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WORTH REPEATING 



I 



There's Life after Wal-Mart 



Excerpts from a profile of Kennelh Stone, New York Times, October 24, 1993. 



.n the late 1980s, after spending 

 more than a decade helping Iowa 

 towns and businesses cope with 

 change, a rising tide of phone calls 

 and speaking invitations alerted Dr. 

 Kenneth Stone that he might have 

 the best data in the nation on what 

 happens when Wal-Mart and other 

 mass merchants move into a 

 community. 



Since then the mild-mannered 

 57-year-old Iowa State University 

 economist has diligently accumu- 

 lated something even more pre- 

 cious: insights into how local retail- 

 ers can survive — even thrive — when 

 Wal-Mart and its competitors, like 

 Kmart, the nation's No. 2 retail 

 chain, roar into town 



...Typically, Mr. Stone starts his 

 talks with a broad perspective 

 Here, he told the garden shop own- 

 ers they were seeing "the over-stor- 

 ing of America," citing not just such 

 mass merchants as Wal-Mart, but 

 shopping clubs and "category killer" 

 chains like Toys ^R' Us. "The rea- 

 son I pick on Wal-Mart is that they 

 are leading the way," he says 



In truth, Mr Stone does not so 

 much pick on Wal-Mart and its ri- 

 vals as pick over their strategies 

 and use them as lessons Some ad- 

 vice comes in the form of admoni- 

 tions to learn what works, like stay- 

 ing open on Sunday. Some advice 

 centers on how to cooperate with 

 the mass merchants, like signing 

 agreements to service the equip- 

 ment they sell And some comes 

 down to blunt warnings, like don't 

 try to undercut their price on items 

 like disposable diapers or tooth- 

 paste unless you are located far 

 enough away that they are not rou- 

 tinely checking your prices 



-he seems to have as many an- 

 ecdotes as Wal-Mart does pro- 

 ducts in a story designed to un- 

 derscore the value of good labeling, 

 he simply said he had never real- 

 ized Wal-Mart catered to elderly 

 shoppers by making price labels 

 large enough to read without bifo- 

 cals until he absentmindedly left 

 his glasses in the car on a recent 



visit to an outlet in Iowa. 



Mr. Stone may entertain his au- 

 diences, but his data often surprise 

 them Wal-Mart and other dis- 

 counters, for instance, attract more 

 high-income customers than is com- 

 monly believed. They've begun to 

 offer better service too, using such 

 tactics as hiring horticulturalists for 

 their lawn and garden sections... 



"He reaffirmed a lot of things 

 we knew we needed to know, "said 

 Steve Tholen, whose family owns 

 the Tholen's Landscape and Garden 

 Center stores in Kankakee and 

 Boubonnais, III. With 35 employees 

 and just past $1.7 million in rev- 

 enues, Tholen's now finds itself 

 within a few miles of a Wal-Mart, a 

 new Super Kmart, Venture. Target, 

 three big home-improvement chain 

 stores and three lumber yards, all 



of which are aiming at parts of 

 Tholen's business. 



Mr. Tholen and his wife, Nancy, 

 said Mr. Stone persuaded them 

 that they had to spend more time 

 checking competitors' prices and 

 more time and money training em- 

 ployees to offer customers expert 

 advice 



Dr. Stone's favorite testimonial 

 came from a hardware store owner 

 who came to him after a meeting in 

 Denver and said an earlier talk by 

 Mr Stone had saved his business. 

 The shop owner had been planning 

 to quit when a Wal-Mart opened 

 nearby but, after hearing Mr. Stone, 

 he sought and won a contract to 

 service power equipment sold by 

 the discount store. He ended up 

 with higher total sales, Mr. Stone 

 said... 



POINTERS FOR SURVIVAL 

 IN THE WAL-MART AGE 



1. Stay Open Longer. Sunday often produces the highest sales per 



hour, extend evening hours in busy seasons. 



2. Know Your Customers. Small retailers rarely study spending 

 patterns; local colleges can help. 



3 Give Cash Refunds. Mass merchants take anything back You 

 must, too Write it off as advertising. 



4. Be Smart on Pricing. Don't undercut on the 600 or so items Wal- 

 Mart displays prominently Make more customers know you're often 

 better on many others 



5. Find Wiggle Room. Where Wal-Mart prices are higher, occasionally 

 raise your prices to cover discounts on more price-sensitive items. 



6 Don't Cut Advertising. Focus it on special services like free deliv 

 ery, on-site maintenance, trade-in allowances. 



7 Be Different. Stock unusual products and different sizes of com 

 mon ones Pomt them out with clear, Informative labeling 



8. Show Off. Use artful displays to encourage browsing and empha 

 size your specialty. 



9. Stress Customer Relations. People accept "I'll be with you in a 

 moment," but hate being ignored. Solicit complaints Use videos to 

 train employees 



10. Rethink Employee Relations. Meet with employees frequently 

 Share how you are doing Call them associates, as Wal-Mart does. 



11. Draw on Allies. Join buying and marketing coops and use them 

 as vehicles to get more help from distnbutors and suppliers 



12. Go to Wal-Mart Frequently. Wal-Mart constantly improves Keep 

 abreast of what you are against 



28 



The Planlsman 



