November 27, 2004

Small Businesses Thrive against WM

In retailing the myth is that Wal-Mart makes retail start-ups doomed. This is just not true.

Small businesses can find wonderfully productive niches by learning how be like the early mammals and dance under the feet of dinosaurs

That's Jeff Cornwall, who links to Anita Campell's analysis of a BusinessWeek article that examines the rise of small business. Anita insists:
As it turns out, news of their death at the hands of Wal-Mart was greatly exaggerated...

We could have told them. It's about "the experience, stupid." We've written about that here on Small Business Trends many times.

When buying necessities, consumers go for price. After all, how much pleasure can you get out of buying paper towels and laundry detergent?

But when it comes to other items, consumers want shopping to be an experience. They want the pleasurable sensory experience, fabulous selection and great service that comes from shopping at niche retailers. You can get low low prices at Wal-Mart, but it's not exactly big on atmosphere.

Her inspiration from BW:
Driving these changes in cyberspace, at shopping malls, and on Main Streets are consumers who want more than low prices and name brands. "We see Wal-Mart around for generations to come," says Candace Corlett, principal of consulting firm WSL Strategic Retail. "But we're seeing on a day-to-day basis a shift in consciousness that there are other choices, that it's not always about the lowest price."

Consumers want to be inspired and often desire products that can't be had at discount behemoths. Many retailers are using a strategy popularized by Target -- signing big-name fashion designers to create a special line. Swedish clothing chain H&M's fall lineup includes clothes by Karl Lagerfeld. In a similar vein, Bath & Body Works is selling $25 Henri Bendel scented candles.

Some things just aren't Wal-Mart's bag. Most sporting gear is better at stores that specialize in such products, says Irma Zandl, president of retail consultancy Zandl Group. She notes that young adults she has polled are looking to buy from, a snowboarding Web site. Hot Topic sells a comprehensive array of gifts featuring characters from the foul-mouthed animated hit South Park -- definitely not Wal-Mart's cup of tea.

Posted by Kevin on November, 27 2004 at 10:43 AM