Survivor: Salem, Oregon
They are a tribe of survivors.
For over 50 years, Greenbaum’s Quilted Forest, Cooke Stationery, Jackson Jewelers, Les Newman’s, Saffron Supply Co., Olson Florist, Court Street Lunch and Whitlock’s Vacuum and Sewing Center have continued operating their businesses in downtown Salem, Ore. even as the big boxes and others have taken their best shot.
According to the Statesman Journal, the key to survival for all of these businesses has been a willingness to change to better serve customers.
For Greenbaum’s Quilted Forest, it meant “morphing from a department store to a fabric store to a quilting shop.”
For Cooke Stationery, it has meant making more sales calls to business accounts and counting less on walk-in business.
Jackson Jewelers has meant hiring technical experts and providing a level of service that chain stores and e-tailers can’t match.
Clearly, the ability to adapt will continue to be a requirement for these independents moving forward. Rising costs for employees and the competitive pressures of the marketplace are just two of the factors Salem’s independent retailers deal with on a daily basis.
“Everyone wants $50,000 a year plus retirement and benefits,” said Barbara Thommen, of Clyde’s Key, Lock & Safe Service, a family run business. “You just can’t do it. And customers right now are very price-conscious. We’re working hard for what we get.”
Moderator’s Comment: What lessons can other independents learn from the survivors in Salem, Oregon? Are there lessons learned elsewhere that would serve
the Salem independents well? –
George Anderson – Moderator
Small retailers, like those in Salem, survive not only through their own efforts, but by the efforts of their neighbors. The total impact is greater than the sum of the parts. If only one or two of these retailers had evolved their businesses, would they have succeeded? Probably not, since clusters of small businesses depend so much on each other to generate the traffic necessary for all to survive.
It’s logical to assume that the owners of these adjoining small businesses in a small city like Salem know each other well. I’d be surprised if they didn’t confer, work, and even promote with each other to combat WM, since the success of each is so dependent upon the others.
As an independent advertising agency owner, we often have this same discussion in relation to our publicly held competitors. There are pros and cons on each side of the scale. But independents do have the advantage of making decisions that are more consumer and client focused. They can try new things faster and change in a more responsive way to meet very specialized consumer needs. The economics will often be more fragile, but then again that’s not always the case either. Often, independents can charge more for certain things because of perceived value. There will always be the consumer desire to shop at the independent for personal attention and customization that the chains just don’t provide as well.
It’s all about finding a niche, being a little flexible about what it might be, but sticking to some core strength and servicing customers. In short, my personal recipe for retail success.
While it’s true that independents usually have the ability to act more quickly than large chain stores, they still are being faced with very difficult choices and decisions. I am very impressed with this group of independents for having the foresight and courage to recognize these things and implement them. This certainly proves that it can be done, but it doesn’t sound like it is for the faint of heart. Don’t forget that these independents don’t have the margin of error or risk tolerance that their chain competitors do. If they make a bad decision, it’s all over. Most chain stores, if they make a bad decision in an individual market or store, it would cause a local management change or a single store closing, but have little effect on the entire chain.
What lesson can other independents learn from the Salem, OR retailers? I submit that nothing in the marketplace – or in life – is as exhilarating to a retailer as to be shot at by a huge howitzer without a killing result. But after enjoying that exhilaration, there comes a whiff of sobriety that reminds us that there’s a financial divide between surviving and thriving.
Apologies for hitting the poll button too soon – consider me a voter for the “depends on the retailer” answer, not the “competitive advantage” choice. But the stores mentioned in the study do have a great deal in common.
Barbara Thommen’s comment gives a big clue – “we’re working hard for what we get”. Having family and employee commitment must be a key factor. Not to mention employees actually seeing owner/family commitment.
Greg Syverson keeps an eye on trends and getting in then out first, not trying to compete when bigger stores hop aboard and probably start cutting prices. His customer, Brian Hayward, has been coming back for 10 years to get the brand and quality that he needs.
Ralph Jackson offers expertise and service after the sale even though the brands he sells are well known and probably readily available (cheaper, even) elsewhere.
Customers seeing and entering stores that have been around for a long time have got to at least wonder why. Once they start finding out the answers, I think there is a pretty good chance they might buy. And once they buy, and start to chat with the people in the store, staff as well as customers, this is where the seeds of real loyalty might actually be planted. A sense of inclusion and community in something that is long established and successful engenders a desire to belong and to participate. There is also a sense of community in having a wide range of similarly aged stores all in the downtown area. How many chain stores offer a similar experience or even begin to compete in these terms?
I think this is a great example of the strength of being an independent retailer in any category — the ability to change and change quickly. The consumer, while price sensitive, is also overwhelmed with choices and, with those choices, a lack of interaction. Price can easily be offset with service. The lifeblood of all independents is access to and the relationship with their local base of business. There are many great independents that serve a critical role in the everyday lives of their customers that have no relationship to the price of goods. The cost of poor service has much more damaging impact.