There's a scene in the prescient 1976 film Network in which ultra-evil uber-boss Ned Beatty stands at the head of a gleaming 30-foot-long conference table in a hushed and darkened room and unleashes the following fire-and-brimstone explanation of modern-day corporate cosmology: "...There are no nations...there are no third worlds; there is no West...There is no America, there is no democracy. There is only IBM, and ITT, and AT&T, and Dupont, Dow, Union Carbide, and Exxon...The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business...Our children will live to see [that] perfect world: one vast and ecumenical holding for which all men will labor, and in which all men will hold a share of stock--all necessities provided, all anxieties tranquilized, all boredom amused."
Fast-forward 20 years; substitute such names as Wal-Mart, Toys-R-Us, Barnes & Noble, Heilig-Meyers, and SuperPetz for the megalomaniacal powers-that-be, and the resemblance to Paddy Chayefsky's vision of monolithic-corporate domination is eerily accurate. Hugely successful discount chain stores now cast their long shadows over most of the American retail landscape, luring us with their siren songs of low prices and convenience, enticing us through their automated doors with fleeting promises of material delights as foretold in their glossy, full-color ad pages that cascade daily from our morning newspapers.
And we all find ourselves in them at one time or another; there's really no escape. Their discounting, bulk-buying ways make it seem almost foolish for us to not buy our products from them. Why should we pay $45 for a Sony Walkman at Joe Shmoe's Corner Electronics, when the identical item is available at Target for $29.95 (and while we're at it we can pick up a 20-pound bag of cat food and a copy of the latest bestseller)? We want what we want, and we want it now, and that's what keeps our great capitalistic society going. But at what cost to our community as a whole, let alone to local merchants, those entrepreneurial heroes in every hometown who would prefer not to labor for and hold a share of stock in anyone else's vast and ecumenical holding? In Knoxville, the list of small businesses that expired in competition with mega-chains is ever-growing: Raven Records, Shriver's, Moveable Feast, Sequoia Drugs, Gateway Books, Blues Depot...
Wal-Mart, the largest retailer in the U.S., is infamous for coming into a burgh--say, Newport, Jefferson County, or the already impossibly traffic-choked Walker Springs interstate exit in west Knox County--and erecting its 91,000-square-foot "discount" stores. Sometimes, they then move on to another plum site and build a brand new 182,000-square-foot Supercenter, leaving in their wake not only deserted strip malls and grocery stores but also, this time, a huge abandoned husk of a building that few (if any) other local businesses can afford to lease.
While they're at it, they tranquilize our anxieties. Because Wal-Mart alone sells about one-twelfth of all pop recordings sold in this country, they can (and do, under penalty of not carrying artists' works) bully record labels into altering their wares to suit Wal-Mart's tastes. And they do amuse our boredom, often by playing by their own rules: Independent booksellers nationwide have noted how Sam's Wholesale Club-- a leisure service of Wal-Mart--feels free to get the jump on the competition by offering newly-released books to its customers before the official "lay-down" date observed by other bookstores--and because no one's going to tell them they can't, they get away with it.
Freedom of expression issues and fair trade practices aside, what do we make of our retail choices today? Is the Brave New World that the global economy is increasingly offering us--wherein the last small independent bookseller closes up shop for good and the lucrative ghost of Sam Walton dictates to America what records and videos are morally acceptable for us all--an inevitability, or just a feverish conspiracy theory? What's a mom & pop business got to do to stay alive these days?
Independent retailers can survive, even thrive, and not only in spite of the Wal-Marts of the world, but sometimes because of them. Here are retail theories and other tales from some local independent business owners who, despite the odds, are standing their ground as Davids in a growing world of retail Goliaths.
Service with a Smile
In October 1987, UT grad student Allan Miller faced a dilemma: continue his studies in clinical nutrition, or figure out what to do with his burgeoning, homegrown compact-disc copying and distribution business. "I was delivering discs to students and faculty between classes, and it was getting to be too much," says the co-partner of the Disc Exchange, which now boasts two good-sized, exceptionally well-stocked CD emporiums in Knoxville: the original store on Chapman Highway, which recently underwent a major expansion under the auspices of manager Scott Partin; and its two-year-old sibling on Kingston Pike.
