By DYAN MACHAN
It's the most familiar refrain in business: Sooner or later, the big and global devour the small and local. But why do some little, independently owned stores manage to stay glued to their foundations despite the cyclone of competition from chain stores and the Web? What can one glean from survivors besides clich s about customer service? We talked to a few, and extracted these tips.
The first survival rule: Send in the clowns. The management buzzword is experiential, but we call it the Walt Disney approach. Schaefer's TV and Appliance, in Lincoln, Neb., sits across the street from a Best Buy and minutes from other giants. But according to president Ron Romero, his store offers a better time. Schaefer's has constructed a model house inside the store, where buyers can configure their own mind-blowing sound systems. Though it sounds like an energy nightmare, the store also has a row of 16 working dishwashers to test-drive, and for extra fun, you can stuff towels into another whole corridor of washers and dryers. Not fun enough? In its Reading, Mass., store, Jordan's Furniture has a jelly bean Gen. George Washington on horseback, an ice cream shop and a trapeze school. That might sound silly, but this kind of silliness -- and the customer loyalty it inspires -- helped persuade Warren Buffett's Berkshire Hathaway to buy the Jordan minichain in 1999, for a reported $225 million.
"Differentiate" is the marching order Doug Fleener, a Lexington, Mass., retail consultant, gives his clients. "Otherwise," he says, "you're just caught in a commodity war" -- the kind of who's-the-cheapest battle a small retailer can never win. In contrast, some 86 percent of U.S. adults say they'll pay more for a better customer experience, according to a 2012 survey. It's the unquantifiable more that many small businesses stake their tents to. Baby gear, for example, is a particularly cutthroat business, dominated by chains that buy at volume discounts and that often use toys as loss leaders to lure customers. So it's cool that Magic Beans has managed to take territory in the Boston area with an arsenal that includes discounted car-seat installation, a staff who knows the difference between a sling and a Winkel, and frequent customer events. "Drool," the baby expo that cofounder Sheri Gurock held at her flagship store this year, attracted 75 vendors and 600 customers -- 75 percent of them new to the store. "The critical part is to establish trust and expertise," she says. "The chains don't do that well."
Even if your business has fewer bells and whistles, it pays to follow rule No. 2: Always engage. Local hardware stores have seen their numbers dwindle amid inroads by Lowe's and Home Depot.
But those that have thrived, like Dave's Ace Hardware in Milton, Wis. (independently owned though affiliated with the Ace cooperative), do so by connecting with customers in ways the big chains can't. Owner Dave Warren pays for his salespeople to buff up their social skills with Dale Carnegie training, answers his Facebook messages promptly and is even helpful to, uh, jerks. Once a customer complained that "the store sold him the wrong stain" for his camper deck. Warren went out to the person's trailer park and found that he'd already stained the entire deck -- so the store replaced all the boards in the deck. "He was a loyal customer after that," Warren says. Another hardware survivor, Miller Industrial Supply, of Elk Grove Village, Ill., would earn a place in the extreme retailing Olympics. When a snowstorm was about to hit in 2011, owner Bob Miller slept at his store to make sure his doors would be open. He'll also open after-hours if a customer has an emergency. "We save our customers' butts," he says.
To an outsider, that can seem like overkill; to businesses that practice it, it's more like an ingrained culture of integrity. And Barbara Melera believes it can help firms stick around. Melera is the owner of D. Landreth Seed, among the oldest businesses in the country: It was founded in 1784, brought zinnias to America and counts Thomas Jefferson, James Madison and George Washington among customers in its original Philadelphia store. Melera cites an incident in 1847 when the company ran out of seed catalogs. Landreth issued an apology and a promise that it wouldn't happen again. By 1860, it was paying to print 600,000 copies to make sure it wouldn't run out.
Rule No. 3 of survival? It's unlikely to be proclaimed by any management guru. Carl's Drug Store, in Greencastle, Pa., is the country's oldest continuously operating pharmacy -- founded in 1825. It's a tough business for entrepreneurs: There are about 23,000 independent pharmacies today, down from 40,000 three decades ago. Still, owner Frank Ervin says that "business is steady enough" (revealingly adding, during an interview, "Hurry up, Honey, I got three customers!"). Ervin bought the store in 1974 and says he hasn't really changed his product mix in any special way. So what has enabled him to compete? As Ervin pauses to answer, we lean in closely to hear this sacred truth: "parking." Carl's expanded its lot when it moved to a new location eight years ago. "Made a big difference."