Competition and Customers and Retailers and Business Topics and Retail and Real Estate & Retail and Small Business

Local stores promote service and uniqueness, not discounts, during holidays

December 15, 2008
Crammed into 2,000 square feet of space, local retailer Mass Ave Toys tries to differentiate itself from big-box competitors by hawking playthings they won't stock.

The one exception: a laser tag game by Wild Planet Entertainment Inc.

"It's such a good toy, I have to sell it," owner Natalie Canull acknowledged. "Other than that, our toys are unique, and I think our customers recognize that."

Local merchants are banking on that type of loyalty to achieve sales they hope will surpass the gloomy expectations forecast for the holiday shopping season.

Nationally, sales rose 3 percent, to $10.6 billion, on Black Friday from a year ago, but slipped 0.8 percent to $6 billion the day after, according to data from retail research firm ShopperTrak RCT. Black Friday, the day after Thanksgiving, is traditionally one of the busiest shopping days of the year.

The National Retail Federation predicts that overall holiday sales will rise 2.2 percent from a year ago — which still would be the slowest growth since 2002.

Hoosiers are expected to be just as frugal. The Indiana Retail Council projects retail sales here will rise 2 percent, roughly half the increase for a typical holiday shopping season.

Unlike their larger counterparts, though, locally owned merchants aren't pushing deep discounts to lure shoppers through their doors. They instead are relying on more traditional strengths.

"Independent retailers have to work harder in a very competitive retail marketplace," IRC Director Grant Monahan said. "But when they play upon their strengths — when they know their niche, when they know their customer base, when they tailor their merchandise mix for the local market —that can obviously play to the retailer's advantage."

Service matters

Canull at Mass Ave Toys has become friendly enough with many of her customers since opening two years ago that she knows them by name. They often bring their children in to play.

Toys that sit on the shelves too long are exiled to a 40-percent-off table. Besides that, Canull has no plans to offer special promotions to boost traffic. Despite forecasts, she remains upbeat about December, but admitted nervousness about January.

Liz Barden at Big Hat Books in Broad Ripple is optimistic about the holidays as well. Billed as the only independent general-interest bookstore in the city, Big Hat features a select number of titles that Barden personally chooses.

There's not a lot of room. The store is moving Jan. 1 to space at Cornell Avenue and East 65th Street next door to the Broad Ripple Brew Pub, tripling the store's size.

But when customers have questions about certain books, Barden, who said she's read most of the inventory, more than likely will have an answer.

"Instead of having how many thousands of titles, I've narrowed it down to a select group of titles that I feel are the best of the best," she said. "I think it really makes a difference when you know what you're talking about."

Barden also is shying away from sales and instead counting on her loyal customer base to carry the month. Thin margins and minimal profits prevent her from offering discounts, she said.

Greg Bires, owner of the downtown Windsor Jewelry Co., thinks sales confuse the customer. Stores might artificially raise a price when placing an item on sale, or, if it's continually discounted, the normal price becomes diluted, he said.

"We've always offered a good value to begin with," he said, "so we never got caught up in deep discounting."

Bires might give a loyal customer up to 15 percent off a piece of jewelry, which he considered a legitimate savings. Otherwise, he relies on the store's service. The downtown stalwart has been in business more than 90 years, owned the last 10 by Bires.

Although he's confident the jeweler will have a strong month, it's too early to tell. The reason: Most men are last-minute shoppers, he said.

Consumers in general, however, are taking advantage of low prices and hitting stores early. More than 172 million shoppers visited stores and Web sites over Black Friday weekend, up from 147 million shoppers last year, according to a National Retail Federation survey.

Online sales climbing

In a rare ray of hope for the retail sector, online sales from Black Friday through the following Monday were up 13 percent compared with last year, according to data released by comScore.

Roy Keller, owner of Circle City Bicycles on Madison Avenue south of Thompson Road, is leaning more on e-commerce sales to supplement his traditional business. Historically, bicycles were one of the top children's gifts for Christmas. But as electronics and video games gained prominence, bicycles fell on the most-popular present list.

Since 2000, Keller gradually has been offering more bicycle-related merchandise online — everything from books to jerseys to tree ornaments and picture frames.

"It complements the season," he said, "because bikes are big in the spring and summer."

Sales of running shoes and apparel remain strong throughout the year, though. Patrons of the Athletic Annex on West 86th Street will buy for loved ones and themselves, after a long day shopping for others, co-owner Matt Ebersole said.

Customers subscribing to the store's email news received alerts before Thanksgiving about a few specials. But the biggest draw might be the wealth of running experience the owners offer. Customers are evaluated and encouraged to test their shoes by walking or running outside the store, and even taking them home a few hours for an extended audition.

Still, Ebersole strikes a cautious tone when forecasting the next few weeks.

"It's hard to be real optimistic with everything we're hearing," he said. "If we can be close to last year, I think we would be pleased with that."

A survey from New York-based accounting firm Deloitte and Touche suggests that could be a challenge. Just 39 percent of Hoosiers surveyed said they would spend at least the same amount as last year, compared with 55 percent a year ago.
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