|
|
|
Redefining the Rules of the Game
How can independent retailers compete against the superstore giants? On their own terms
|
Business New Haven
11/6/1995
By: BNH
|
With the exodus of department stores and chain retailers to outlying malls and suburban strip centers, Connecticut's urban landscape is increasingly characterized by smaller, independent retailers doing their best to hold on against the tide. How do they do it, and can they survive over the long haul? We asked three who have weathered retail changes for decades: Frank Backer of Backer's Inc., which has sold fine men's clothing in downtown New Haven for 62 years; J. Dart Messick of Kennedy & Perkins, opticians with a half-century of eyewear retailing; and Charles Negaro, founder of the enduringly successful Atticus Bookstore Café. We spoke the last week of October in BNH's offices.
Is the superstore trend irreversible, or merely a swing of the pendulum?
Messick: I don't see that changing. There are a lot of people out in the marketplace who like to look for the best deal they can get. If you can get the best price at a Home Depot or a Price Club, that's where you'll go. Now Caldor and Bradlees, places like that, are actually suffering from the super superstores, especially Wal-Mart and Super K mart. And Caldor and Bradlees we're used to thinking of as big players.
Negaro: I grew up in my father's fruit-and-vegetable stand in Waterbury. When I was about 15 we had [supermarkets] like First National and A&P, and then there were these little mom-and-pop shops like my father's, trying to be grocery stores. Now, it's not a question of big or small; all sorts of people are going to come and go. You're seeing it with the Caldors and Bradlees: They were the first “super stores.” They didn't call them that, but they were sure super to me five years ago. Now, there are bigger stores coming. But there are also smaller stores coming, people like Romeo & Joe's [on New Haven's Orange Street], and now another level of supermarket, sort of a 15,000- to 20,000-square-foot like Nature's Foods or people like that down in Greenwich. The superstore bookstores are here to stay, and they're chopping a big chunk out of the book business, but there are also little specialty bookstores coming up underneath them that will survive and do well.
Frank, what do you see?
Backer: We've been in New Haven for 62 years; my dad started the business. Now, they're opening a lot of these discount stores and people run there looking for bargains, and they end up coming back to us because they don't get the service [there] that we offer. he way we survive is by offering tailoring and personalized service.
What is the 'superstore' equivalent in the clothing business?
Backer: It's not a superstore; it's a department store like Filene's. They promote constantly, they're always running sales - the public today is always looking for a sale, unfortunately. It's the specialty store, however, that's going to remain in business, because the public still wants the service that they can't get in these other stores.
Can service really compete against price? Can larger stores provide good service, too?
Backer: They can, but they don't.
Messick: To me, the population is a big pie. Of that pie, you take the chunk that you want to focus on. A mass-marketer like Wal-Mart is focusing on very, very low margins but huge volumes, and they make their money that way. If I'm going to buy a big box of Tide, why not buy it at Price Club for $2 less than I can get it at my local grocery store? If I'm there already, I do it. It's Tide vs. Tide. But if you're talking clothing, food, books, you're going to want to go to someone knowledgeable who's selling it. With us, no one wants to mess around with your eyewear and your vision, so we have a real opportunity to offer proper service and selection and quality merchandise. So if you do it correctly, you're going to have a really loyal clientele. A lot of frame companies we deal with wouldn't think of selling to a huge merchandiser.
Negaro: I wanted to respond to how this trend has come about. The trend is much broader than just [the advent of] superstores. In the book business, the trend is the result of there being a broader demand for a broader product. Thirty years ago, a bookstore that handled 10,000 titles could service maybe 80 percent of the population. A bookstore with 10,000 titles today, as a result of there being more [books] in print and more people with more diverse interests, simply can't satisfy the demand. It's not just in books: In toys, there's a lot more stuff being bought as toys. In entertainment, with videos, CDs, music, the spectrum of merchandise that's out there is much broader. So it makes for a natural trend toward a bigger store. It's happened in the food business: There used to be these little gourmet speciality stores; now supermarkets have gourmet sections, ethnic-foods sections, because there's a big demand for it. And, now a population that wants eight or ten different kinds of foods that used to be in eight or ten different places now goes to one place, because nobody has time to go bopping around from shop to shop.
If I were to ask you why I should shop at Atticus instead of Barnes & Noble, is the answer because you have more specialty titles?
Negaro: No. We cannot compete with Barnes & Noble on the inventory level. There's no way 25,000 titles can compete with 100,000 titles. We compete with Barnes & Noble in a number of ways. One is by making a better connection with our customers. The honest way we compete is by our location: We have a certain kind of location that makes it work - a downtown, academic, tourist, pedestrian place. The second thing we do is to make it the kind of place that makes a much better connection with the people there. The café idea that Barnes & Noble has picked up on now, is something we've done since 1981. That's part of making it more of a people place. It also turns out to be more of a profit center than books, at this point.
If location is so important, is the change in where people shop really driving the kind of stores we have?
Negaro: People's shopping patterns have changed completely.
But could you make a go of stores like yours in a mall or strip-mall environment, as opposed to downtown?
Backer: The average retailer today cannot afford to go into these shopping malls and pay those kind of rents. The only [stores] you have in there are chains. They can afford it. That's why we've had to stay downtown. I've been here all these years. I could have gone into malls - they offered me deals to get in originally [at the] Connecticut Post Mall when they first opened up. But I couldn't exist there; I couldn't compete with these other stores.
