Advice for Mom-and-Pop Shops: You’d Better Be Special

By Features FOXBusiness

Believe it or not, amid the plethora of Starbucks, Dunkin’ Donuts, Wal-Mart, Babies R Us and Barnes & Noble stores popping up everywhere these days, they do have some competition: mom-and-pop shops.

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So what’s the secret to the success of mom-and-pops? Many utilize their own recipes of personal customer service, community involvement and other tools that keep customers coming back.

“The most important thing is that you have to bring a unique entrepreneurial vision to what your store is. It can’t just be ‘Me, too’ – it can’t just be someplace where you can get the same thing,” said Robert Spector, a Seattle-based retail writer. He wrote his latest book, “The Mom & Pop Store: How the Unsung Heroes of the American Economy are Surviving and Thriving,” after traveling the country from 2007 to 2008 and interviewing hometown owners and workers at butcher shops, meat markets, hardware stores, and more in Anytown, USA.

Spector points to the New London Pharmacy in New York City as a prime example of how a mom-and-pop shop can not only survive, but also thrive. In business since 1960 and located on 8th Avenue between 22nd and 23rd streets, Spector said New London’s owner stays competitive with surrounding big chains like CVS, Duane Reade and the like by bringing in beauty and nutritional product vendors to talk to customers and constantly looking for unique products not widely distributed by her bigger competitors. She also has a nutritionist on staff.

“When you go to her store, you’re going to get something different,” Spector said. “If you’re going to be a specialty retailer, you’d better be special.”

Bill Allen is a counselor at the Orlando, Fla., chapter of SCORE, a nonprofit, all-volunteer organization partially funded by the Small Business Administration that refers to itself as “counselors to America’s small business.”

Many U.S. entrepreneurs turn to SCORE for advice on how to compete against “the Box.”
SCORE suggests you focus on two fundamentals. First, understand who your customers are in relation to the chain stores. Secondly, understand why customers would choose your name over a chain name. For example, Babies R Us execs expect customers to choose its brand over a smaller kids-toy shop because of brand recognition and trust – and lower prices.

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“Those are not necessarily the reasons someone would or should choose an independent small business,” Allen said. “They [small business] need to figure those reasons out and build on those strengths and make sure they’re fulfilling that when the customer comes into the store.”

A recent study found a substantial negative impact of big-box entry and growth on employment growth at single independent and smaller chain stores -- but only if the big-box activity is in the immediate area and in the same detailed industry. That adverse impact tends to be the worst if the big-box is located within one to five miles of the smaller competitor, as opposed to five to 10 miles of the store in question.

To combat this, many experts advise small businesses to get involved with the community and get their name out there. Customers may patronize the mom-and-pop for reasons of convenience, or because they know the owner of the store, or they want a more personal shopping experience with a knowledgeable specialist. Most people know they may have to pay slightly more for a product at a mom-and-pop than a big-box store, but you can make it worth the extra cost by offering better service.

“They might believe they’re going to get more time from an expert so be sure you’re going to be perceived as an expert in your field,” Allen said. “If they were looking for items strictly based on price, the chances are, they would have gone to the big-box retailer, even if it’s a slightly longer trip. … you’re never going to out-buy them … you have to make it up on the sale side but you have to be fair.”

Thomas Robinson knows all about the ins-and-outs of working for a big box, and what it’s like to go small.

Robinson worked as community relations manager for Barnes&Noble in Bakersfield, Calif., for almost seven years. He organized community events and fundraisers, book clubs, art displays in the store featuring local artists, poetry readings and other functions to raise the visibility of B&N in the area. But, he said, after seeing a number of district managers come and go, less attention paid to community efforts, and an increased focus on “sales, sales, sales,” he became disgruntled. Even more so after the economy hit the fan.

“Corporate thinking is not ‘Let’s ride this out and do what you can.’ It’s ‘There’s money somewhere – find it,’” Robinson said. “It was really tight [and] the pressure did not lift … I just thought, ‘You know, this is not what I signed up for.’”

So, Robinson started looking for other career opportunities, which led him to Russo’s Books, a small, family-owned and operated local store in business since 1989. At B&N, Robinson had essentially been Russo’s rival, and he said many clients ended up following him for many of the same reasons that led him there in the first place.

More pluses to his big job switch: increased job satisfaction and the ability to bring the store owner with him to events.

“I never brought the owner of Barnes & Noble with me – it’s just not going to happen,” Robinson said with a chuckle.

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