Ironically, Miller recounts, "We didn't start it to make money; we [Miller and co-partner Jeannie Jenkins] just like music a lot, and we were trying to get music for cheap. That's all it was supposed to have been. I kept thinking I would find someone else to run it, but I couldn't find anyone with the time or experience, so I just did it myself. It kind of grew from there."
The secret of the Disc Exchange's success is simple and organic: a store staffed with people who share with their customers passionate love of music. "If you go into a store and spend full price on a CD and you don't like it, it kind of turns you off to getting into new music or discovering other things," Miller says. "You want the whole experience [of listening to and buying music] to be pleasurable, and so do we. The people we have working at the store are all musicologists, real big into music, and they all have certain areas of expertise. It's a big turn-on for our employees to help people find new music or the music they're looking for."
Miller also challenges the assumptions that larger music-store outlets, whether Wal-Mart or Camelot in West Town Mall, are more convenient than the little guys. "If you go into a locally-owned store," he says, "they can probably get you to where you need to be and out the door faster than it takes for you to park out in some big parking lot, walk all the way in, wander around trying to find what you want, try to find someone to point you in the right direction, try to make your mind up what you need, find it, then get in a long line with other people who think they're saving money by going there, then walk all the way back out to your car."
And that's assuming lower prices happen at the big "discount" stores--an assumption the big guys flog but that ain't necessarily so. Frequently stores will use a few "loss-leader" items (merchandise purposely marked so cheaply the store will lose money on it), only to mark up other, less-frequently purchased items (and therefore less frequently compared in price to the same items at other stores) to make up the difference. What's more, chain stores can well afford to lose money for a while at a new startup store by offering lower prices until any area competition has effectively been run off--at which time the store's prices inch up to about the same level the competition was offering in the first place.
Miller also points out that money spent at the big chain stores "heads out, not into the community, but back to the corporate office, into the big cities or wherever they are. A lot of people are so concerned with price they forget there's a lot of other things that go along with that. It's called being a good citizen."
Judy Luna, marketing manager for Davis-Kidd Booksellers' Knoxville store, couldn't agree more with Miller about the importance of a retailer's sense of community.
"That's why we do poetry readings, book signings, and discussion groups," says Luna. "That's the way we like to bring people in, rather than spending a lot of money on media advertising."
That, and offering customer service over deep discount--a philosophy that admittedly hurts smaller booksellers such as Davis-Kidd, which first opened in 1980 in Nashville and has since expanded.
"We have more staff available than most bookstores; that's a high priority for us. But that also prevents us from being able to offer across-the-board discounts like other stores. You can't be everything. But we feel the way we do things does build strong customer loyalty. People feel comfortable coming in here to a signing or book group, even though they may not know anyone else. Lots of times people tell us they've just moved to town and thought it seemed like a good safe way to meet people."
The real-estate mantra of "location, location, location" impelled Davis-Kidd five years ago to pull out of its Cumberland Avenue store and move its operation to the Peters Road/Cedar Bluff area--a competitive move that has helped them broaden their base by taking advantage of the lucrative shopping mecca that is West Knoxville.
Still, says Luna, the big chain discount stores pose the biggest problem for the small bookseller. "It's very tough, period," she says. "The discounting seems to be very important to so many people. It's surprising to me how important a 10 percent discount is, say, on a $4.99 book to people, to where you sometimes wonder would they really drive a lot further to save 50 cents. but I know people are price-conscious. You just have to work really hard to be able to help the customer get the right book as quickly as possible and go beyond what other people are willing to do to do that."
Part of how Davis-Kidd does that is to maintain ample stock and to display an eager willingness to order, and quickly get in, any book currently in print that the store may not have--a service surprisingly lacking at most bookstores, large and small. Luna recounts, "I had a customer yesterday who'd been dealing with another bookstore because frankly, she said, she wanted to save time and money, but she couldn't find what she wanted elsewhere. It turned out we had every book on her list. And truly, a book is a book, whether they buy it here or Books-A-Million or Bookstar. And it's not just other bookstores; everyone sells books these days. Kroger, Revco, practically every store has some kind of book inventory."
