FLAGSTAFF, Arizona, August 10 -- Around here, lots of cars bear bumper stickers reading, "Support Locally Owned Businesses," or SLOB for short. In a small city like Flagstaff, one of the hottest socio-political issues is the struggle of small local businesses against national or out-of-town "big box" retailers (like Wal-Mart) and Web-based retailers (like Amazon.com). Local activists are up in arms over the rise of new commercial buildings and the consumer trend toward buying products from companies not headquartered in Flagstaff. They've gone so far as to don sandwich signs and picket the Barnes & Noble bookstore that opened a few months ago.
Local businesses are simply going to have to find ways to compete with the big guys -- otherwise, they're toast.
I got to the bookstore and spent several minutes wandering around, looking for their computer-books section. Couldn't find it. For some reason, retail bookstores are among the most poorly organized establishments on the face of the Earth -- unlike a library, where you've got a computerized card catalog that tells you where everything is, in a store, you have to figure out (a) how they're likely to have categorized the book you want, and (b) where they've hidden that particular category.
We're on Internet time, guys!
I mention this not because it's news to anyone who shops on-line, but because it should be a wake-up call to those who do business the old-fashioned way. Supporting Locally Owned Businesses is all well and good -- but why should I do that, when someone else is getting me the same product faster and probably cheaper?
Do local businesses provide good jobs for locals? No. They provide minimum-wage service jobs and generate a certain amount of tax revenue -- but so does Wal-Mart.
For more than 40 years, my Uncle Nick owned and operated an independent drugstore in Newburyport, Massachusetts, eventually turning the store over to his son, my cousin Andy. He was successful for a long time -- but eventually, his business fell victim to the rise of big chain pharmacies. As Andy told me, "I'd have someone come into the store, pick up a bottle of shampoo and say, `Hey, CVS [a large drugstore chain] is selling this for $2.59. How come you're charging me $4.00?'" Buying shampoo a case or two at a time, Andy had to pay much more than CVS, who was buying thousands of cases at a time. So he lost a lot of business to the big guys -- and eventually had to sell out to them. Some 12-13 years ago, he made a decision to sell the store to CVS and go to work for their local outlet as a staff pharmacist.
It's unfortunate that there are no (or almost no) independent drugstores anymore, and that local bookstores are falling by the wayside in the face of competition from the big stores. But you can't expect consumers to pay more for less and take longer to get it, just out of an altruistic desire to help local businesses. LOBs are simply going to have to find ways to compete -- otherwise, they're toast. How they do it is their problem to work out -- not ours. This may be unfortunate, but that's how a market economy works.
You want fries with that?
Just to play devil's advocate, why should we Support Locally Owned Businesses? Do they provide good jobs for locals? No. They provide a lot of entry-level service jobs and generate a certain amount of sales-tax revenue -- but so do the big-box retailers. In the case of web retailers, OK -- here, the SLOBs have a leg to stand on, because Web purchases aren't (usually) subject to sales taxes, so the money you pay goes right out of the state. And they don't provide any local jobs. But again, who needs a McJob? The retail industry doesn't provide a significant number of good (i.e., professional) jobs anyway.
(I think the city of Flagstaff should stop trying to attract more retailers -- and, while we're at it, businesses that cater primarily to tourists -- and concentrate on courting real industries, like technology. But that's another column.)
So how are local businesses going to compete? Well, one way is by providing superior customer service. When I lived in the Boston area, I used to frequent a small record store owned and operated by a couple who made it their practice to stock (or at least be ready and willing to order) every record in the Schwann catalog, to let the customer listen to a CD before buying, and to offer helpful advice and recommendations. Despite the arrival of several big record stores in the immediate area, their little shop survived (last I knew, they were still in business, having resumed operations some months after a fire severely damaged their shop).
Damned if you do; damned if you don't
This afternoon, when I walked into what I thought was the best bookstore in Flagstaff and found that not only did they not have the book I wanted, but that it was going to take five to ten business days to get it, I was faced with a dilemma. Do I Support Locally Owned Businesses in spite of the inconvenience, or do I do what a rational consumer would do: buy on-line?
Copyright © 2000 John J. Kafalas
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