Journal Gazette and Times-Courier, IL
02/10/06
Big Box Store expert: Embrace change for
staying competitive
By HERB MEEKER, Staff Writer
MATTOON -- Ken Stone is not just another expert on Big Box Stores and their
economic impact on smaller towns.
The retired Iowa State University economics professor and native of Ste.
Marie is an internationally recognized expert on the subject. Researchers and
journalists regularly ask him about Wal-Mart and other retail giants. He travels
the country each year giving seminars on the real-world facts he has gathered on
retailing in the country for more than 10 years.
The message he shared Wednesday night was simple for about 50 people
during a seminar co-sponsored by the Mattoon Journal Gazette/Charleston
Times-Courier newspapers and the Mattoon and Charleston chambers of
commerce: retailers of any size in any town can still compete with giant retailers
if they are willing to change and do their homework on pricing and customer
service.
Stone explained why retailers like Wal-Mart can meet consumer demand so
efficiently. It starts at the price scanner at each checkout station.
“Everything crossing that scanner is transmitted up to a satellite and then
transferred down to the corporate headquarters in Arkansas,” said Stone. “That
way they know what is happening at every store. They know what pallets of
merchandise are needed at each store. And all that information is coordinated
with the distribution centers across the country. They are sending items to the
right trucks on time every day.”
Stone explained there are two types of impact of Big Box Stores on host towns:
one bad and one good. Unfortunately, the general public usually concentrates on
the bad impact, he said, making the Big Boxes appear invincible.
-- Local businesses selling the same merchandise as the big box store will
probably lose sales unless they reposition themselves.
-- Local businesses selling something different are in good luck and will probably
experience an increase in sales because of the “spillover” effect of the additional
retail traffic.
He noted when a Wal-Mart Supercenter opened in Ames, Iowa, where Stone
lived, there were two bicycle shops in operation. One offered discount bike
brands similar to Wal-Mart, and that shop closed after a short time. But
something different happened with the other shop.
“The owner decided to offer more upscale bicycles of $500 or more. He changed
his product line and did very well. That’s how he reacted and he did well,” Stone
said.
He called this an “attitude check” where smaller retailers work to co-exist in a
mass merchandise environment by changing their mode of operation.
“Stand back and look at the big picture,” Stone told the audience in an auditorium
at Arland D. Williams Elementary School. “Have you ever stopped and wondered
why people shop at your business? Determine your strengths and weaknesses
and go from there.”
He offered several other tips for smaller businesses that amount to “getting back
to basics on doing good business.”
-- Focus advertising; stress competitive advantages like your experienced staff or
wide delivery area.
-- Offer more convenient hours -- possibly twice nightly per week -- to customers
because 9-5 six days per week do not cater to shopping for most families in small
towns today.
-- Handle angry customers with LEAR (Listen, Empathize, Ask questions and
Resolve the problem).
For more information and data on this subject, e-mail Stone at
kstone@iastate.edu.