Independent Has No Fear of Competition

Discussion
Jul 20, 2005
George Anderson

By George Anderson

In his 1933 inaugural speech, Franklin D. Roosevelt addressed the psychological aspects of the Great Depression head on. “Let me assert my firm belief that the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

For many independent retailers, the news that a big box competitor is moving into their territory is enough to cause another type of depression and, for many, that has brought on a paralysis that ends with ‘Going Out of Business” signs posted on store windows.

Adam Nappi, owner of the 3,000 square-foot Bow Street Market in Freeport, Maine, was determined not to become another casualty in the battle against large chain stores.

Mr. Nappi hired a grocery industry consultant to find out what his customers — especially the best ones — liked about Bow Street Market so that he could build his business on those strengths.

“I started to learn that the true assets of Bow Street Market are our people,” he said. “It’s all about people.”

According to a report on the MaineToday.com Web site, “Bow Street Market overhauled its job descriptions, reorganized staff, created new leadership positions, undertook professional development training that continues today, scheduled each shift with leadership trained in customer service skills, and focused on hiring candidates with people skills versus experience in specific functions.”

“If you can develop people to be leaders in customer service work, you are setting yourself up for some quantum leaps,” said Mr. Nappi.

“We are growing and we expect to continue to differentiate ourselves in the marketplace as we move from our core group, expanding the customer service training to our other staff,” he added.

The research conducted for Bow Street Market also provided additional learning for Mr. Nappi and his staff. Saying the research “confirmed what we already knew”, Mr. Nappi said his business is “not a grocery store where people do a once a week shop; we’re a market that people visit daily.”

“People aren’t coming here for a selection of 40 different types of paper towels,” he said, “so we reduced the varieties of paper towels and added the kinds of things that daily shoppers wanted – the rotisserie chicken, home-made deli items and the bottle of wine.”

To date, Bow Street’s approach appears to be working. Sales at the store have actually increased in the 14 months since the big box opened for business.

Future success, said Mr. Nappi, comes down to refusing to stand pat. “It’s all about people and as our customers change, we have to lead or keep pace with that change,” he said.

Moderator’s Comment: Do you believe that owners and executives of retail businesses have psyched themselves out of being successful in the face of competition?
What are the lessons of the Bow Street Market experience?

George Anderson – Moderator

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10 Comments on "Independent Has No Fear of Competition"


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Don Delzell
Guest
Don Delzell
15 years 7 months ago

The premise for this discussion is outstanding. The absolute fact independent operators can focus on is that big box operators, national chains or other large scale operations cannot by definition meet the needs of fringe pockets within the population.

Behemoth competitors, be it in mass merchandise, electronics or apparel, cannot meet all the needs of all the people. If they try, they move away from their core. Despite the physical size, there really are limitations on total merchandise offerings and on inventory.

Study what niches are left open, or poorly served. There is no shame in being small. I have a client who competes against two giants that account for over 80% of the market. The client is small, and yet extremely profitable. They identify niches where the giants do not serve the customer well.

Independent retailers must do the same thing. You cannot defeat giants on their own turf. Change the game.

Mark Lilien
Guest
15 years 7 months ago

Mr. Nappi and some of the people who attend industry shows are often the exceptions. The majority find it hard to change.

There will always be entrepreneurs who thrive despite the big-box or other competition. But many people who are independent businesspeople are not innovative entrepreneurs. And it often takes extra funds to implement change, but people delay and delay until so much time has passed that the funds and/or time might no longer be available.

The best time to beat the big-box is before it is built.

Ian Percy
Guest
15 years 7 months ago

What we experience in our lives begins in how we think. I am so tired of retailers moaning and groaning about how they’re being ‘done in’ by the giants. Guess what…if you keep rehearsing what being ‘done in’ looks and feels like, the universe thinks that’s what you want and gives it to you. Why do so many people want to live out their fear instead of their dream?

Fortunately, as Charlie says, there are still people out there with big positive imaginative dreams. They know the challenge is to create experiences customers get nowhere else. They know the secret of success against giants is to find the weakness inherent in their strength. And most important of all is unshakeable belief that if you have a well defined purpose to make the world a better place, the world cooperates to make it so.

Jim Lukens
Guest
Jim Lukens
15 years 7 months ago
Our experience has shown that many retailers are in two frames of mind when sizing up their competitive stance with new, usually larger competitors. One group contains those that quickly surmise that they have no chance to compete and focus all their energy on making subtle changes to their existing format – changes that rarely make a difference to consumers who now have a larger, cleaner and usually more exciting place to shop at the new store in town. The second group are those, like the gentleman in Maine, who step back for a moment and decide to focus their energy on all the opportunity areas that the new competitor can not or will not promote. Ironically the margin mix opportunities are far better than opportunities prior to the new store opening. Focus shifts from “maximum variety at the lowest price” to “variety my customers are seeking at a fair price.” All this is easier said than done. Changing the merchandising approach is difficult unless the store owner is truly committed. The revelation that customers… Read more »
Tom Zatina
Guest
Tom Zatina
15 years 7 months ago

Being a successful Independent means offering something really special to your customers – something that goes beyond the “commodity” offerings of the chains. And, ideally, something that goes beyond just convenience.

Mr. Nappi sets out to be very good at what he does and it sounds like he may be better than others on many things. His store, obviously, is not the only choice for everyone all of the time. But, if he continues to get it right, it will be the better choice for everyone much of the time.

I like the prospects for operators like Mr. Nappi.

David Livingston
Guest
15 years 7 months ago

Good retailers were good long before the big box retailers came along and bad retailers were already bad. The big box just nudged the bad retailers into going out of business a little bit sooner than they wanted. Good retailers can’t be “psyched out.” I have several clients who I consider good retailers. They used big box retailers as a tool to help rid themselves of weak competition and as a shield to keep new competition from coming in. Bad retailers get psyched out and will blame the big box stores for their demise.

Ryan Mathews
Guest
15 years 7 months ago

Are you kidding? Today’s independents have psyched themselves into believing (and in most cases proving) they can’t be beaten. It’s not the Bow Streets of the world that need to worry, it’s the plain vanilla chains.

Charlie Moro
Guest
Charlie Moro
15 years 7 months ago

If you get a chance to attend any National Grocers Association event you will get to see the imagination, energy and enthusiasm that is very much alive and moving forward in the independent grocery world.

Robert Craycraft
Guest
Robert Craycraft
15 years 7 months ago

Independent retailers have nothing to fear from a “big box competitor.” A good example is the iconic Frager’s Hardware on Pennsylvania Avenue in Washington, DC. When faced with a Home Depot opening in our city, Frager’s expanded their hours, got their often-aloof staff smiling, and expanded their selection. They seem busier than ever and I know that I, personally, have at least doubled my spending at Frager’s while only buying items at our new Home Depot that I would have been driving into the VA and MD suburbs for. A win-win.

Ed Dennis
Guest
Ed Dennis
15 years 7 months ago

All great retailers began as independents! The problem has always been “how to get a paid employee to act like a motivated, intelligent owner.” The independent who has no fear of competition, however, is a bit of a fool! The most certain road to failure is not fearing competition. This fear or respect of competitors will force a good retailer to think outside of the box and find ways to differentiate their business. Personally, I don’t see enough…

“No affinity card required to shop here”
“5 minute checkout guaranteed”
“free bag with every purchase”
“Our sales prices are applied equally to every customer”
“Go shop at __________ if you have a few hours to kill”
“Our fresh seafood is fresh – their fresh seafood was frozen!”

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