Independents get pep talk, ideas at Kids Today Conference

By Gerri Hunt -- Kids Today, 7/1/2007 12:00:00 AM

Home accents industry veteran Randy Eller, speaking at the recent Kids Today conference in Bonita Springs, Fla., gave a contrarian's view of big box retailers.

He said people assume that because a beautiful store is part of chain, they must be highly successful.

"In the last 30 years, the story in this industry has always been the imminent demise of the independent retailer at the hands of the big boys," Eller said.

But he pointed out the recent financial woes of Pier 1 and The Bombay Co.

"This is not an anomaly," he said of their downturns. "This is the norm. When you decide your business model is based on price, you're in a race to the bottom."

And manufacturers may be starting to realize the same thing.

Eller said power tool manufacturer Stihl has made a name for itself without entering chains such as Lowe's Home Improvement and Home Depot. Instead, Stihl opted to sell only through independent retailers.

"They decided to take a stand. It's a movement going across the country," he said.

Eller also cited Ganz's Webkinz, small stuffed animals which children can purchase through small retailers, then get on the Internet and "adopt" the animal, play games, decorate rooms and do other activities.

"They're Beanie Babies meets the World Wide Web...on steroids. They've done $1 billion wholesale through independent retailers in the last year," he said.

"Why should independents thrive?" Eller asked. "At the end of the day, it's not about the product we sell. We need to wake up...consumers are coming for the experience of shopping."

He said independent retailers should imagine customers coming into their stores holding up a sign that says, 'I'm willing to pay more, you just have to show me why I should'.

"Consumers know they are not coming to independent stores for a price that is equal to or better than big stores," he continued.

So it's a question of small retailers focusing on the right things:

• Price is not the reason people come to independent stores.

• Stop worrying about total big box dollars. Forget about commodities.

• Focus on the "shopping experience" of the store.

"It's a new world out there," said Eller. "Retailers must become traffic builders. Your number one job is to get traffic into your store.

He suggested doing promotions with other retailers in the same shopping center or hooking up with charities. One easy charitable event is to find a local group who needs to raise money, and agree to donate 10% of the store's sales for the weekend to the group. It works great with student groups, who can canvas streets with flyers three days prior to the sale.

Independent retailers also need to determine who their customers are, what they want and how they want it.

Eller spent a decade as president and part owner of CBK, a home decor manufacturer that studied these factors. CBK decided to focus on independent retailers, good quality merchandise at reasonable prices, and to offer more than 50 one-piece minimum items to keep the retailers' back rooms clear of stock.

He said the independents were excited about the concept, "and it flew us to the moon, too."

Eller said small retailers should take advantage of the Internet.

"You guys are tailor-made for [online] galleries and photo journals," he told the crowd.

He also suggested that to get business, retailers should go upscale.

"Retailing is becoming an experience. Think about Starbucks, Apple and Verizon," he said.

Store owners should be aware of what's going on not just with other retailers, but with the world.

"In business, if you pay attention to the world, it will send you information about what's coming," he said.

He pointed out three trends independents might want to think about:

• Spiritual merchandise. This category is growing rapidly, so figure out how to add that department into your store.

• Global warming. Find a way to carry more environmentally-friendly products.

• Hispanic and Asian markets. When it comes to these fastest-growing groups, research their holidays, customs, celebrations and kids' needs."Hispanics have so many more children than any other group in America," said Eller.

He left the audience with one final thought to ponder.

"It is not the strongest of the species that survives, nor the most intelligent that survives," Eller quoted Charles Darwin as saying. "It is the one that is the most adaptable to change."

Randy Eller