Donn wrote:Say you sell shoes, in a small town that's lucky to have a shoe store.
No town is "lucky" to have a shoe store. The shoe store is lucky to have a town full of customers. And in a town small enough for this to be the only shoe option, those customers are likely to be loyal.
But since you brought up the issue of shoes, let's work it. I wear size 15. Needless to say, I rarely find shoes in my size actually on the shelf in a shoe store, and I don't even bother looking at Wal-Mart. When I lived in Texas, the only place I could consistently find quality shoes was at Larry's Shoes (I don't even know if it still exists, but if it doesn't, it isn't because of Wal-Mart). Here in Virginia, I have to be very lucky to find shoes in my size. Where do I shop for them? At the outlet mall, the new mall experience for rural areas along major highways. When I go to the local shoe stores, they NEVER have ANYTHING in my size--just like Wal-Mart. They always offer to order them for me, but if I'm going to order them anyway, I'll do it online and not pay a retail premium to get what's not even as good as mailorder service.
The point is that if a shoe store can't compete with Wal-Mart on price or convenience, then they need to compete on service, quality, and selection. And they need to do what it takes to keep their customers.
Let's turn it a different way. We have a Costco in our town. Costco is one of those companies that has a good reputation for taking care of its customers and employees. I'm sure they have put locally owned stores out of business, too, but they never seem to get beat up about it. So, it's okay to put local stores out of business if you are really nice to your employees, but not if you are a little less nice.
Or Home Depot. Many good local hardware stores have been put under by Home Depot. But not all. Those that maintain their customer base by doing what it takes to stock stuff they need (even when Home Depot doesn't) are still surviving, by my observation. The ones that have failed were the ones that never seemed to have what I needed, just as Home Depot never seems to have what I need.
Or auto parts stores. Has Autozone put local parts stores out of business? If so, it's because the local parts store didn't understand the service model. Todd could expand on this a bunch, I'm sure, but my observation is that the locally owned parts stores (I'm not really including NAPA stores here, even though they are locally owned) are never open as late or one weekends, and are no more likely to know their parts or have what I need. The parts stores that supply commercial repair shops have taken car of their customers, and Autozone/Advance Auto haven't done them much harm. But they serve a different clientele than the chain retailers. Those that attempted to serve the late-night do-it-yourselfer haven't been well-served by the commercial parts stores that close while they are still at work.
Now, let's talk about men's clothes. Did the Men's Wearhouse put local haberdashers out of business? The ones I saw go under had it coming. Their prices were high and inflexible, their selection (ahem) tailored too much to the owner's tastes (and not to mine) and their hours too inconvenient. Many complained loudly to their local politicians when MW opened up locally, instead of realizing that their customers had needs they were not fulfilling. The market is pretty efficient about weeding out those who don't earn their trade. It's not particularly nice about it, to be sure. But it keeps us from being put in the position of being forced to support local business that don't do what it takes to keep our business, either in price, convenience, quality, or service.
Customers are always changing, and businesses must always change with them. The notion that locally owned shops, as much as I might prefer them for some things, are owed their existence is hostile to the consumer. And that's exactly backwards. So, we keep a Wal-Mart or a Home Depot out of our town in favor of the local shops that don't have as good a selection, aren't open when we need them to be, and charge a lot more? Is that a good result?
Rick "believing that business is not a charity" Denney