Is There a Rash of Failures Ahead?

The Retail Owners Institute

In recent years, it has become quite trendy for large, major retail chains to announce the roll out of smaller versions of themselves for urban centers or “neighborhoods”. Examples include Target, Wal-Mart, Macys, Kohls, Lowes, and many others.
The inference in the media – powered by these corporation’s press releases – would lead one to believe that these smaller formats would be like specialty stores. “Well, aren’t specialty stores small? So are these new formats.”
It’s humorous to us how frequently the artform of successful independent retailers is totally lost on “the outside world”. Somehow, independent retailers are able to make their craft look so darn simple that seemingly anybody could do it, right?
Meanwhile, back at headquarters, “Of course our new format can compete with those locals. After all, we’ve got millions to spend, and our big stores are so well known.”
We think that we will be watching many of these small format rollouts “walk right off the end of the plank”!
Why?
1.One huge differentiation: their store managers, although well-intended, simply are not owners.
For instance, a store manager gets a regular paycheck, and is directed by operating instructions received from the next level up. The manager’s obligation: satisfy my district boss, or get replaced.
On the other hand, the independent owner is directed by customers, every hour of every day, 24/7. And, instead of a regular paycheck, the owner lives with the uncertainty of cash flow for take home pay. And that will focus anybody!
2.Another major differentiation: the big chains will buy centrally for their small-store expansion; specialty stores buy, well, specially!
They have an intimate awareness of the preferences of their best customers. In fact, this special focus on their best customers is their ultimate competitive edge!
Here’s the Bottom Line:
Simply reducing square footage does not transform a major chain into a specialty store. It’s that misconception why we see some of these “smaller format” rollouts walking the plank.

Do you see that same plank as we do??

Read more: http://retailowner.com/About/From-The-Co-Founders?utm_source=The+ROI+NEWS&utm_campaign=594f556eb4-Fri+5%2F8+edition&utm_medium=email&utm_term=0_5189aec942-594f556eb4-91387313#ixzz3ZgHRphN3

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