Thursday 12 Jun 2008
Matt McGee just wrote an extremely thought-provoking post about the effect the Internet is having on small, local businesses. Is the Internet the enemy? Is it destroying our concepts of community? Will Mom & Pop survive in the Amazon.com world?
The Truth Is, Mom & Pop Have Been Having Trouble For Centuries
Let’s take a quick glance at the history of commerce in America. When European settlers began founding ‘towns’ in the United States, the essential ingredient was the trading post or general store. These entities often acted as green grocer, dry goods dealer, post office, saloon and hotel for everyone living within a tremendous radius of their location. These businesses were the
Walmart of their day.
Rather quickly, East Coast settlements began to grow, and their frontier counterparts did the same, though more slowly. The increase in population and demand for products led to a period of specialization. Soon, the general store was sharing street space with the butcher shop, bakery, clothiers, haberdasher, candy store, furniture maker, fabric store, etc. The number and types of businesses expanded rapidly where the population could support this new level of commerce.
But the Victorians had Walmart in their veins when they created the emporium. This was the early department store – a new-fangled version of the general store minus the rusticity. Now, families could shop for everything from stylish shoes to clothes wringers to imported china all in one, huge store. Listen hard and you’ll hear the echoes of the neighborhood cobbler grumbling that the fancy emporium was putting him out of business.
Food service businesses fared better as the Victorian emporiums tended not to sell fresh foods in most cases. But then came the supermarket of the mid-20th century and, one by one, the butcher, baker, green grocer and corner store owner had to close their doors. Like the emporium, the supermarket caused an amazing reduction in the number of small businesses in the city landscape. The supermarket was then followed by the shopping center and shopping mall which condensed a few national chain stores into one place to be repeated ad infinitum across the country, homogenizing business in a manner never before seen.
What the early general store, the emporium, supermarket and shopping mall all had in common was an offer of convenience. Come here for everything you need, these ventures proclaimed. If Americans have displayed a deathless loyalty to any virtue, it has been the marketing pitch of convenience. And all along, Mom & Pop have been struggling to stay solvent amidst these movements of expansion and reduction that are the history of American commerce.
It’s a rare town in which you’ll find a corn chandler complaining that Whole Foods has put him out of business at this point, but the Internet is uniting many small local businesses with the experience of being up against a colossus of a competitor offering the incredible convenience of doing business from the comfort of your favorite chair. The competitor is new, but the challenges are going to be as familiar to today’s small business owners as they would have been to the clockmaker of yesterday.
When Safeway Came To Town, The Greengrocer Went Into A Different Business
Matt McGee’s article links to this news piece on how the Internet is putting the local business out of business. The reporter speaks with a camera film developer and a florist who say they are really struggling to keep their heads above water because past customers are now using digital cameras and ordering their bouquets online. These business owners aren’t dumb people…doubtless they have given their lives to learning a trade and an industry, and they are right in observing that times have changed. Consumer demands have changed.
When was the last time you visited a blacksmith to have your horse shod? For most of us, the answer is ‘never’. When demand changes, business models have to change, and that’s the simple answer. Americans are shopping at Amazon.com because of the convenience of doing business from home and having an inventory to choose from with which no small bookshop can compete.
The business owners in the news piece are asking the public to imagine their small town with all the local businesses closed, and while I really do appreciate this appeal for some thought about where to shop, I think the picture is incomplete.
Imagine, instead, your town with only those businesses that supply anything you can’t get on the Internet. Make a list of those businesses. Now, you’ve got a clearer picture of what your best opportunities are for going into business locally. Opening a bookstore is probably not a plan for success anymore unless you identify a niche that is so in-demand and so rare that you can actually pay the bills selling this product to your neighbors. In the book world, I’m not sure what this would be, but in other fields, I am seeing a wealth of opportunities for the well-planned local business.
3 Things Your Local Business Can Provide That The Internet Can’t
1) Instant Gratification
Sorry, but with the exception of digital downloads, buying off the web means waiting for something to be shipped to you. It also means paying for shipping. There are plenty of things that people want now. Often, shopping contains an element of excitement and people want to be gratified with choosing their items and taking them home right now. It doesn’t matter if this is something to eat, wear or hang on the wall. Americans love getting something now and your local business doesn’t require them to wait 3-10 business days to get it. You can make the convenience proposition work in your favor instead of against it.
2) Physical Interaction
Speaking as a woman who stands little over 5 feet tall and weighs about as much as a sack of potatoes, I can tell you that I will never buy pants off the Internet. Sorry, but there is just no way for me to know trousers are going to fit me unless I can try them on and I really don’t consider having to go to the post office to return ill-fitting garments a fun use of my time. With the exception of bulky items like sweaters, I shop locally for clothing and shoes. Most people have difficulty finding clothing that fits them – we are all different shapes and sizes. Trying something on is the only way to be sure a garment fits, and you cannot do this online.
You also can’t count on the colors you see on your monitor. This is especially important to me in all of my craft-oriented pursuits. When I buy fabric, I want to see it and touch it first. House paint is something else that falls under this heading; what looks like tea green on my screen may be screaming neon in the can.
In any situation where a physical action is required to meet the customer’s needs for feeling confident about a product, there is an opportunity for a local business.
