THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, May 29, 1995 TAG: 9505270326
SECTION: BUSINESS WEEKLY PAGE: 10 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Long : 215 lines
Robbie Cooke's hardware store in Chesapeake is near two warring industry giants: HQ Home Quarters Warehouse and Lowe's.
But don't make comparisons; this man doesn't like being portrayed as the poor little business sobbing its heart out after the giants moved in.
Instead, he sees it this way: Good operations survive long after the superstores move in. It's the badly run businesses that don't adapt to the times that may hurt.
``I hate the doom and gloom thing,'' says Cooke. ``You can't take a sour-grapes attitude. This is the American marketplace. Everyone has a right to be as big as one can get.''
The mammoth companies - his not-so-neighborly neighbors - are only the latest challenge. There will be different types of competitors in the future, and Cooke says it's his job to keep up with the times.
Adapting to the churning market has become increasingly important as a wave of superstores move into Hampton Roads. In the home improvement industry, Virginia Beach-based HQ recently locked horns with a re-energized Lowe's. Discounter Target will soon join Wal-Mart, Kmart, Rose's and Hills Stores.
And the newest entry will be Kmart's answer to one-stop shopping: SuperKmart. The so-called hypermart includes both a discount store and a supermarket.
What does all this this mean for the neighborhood shops down the street?
The superstores aren't necessarily bad news for all small retailers. Shops near the big outlets may actually benefit. And while Wal-Mart has been blamed for the collapse of many downtowns - there have been a number of downtown businesses that are still raking in sales.
It's easy to pinpoint what went wrong. But here are examples of retailers doing it right: Cooke Hardware, clothing store Holmes Ltd. and Epps G M Farm Supply Co.
None calls retailing a path to glory and riches. But all three have a penchant for survival and a recipe for success in this changing marketplace.
Cooke Hardware: a family tradition
If there's one thing Robbie Cooke adores, it's his location on Battlefield Boulevard in Chesapeake. Cooke Hardware is a few hundred yards from Lowe's and just a few blocks away from Wal-Mart, Sam's Club and HQ Home Quarters Warehouse.
It's no joke: Small business owners may be better off if they're closer to the competition, says Kenneth M. Gassman Jr., a retail analyst with the brokerage Davenport & Co. If all the traffic is heading for the new superstore, a small retailer may want to consider moving next door and offering what the big outlets don't.
``Wal-Mart has Achilles' heels, and the small merchants who study Wal-Mart closely can figure out what the Achilles' heel is and change their merchandise offerings to effectively compete,'' Gassman said.
Cooke, whose business has been in the family for decades, has found his niche. He describes his operation as ``more convenience, the nuts-and-bolt hardware.''
``When you want a roll of masking tape or a paintbrush, you don't want to have the hassles of long lines and parking,'' he said.
Pricing is another matter. While superstores may have an edge, Cooke warns shoppers: The biggies make up promotional costs by using so-called ``blind items.'' For example, many customers don't know how much an item like a turnbuckle should cost, so they could be paying double or triple the fair price.
By scanning trade magazines and closely watching his competition, Cooke also has uncovered a few of the superstores' weaknesses. By their sheer size, he says, they cannot provide the same personal services that a small retailer can offer.
Sure, Wal-Mart and Kmart have people to greet you at the door, but do they usually remember your name?
Customers at Cooke Hardware also get welcomed - but Cooke usually knows their names and something more. Maybe a shopper's daughter just got hitched or there's a new baby in the family.
Shoppers also can take advantage of a wide variety of personalized services. For example, the hardware store offers UPS shipping and licenses for fishing, hunting and dogs. Cooke Hardware also will deliver mulch and repair windows, screens and lawn mowers.
Other superstore flaws, Cooke says, involve delays in advertising ``hot'' products and reordering out-of-stock merchandise.
When Cooke needs to advertise, it takes less than 30 minutes. He merely tacks the newest sale onto his billboard, which is well known in Chesapeake for its puns on news events. During the Winter Olympics, there was the Tonya Harding special on crowbars. And during the Lowe's-HQ advertising war, Cooke's sign blared ``The switch is off.''
Holmes Ltd.: generations of retailing
Lynnette Holmes Park has a knack for appearing when customers need her and disappearing when she should give them space.
``We have never been real hard sell,'' Park said of her clothing store, Holmes Ltd. of Suffolk. ``We like for the person to like what they bought. We don't want to push people because a happy customer is the best one.''
Her target market includes some working women but mainly retirees and homemakers. While she knows most of them by name, even first-time shoppers to Holmes Ltd. are warmly greeted.
