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Small and Local Takes on Walmart in Claremont
By Katie Beth Ryan on Monday, June 1, 2009.
An economic pulse seems to be coming back to Claremont. Newly renovated mill buildings are expected to open up this month and a handful of new stores are attracting business. The popular wisdom is that the big box stores just outside of town have been sucking dollars away from the downtown shops. But new research out of Dartmouth suggests that small and local can survive and even thrive after the big boys come to town. NHPR correspondent Katie Beth Ryan has the story. Drive into Claremont on 103, Washington Street, and there lies nearly all the staples of big-box retail. The Wal-mart Supercenter, the K-Mart, the Big Lots draw customers from both sides of the Connecticut River. Drive into downtown and Claremont looks like it’s seen better days. Abandoned storefronts, homes and churches have dominated the streets for years. But signs of life are appearing. There’s a used bookstore, a women’s clothing store and a family-run pharmacy. (sneak in the sound of Green Acres) There’s also Green Acres, an upscale European-style market and café. Local Dave Van Inwagen was enjoying a panini and pink lemonade on a recent weekday morning. He believes that Green Acres has been able to thrive because it offers something you can’t find at the Wal-marts of the world. “It’s not that cookie-cutter kind of a store. It’s something that’s unique to Claremont and that’s what people want. They want something that’s unique and when they come here, they know they are getting something special.” And offering something special may be what helps small stores like Green Acres. That’s according to Kusum Ailawadi, a marketing professor at Dartmouth’s Tuck School of Business. Ailawadi and researchers the University of Michigan set out to determine Wal-Mart’s effects on other chain stores. They discovered that mass market retailers take the biggest his when Wal-Mart comes to town. Ailawadi also found that so-called mom-and-pop stores don’t have to be casualties of the retail giant. “Different people are willing to pay different prices for different things. They don’t want to pay a high price for nothing. But there are segments of people who are willing to pay a slightly higher price as long as they’re getting something of value in return—in the freshness of the products, in the variety of the products, in the service and experience of the store. That’s what the small guys can do and should do.” Most importantly, says Ailawadi, independent retailers will do best by offering products the mega stores don’t. That’s what John DeTore has discovered. He’s the owner of BoyKid Hobbies, the only hobby shop between Lebanon and Keene. The store carries parts to build everything from a minature 1965 Ford Mustang to model airplanes from World War II. One of his big draws is his Lionel trains The larger competition down the street doesn’t faze DeTore. He says his customers walk into the store for completely different reasons. “It’s because of the unique products. And it’s a friendlier environment. You come in and it’s not a quick go-get-what-you-want-ring-out-and-get-out. It’s a place to come and ask questions and have a conversation and learn a little bit about what you’re buying.” It’s customer service and, surprisingly, variety. “You can’t buy a particular train at a big box. Big box carries what the masses want. They carry one item and a lot of it, where I carry a little bit of everything, and a bigger variety.” DeTore says that when he first opened the store in 2004, there were just two other merchants on the street. Over the past five years, more retailers have begun shown up, and more are poised to arrive when two of the city’s former mills open in June. Claremont business development director, Nancy Merrill, said that the once-high vacancy rate is under control. And she adds that businesses that thrive in the city have tempered competition from chain stores. “For a number of small businesses that have survived the Wal-Mart effect here, you know, I think they’re businesses that really watch their business plan, month-to-month, see where their sales are going. Back at Green Acres, owners Al and Melanie Livingston pour over new dessert samples. Al Livingston says his store is a potential gold mine, because residents haven’t seen anything like it in Claremont for years. “We have the coffee, we have the espresso, we have wine that we sell at retail, we have imported beers. We’re doing the sandwiches, the panini sandwiches now. We’re tyring to provide everybody with a nice atmosphere to come to. What we wanted to do was to create an environment that was a destination, something that people would want to come to the downtown for, which was really absent for quite a long time.” And doing one better than Wal-Mart, barista Tristan Henderson not only greets every customer, he opens the door. For NHPR News, I’m Katie Beth Ryan in Claremont. comments
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Of course businesses that carry niche products do better against Wal-Mart than those stores that have major overlap. This has been going on for 30 years, since the University of Iowa studies of Ken Stone in the 1980s. The reality is that small boutique stores can survive, but they are marginal businesses jobs-wise compared to the Ames, Rich's, Bradlees and Caldors stores that died off in the 1990s. Big box stores have killed all the regional chains. A small boutique store can exist, but the real market share has migrated to Wal-Mart, the company that cheap Chinese goods and cheap labor made ubiquitous. I think this story misses what is really happening in the market place: Wal-Mart has proven it is the end of competition, not the beginning. When Claremont gets a locally-owner hardware store, pharmacy and grocery store---call me.