I’ve debated adding customer service under this heading. While many people express that they like to do business with people they can see, and I’ve seen everything from banks to bookstores using this as a USP, I’m not sure that this offer has any teeth. I have been distinctly unimpressed with face-to-face customer service in too many local businesses to count. For the most part, I lay the blame for this on an economy that hires the youngest, least-skilled workers possible in order to keep operating costs low. A 17 year old boy is really not going to be able to offer me much genuine help choosing upholstery, in most cases, and I don’t actually enjoy listening to rap music while I’m trying to find a new blouse.
I’ve been tempted to ask to speak to the babysitter in local shops I’ve attempted to patronize after having my questions met with, “uh…uhmm…I dunno.” It’s because of this that I think the selling point of customer service is really only going to appeal to certain kinds of customers and only if the store is going to be able to employ an experienced, trained staff. Yet, where the business owner is knowledgeable and plans to be in the shop most of the time, they can certainly offer a voice of experience that you’re not going to get by tangling with the outsourced live-chat offered by many websites as a ‘replacement’ for live customer service.
3) Local Only Offerings
To me, this is the real heart of the matter and the main purpose of this article. If the business landscape has changed so that most of your neighbors are going online for certain kinds of goods and services and you are thinking of changing your business or opening a new one, you’ve got to define needs that can best be met locally. Here’s a quick brainstorm of businesses that either require the customer coming to the business or the business going to the customer:
Landscape Consulting and Yard Maintenance
Custom Clothing Alterations
Service business involving legal, medical or other professional consultation
That’s a short list. You can think of other businesses that it would be difficult or impossible to replicate online. Really, you can’t get your hair cut online, and you probably never will be able to, right? So, a small business hair salon is a sustainable business venture. If you’ve yet to go into business, the time to make a list like this is now. Identify a way to offer your neighbors something essential or desirable they can’t get online. If you’re already in business and are realizing that the Internet is stealing your customers, now is the time to alter your inventory or services to become an irreplaceable part of your town’s commercial scene.
The truth is that the future may see a primarily residential landscape. Why pay exorbitant rent on a high rise in downtown San Francisco when the majority of your staff can work at home? Why open a bed and bath shop when your customers can get their towels with the click of a mouse? Why have retailers of mass-produced products when the customer could so easily access the manufacturer directly if the manufacturer bothers himself to put up a website rather than dealing with vending his products to a whole bunch of resellers who then have to pay rent, pay staff, deal with customers in a physical building? Why not just employ UPS to deliver your product to customers in their homes?
These are real questions the answer to which are becoming more apparent with every passing year. The world of business is contracting again and eliminating replaceable businesses just as the supermarket once did. Smart small business owners will look for opportunities in this situation.
The Exception To The Rule
So many of us have watched what Walmart has done to our towns, filling America’s homes with their cheap imported products, manufactured by sweatshop workers and being sold by underpaid workers. There is a counter-movement to this happening that appears to me to be going hand-in-hand with Green ideology. Certain kinds of businesses stand to clean up from this new development. Do you install solar panels? Do you offer toxic-free home consulting? Can you set up an organic farm stand that offers produce that puts Whole Foods organic agribusiness vegetables to shame? What about supplying luxury items like local olive oil or fresh blueberries to the fancy restaurants in your town? What about offering handcrafts that are specific to your region of the world, be this Zuni silver, Appalachian quilts or Northwoods braided rugs?
Truly enterprising Moms & Pops have an opportunity to supply the handmade, organic, green, earth-friendly and local products that the most conscientious (and often wealthiest) consumers are beginning to search for. To me, this is a very positive new trend in business.
Local Search Is For You
On a final note, let me take a moment to urge small local business owners who are feeling the heavy hand of the Internet weighing down on them not to view the web as the enemy. With the right local business, the web is about to become your best friend.
Studies keep finding different numbers on this, but research keeps proving that vast quantities of Internet users are using the web to research products which they then buy locally. For example, a customer might first look at a lot of different stoves online before going to the local retailer to make a purchase. But, this data really only helps retailers who are reselling big brands, and this isn’t normally a good business model for Mom & Pop. Remember – if they can get it online, its not an essential local offering.
Where the Internet comes into brilliant play for the local small business is in the opportunity it provides for you to advertise yourself. Having a website developed for your small business is going to be much more affordable than taking out a full page ad in the traditional Yellow Pages and it will be yours for as long as you keep paying for your domain and hosting. Adding new pages to your site will cost you pennies compared to taking out ad space in newspapers and magazines. Get really into the web and start blogging about your business and your town and see what you can do to get your neighbors coming in to your store to do business. And, make excellent use of the opportunities being provided by search engines like Google and Yahoo who are investing themselves in becoming the place to go for local information. Ranking well in these local entities on the web may mean the difference between closing your doors and adding another wing onto your business to accommodate all of your new customers.
What you can’t do, if you want to stay in business and to succeed in business, is to ignore how the world of commerce is changing. Whether we like it or not, the general national loyalty remains to whichever offer is most convenient. This means Safeway, it means Walmart and it means Amazon.com. But the shrewd small business person will identify the opportunities and start providing solutions where Safeway, Walmart and Amazon are incapable of doing so. The change is real, and so are the good opportunities.