Messick: We've been in business for 50 years now and we have five locations, some in strip centers - we don't have any in covered malls - but I think there's something to be gained by being in a strip center: you have bodies, you have a population. But we also have our downtown [New Haven] location, which is our biggest store. But the locations of the huge centers - the Wal-Marts, the Price Clubs - they're easy for customers, if you want that sort of shopping environment, to go to Home Depot, then walk over to Price Club. Some would rather go to Westport and go on the main drag and go into Barney's and Banana Republic. It depends on their economic level and how they like to shop.
So, what does it take to make it
0in a downtown environment - not necessarily New Haven.
Backer: It's hard. You take Fayva, one of the largest shoe retailers in the area, they're trying to close 400 stores. They're closing the one here [at 89 Church Street]. They're in trouble. The downtown areas are tough. You speak to the average person, and they don't want to come downtown. They're afraid to. There are worse things happening in the malls than in downtown New Haven, and but you talk to people who haven't been downtown in years. Fortunately, we have a following, and that following comes to us because they want the merchandise that we carry. They can't get it any place else, unless they go to Westport or Greenwich. But the public does not want to come downtown.
Negaro: That resistance to coming downtown is not universal across the country. Downtown Portland, Ore. is very exciting. Independents are really flourishing out there and in California. One of the things independents can do is to act as incubators for the chains. In our industry, the café thing was an independent idea going back to about 1975; now all the major chains have cafés in their superstores.
What's the quality of retailers
you see, and what kind of businessperson is most apt to succeed in retail?
Negaro: The kinds of retailers you see around here are very much struggling people, and a lot of good people have been washed out. I do not have a sense of a lot of new, young people pushing up into the marketplace. That's a function of the economy not having much growth potential.
Messick: The person that's running a retail store and really wants it to work is going to be really good at it. They're going to be sophisticated in marketing, know all about advertising, they're going to hire and train a staff that's really on the ball. Your staff is the key: If you don't have a staff that smiles and greets customers properly and knows what they're selling, you're done for. Period.
If the superstore trend is driven by consumers placing a higher premium on price, will that trend simply become more pronounced, or swing back toward placing a greater premium on service?
Negaro: I think consumers are always going to be looking for value. But value comes in different shapes and sizes. It's the educated consumer out there that's getting more educated and wants more value.
Messick: I used to be pretty nonchalant about going into a restaurant or a retail sales environment and not really care that much about what that [salesperson] was telling me, until I got into retailing and began to realize how nice it was to take care of a customer properly and know what I'm talking about. So if I go to places now and the person on the other side of that counter doesn't know what they're talking about, it drives me crazy. It's even hard these days to find someone who smiles and greets me properly.
Backer: Unless you go into a specialty store like yours or mine. They come to me, they know the salesmen are all knowledgeable, they've been with many years, and the customer comes in because he wants to see the salesman.
You have one advantage: Not too many people go around bragging that they bought a suit at K mart.
Backer: But how many times do we get customers who go out to discount places that will not alter the garment for them, and then they have the nerve to call us up and say, 'I didn't buy it at your place but I like your tailoring - can I bring it in?' I say no.
You're all in downtown New Haven, and clearly the city doesn't have enough retail. What would it take to attract or even retain the highest-quality retailers here?
Backer: Look what you had here - a Macy's, a Malley's - they're gone - and a mall that's now dead. There was an article in the Yale Daily News two weeks ago that said they want to throw down the mall and make dorms for Yale. How's that going to bring business to us? We need more merchants to come into New Haven. And so far, it doesn't seem to be happening.
So, what would attract them?
Backer: To be honest with you, nothing.
Messick: This is an ongoing problem for the chamber of commerce, city government and a lot of people in New Haven. How do you attract retail? Security is a real issue, for people coming into town and feeling safe. And that's been a problem in New Haven. Parking, traffic flow, being able to get in and out of the city, is important. Plus, there's got to be more positive talk about good things going on in New Haven. For every good thing that happens in New Haven, there's four bad ones reported in the media. There's got to be an effort to report the positive side of downtown. And then you've got to educate the kids as well as you possibly can so they can have other things in their lives that will get them off the streets and into working at jobs that they like.
Negaro: I think Joel Schiavone, for all his ups and downs, has shown that there's an approach where you take a small segment [of downtown] and make it work. It works by promoting small retailers; it works by attracting residents, because you need the feet around. The most effective thing that could be done is to take another block and do the same thing, and then another block.
Backer: Our whole area's dead, to be honest with you. We're in the worst area of New Haven. Charlie, you are in a nice area up there - there's traffic, there's Yale. They've put money into the Gap; they're doing business there...
Negaro: They're doing business, but they're not happy.
Backer: But at least they're doing some business. But look at that whole street - everybody's leaving. Michaels Jewelers went out; Sykes Libby moved out...you're losing more people, unfortunately, in New Haven.
Twenty years ago, that corner of Chapel and Temple would have been considered the prime retail corner in the entire city.
Negaro: I think Temple has bottomed out so much it's coming back. Somebody's renovating two or three buildings down there. Do any of you feel that if Yale were the developer of that hotel that we'd be in stronger position today than under the present circumstances?
Perhaps.
Negaro: Two years ago there were these two proposals on the table, and the city rejected their partner and biggest land-owner [Yale University] and picked somebody who's not doing anything. [Editor's note: See related story, page 3.]
Backer: Originally, when the Park Plaza was built, they'd have a lot of conventions. And [attendees] would see our merchandise in the window and come into the store. I have no feeling for when [Cordish] gets through building the hotel, whether it will bring people to New Haven or not.
Well, we can all cross our fingers, at least.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
