providing services like analyzing customers' gait to be sure they bought the right shoe for the activity they planned to engage in. Because Kiddles is well-known in Lake Forest and nearby communities, podiatrists and physical therapists recommend patients buy shoes at the store.
"People trust us to help them choose the right bike or shoe," says Shlifka, who adds that the services his store provides have helped revenue increase between 2 percent and 4 percent annually in recent years.