Mom and pop stores in the United States eke out precarious existences. While almost 70 percent make it at least two years, just a little more than half survive for five years or more. Many are undercapitalized from the outset; others succumb to changing economic conditions; others are swallowed up by bigger businesses.
In the 1980s and 1990s, big box mart stores – Walmart, Kmart, Target, Home Depot – and large media retailers – Borders, Blockbuster and Tower Records – gobbled up many of America’s mom and pop stores. While the collective impact of these behemoths can be overstated, it’s hard to argue that the big box stores, equipped with their “loss leaders” and their vast marketing budgets, didn’t make life more difficult for America’s mom and pop stores.
Now, however, the very massiveness of the big box retailers is working against them. Borders, Blockbuster and Tower Records proved no match for the Internet; Best Buy is struggling vainly and feebly against Amazon and other Web retailers. The downfall of these giants demonstrates that characteristics that are valuable in one economic climate can become detrimental in a different one.
Conversely, the smallness of America’s mom and pop stores is now – in an age dominated by the Web – an advantage; the business world’s intelligentsia are heralding “The Rebirth of Mom-and-Pop Shops.”
Blue Point Trading recently wrote:
[Here] comes retail 3.0. Yes the mom and pop stores return – online!!! For those online entrepreneurs ready to venture out with better niche product understanding, super targeted search/social media marketing, personalized customer service and small back office costs (that the Internet can provide and that large bulky brick and mortar organizations cannot provide), new opportunities are at last here for mom and pop.
Mom and pop stores need to capitalize on opportunities afforded by the Web and other digital technologies. They can thrive even in our current economic climate and they can do just what a lot of other businesses have done: beat the big guys.
Thriving in an Online World
It’s not controversial to point out that mom and pop stores without brick and mortar establishments are now causing larger retailers all manner of headaches. Borders was defeated by online book sellers in 2011; more recently, Sears Holdings Corp and Best Buy announced they would be either shuttering or selling a number of stores. Like Borders, these dinosaurs have been badly hurt by online competitors who sell the same wares they do – but do so at reduced prices.
Big box retailers are suffering because online retail is becoming an increasingly important part of total retail sales. While online sales amounted to just a little more than five percent of total retail sales in their third quarter of 2012, they were up more than 17 percent from the same quarter a year earlier. To put this growth in perspective, total retail sales over the same period rose an anemic 4.6 percent; it would seem that more and more people are flocking to online retailers and giving up on the brick and mortar shopping experience altogether.
Marshal Cohen, a retail analyst at the market research firm NPD Group, puts the growth of online retail in perspective, saying, “Online a decade ago didn’t even represent 4 percent of [total retail] sales.” In most retail sectors it is now about 16 percent.
Small businesses that dwell in the empyrean of the Web aren’t the only ones benefiting from it, though. Retailers with brick and mortar stores are using the Web to augment and bolster their traditional selling techniques. BIA/Kelsey’s Local Commerce Monitor research, a longitudinal 15-year tracking study of small businesses approaches to marketing and media, found that more than one-quarter of mom and pop stores are planning to spend money on digital marketing campaigns in the coming year. What’s more astounding is that the survey found that almost half of all mom and pop stores are currently buying online advertising.
This mountain of data shows that small businesses have adapted to the Web with stunning alacrity. Mom and pop stores – far from being hidebound traditionalists trying desperately to avoid the great galumphing feet of the ‘marts – are using digital marketing to outmaneuver them.
Mom and Pop go Social
Walmart, if you are reading, these people are trouncing you at social media marketing.
One technology that smaller retailers have taken to with particular alacrity is social media. Greg Sterling, who studies the Web’s influence on business’ behaviors, said in an interview with The New York Times, “We think of these social media tools as being in the realm of the sophisticated, multiplatform marketers like Coca-Cola and McDonald’s, but a lot of these super-small businesses are gravitating toward them because they are accessible, free and very simple.”
Small retailers like Silver Barn Antiques in Columbus, Texas have used Twitter and other social media platforms to engage with customers and suppliers beyond their restricted and relatively small ecosystem. Cynthia Sutton-Stolle, the store’s owner, said “We don’t even have our Web site done, and we weren’t even trying to start an e-commerce business… Twitter has been a real valuable tool because it’s made us national instead of a little-bitty store in a little-bitty town.”
Mom and pop are actually having considerably more success with social media than their larger competitors. The social media metrics firm Recommend.ly. compared the successes of Walmart stores’ fan pages and the fan pages of small local businesses. Of the nearly 3,000 Walmart fan pages Recommend.ly. found fewer than 4 percent had more than 1,000 fans.
In contrast, when Recommend.ly. studied almost 2,000 local business pages on Facebook, it found that more than 22 percent of them had more than 1,000 fans.
It’s easy to explain this fairly dramatic disparity; locally owned businesses tend to be better connected with their fans. “Walmart local stores tend to be posting what is centrally controlled…We see very little that’s localized,” Recommend.ly.’s CEO Venkata Ramana said. Mom and pop stores are able to better leverage social media platforms because they can project authentic and distinct personalities; it’s hard for big box retailers to do the same.
Conclusion
Mom and pop stores around the country can take heart from the opportunities afforded by the Web – although it looks like a lot of them already have. Small businesses can use digital marketing technologies to compete effectively in the current economy. Those businesses that haven’t started exploiting digital marketing technologies need to begin doing so immediately if they want to avoid being either squashed by the Goliaths of the retail world or outfoxed by cagey mom and pop stores.
Credits:
http://www.gwhqproductions.com/digital-marketing-and-the-revenge-of-the-mom-and-pop-store/
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