The shop - brightly colored and comfortably furnished - intends to make customers feel at home with its yellow walls and vivid green carpet. A sunflower wreath hangs on one wall. In front, there are several comfortable chairs and a magazine-covered cocktail table for the weary.
The aisles are wide to give customers more breathing room as they scan clothing racks. To give the store a fresh look, the newest designs are displayed prominently and frequently changed.
Park says she stresses personalized service - everything from dropping off clothing at homes or leaving dresses overnight with their customers at local nursing homes.
Sales staff have memorized the return policy: Take it back.
Park's parents, also merchants, taught her to be as polite to her competitors as she is to her customers.
``In retail, we were brought up to always refer,'' she said. ``The better they do, the better you do. It keeps customers shopping in the town. People aren't going to drive to Suffolk to shop at one store. You have to have a good nucleus of stores.''
But don't mistake her for a pushover. Park is a polished yet fierce competitor. When she buys clothing from vendors, she makes sure that nothing will be found in Leggett or Hecht's. One of her favorite pastimes is analyzing the merchandise and displays at other shops and department stores.
``I love to shop other stores,'' she said. ``Anytime I take a vacation, I want to look at the stores and see what they have.''
Epps G M Farm Supply: a niche player
Mike Beale's secret to successful retailing is ``long hours, having what they want and treating people right.''
``I guess those are the main things,'' said Beale, owner of Epps G M Farm Supply in Suffolk.
His operation is unlike most. It combines a hardware store, a feed-and-seed operation and a lawn-and-garden shop. It offers everything from bird feeders to baby chickens, ducks, geese and rabbits.
``That's pretty much my niche,'' Beale said.
Like Cooke Hardware and Holmes Ltd., Beale tries to carry products that the superstores don't.
``I've got this certain type of hummingbird feeder,'' he said. ``At the (lawn and garden) show, they said they don't sell to Wal-Mart. I said, `Gimme one of those.' They've been selling fast ever since then.''
Sales staff take time to explain ``what kind of dust to put on a bug and what kind of fertilizers and sprays to use,'' Beale said. ``And, if I was waiting on somebody, they'd always get a `hello.' Most people will tell you that.''
Beale, who worked for years at Lowe's and Sears, has no illusions about retailing.
``You can't sit back and sit on the swing,'' he said. ``They are the ones who aren't going to make it . . . If I can stay where I'm at now, I'll be all right. I ain't going to get rich, but I'll make a living.'' ILLUSTRATION: [Cover]
SURVIVING THE SUPERSTORES
[Color Illustration]
[Color Photos]
MARTIN SMITH-RODDEN/Staff
Robbie Cooke
LAWRENCE JACKSON/Staff
Lynnette Holmes Park
Mike Beale
MICHAEL KESTNER
How to understand your competition:
1. Talk with customers. Ask customers about other places they
shop and why. Ask what merchandise and services competitors do or do
not offer.
2. Shop the competition.
3. Analyze competitors' advertisements.
4. Talk with other retailers in your area. Find out how they
respond. Share ideas.
Ways to grab market share
1. Improve the service level.
2. Stock unusual items and hard-to-find sizes of common items
that competitors don't offer.
3. Lower prices on selected items.
4. Adapt store hours to customers' lifestyles. The 9 a.m. to 5
p.m. weekday schedule doesn't always cut it.
5. Spruce up the decor.
6. Create pleasant surprises like free samples of a new
private-label candy.
7. Expand value-added services like home delivery and special
ordering.
8. Focus your advertising on competitive advantages. Let
customers know what products and services the competition doesn't
offer.
9. Offer an extended warranty or service contract - and advertise
it.
10. Host in-store promotional events.
Source: Arthur Anderson & Co.
PINPOINTING
What do your customers want?
1. Interview customers. Walk the floor and talk to shoppers. Ask
them what they like and don't like. Respond in a way to exceed their
expectations. Responses might include apologizing, giving store
credit, carrying packages to their cars or sending a follow-up
letter. Encourage employees to do the same. Discuss customer
concerns during regular staff meetings.
2. Conduct telephone or mail surveys. Ask shoppers how they liked
the new merchandise, what other products they'd like for you to
carry. Ask whether sales associates were friendly and helpful, and
whether shoppers would return.
3. Conduct a focus group of customers and non-customers. Ask each
of them to bring a friend to the meeting. Ask them about services
they'd like to see and what shopping hours are best for them. Offer
an incentive for participating. Choose subjects of greatest
importance to your business, such as merchandise selection, service
levels and advertising.
4. Provide self-addressed, postage-paid comment cards at the
checkout area.
5. Place an employee suggestion box in the back room.
6. Teach employees how to respond to customer calls. Educate and
empower sales associates to act on shoppers' complaints.
Arthur Anderson & Co.
by CNB