Niche bookselling is another way of staying alive: inventories consisting solely of, say, children's books, pet books--or religious books. "This area is one of the highest per capita in the country for Christian bookstores," says Luna. "Many smaller stores just narrow their focus, find a niche, and manage to survive that way." It's either that, or else keep enough inventory on hand to provide a sufficient client base with what they want when they want it--a tightrope walk that may have been the downfall of some former Knoxville independent bookstores. "Apple Tree was the first good bookstore we had in Knoxville, and Draper's was excellent," Luna muses. "Maybe they weren't big enough."
Scratching a Niche
The two-story, upscale-rustic house on Mohican Drive just off Kingston Pike (which, ironically, was once the Draper Bookstore) has for the past year-and-a-half been home to the Best Little Cat House in Tennessee, a virtual cat boutique crammed full of cat toys, combs, brushes, collars, scratching posts, and litter-box screens; cat calendars, umbrellas, wrapping paper, doormats, jewelry, posters, pillows, hats, coffee mugs, windchimes, and books, including The Official Cat Codependents Handbook for People Who Love Their Cats Too Much. Brenda Johnson, former housewife and cosmetics salesperson and now the Cat House's proprietress, laughs as she winds her way around the seven free-range cats of assorted colors and sizes currently residing in the Cat House: "We do get a lot of crank calls, but most of them are sincere cat lovers."
Johnson explains that she opened her store because she found it so hard to find unique cat furnishings and accessories. "You can find all sorts of things for dogs, but not so much for cats," she says. "So I decided Knoxville needed a place like this. We thought it would be a good niche to try to pull something together." Johnson hopes eventually to expand into Oak Ridge and the Tri-Cities areas.
And business is booming. "Cats have surpassed dogs in popularity," she asserts, "and of course, Christmas is best time of year for most retailers. I definitely see an increase in sales over last year."
Interestingly, dealing with the more than 850 vendors who supply her stock is Johnson's biggest headache. "Most of the time we have to hunt them down, that's the hard part. We have really overcome that by just diligence, seeking people out who do deal in cat merchandise. Maybe one vendor will have a handful of cat items that I would want to carry in the store, and they deal with other things rather than just cats. If I could find someone who dealt only with cat merchandise or cat-related products, that would make it a lot simpler, but we can't do that because it's such a small niche."
You may be able to find the perfect rhinestone-studded collar for the feline on your Christmas list at the Cat House, but if you're looking for a covered cat-litter box or non-upscale cat food, you'll still have to go across the street to SuperPetz. "We don't carry the same brand of covered litter box as Wal-Mart, but we have a good product that we do carry, and it's substantial. We're just out of stock on that right now. But we offer more variety, we offer things SuperPetz never heard of, or even thought about carrying, because we are a specialty store for cats."
Johnson seems serenely confident of her niche, and dismisses the large competitors for the cat-loving public. "I don't even think of SuperPetz [which is located right across Kingston Pike from the Cat House, near Homberg] as a competitor. Wal-Mart will never know you by your first name. We get to know our customers, what they want, what they like, what their particular cat needs are. If they have a problem, we can either recommend what they do, or go to a vet, or find help for them in some way. Wal-Mart won't do that; Target won't do that. They don't have the know-how because they have so many other things they're interested in and carry, and for us, it's just cats."
A Toy Story
The shelves at Mark and Catherine Sheffer's store, The Toy Chest, are well-stocked with upscale playthings that look like they might actually have originated in Santa's workshop rather than the imagination of some mega-profit-minded Hollywood mogul. There are magic show kits, Brio building blocks, Playmobil playsets, non-electric train sets, and non-plastic, aesthetically-pleasing toys offered by Holz-Steckbox and Ravensberg and other Swedo-Germanic-sounding manufacturers. The collectibles there are minerals and fossils, not Barbies or Transformers. The rubber-stamp kits sold here might actually outlast Christmas morning; the puzzles are sturdy and feature nary a Disney character.
"This was basically Catherine's idea," Mark Sheffer explains between the ever-ringing bell on the store's front door and the ever-ringing cordless phone at his elbow. "There's just not any specialty toy stores in this area, and she got tired of driving so far out west [to Smart Toys, in Franklin Square] to get to one."
The Sheffers also didn't care much for the bigger toy stores and their dictatory domination of the market. "We like to keep things that Toys R Us wouldn't have. A lot of the brands that we have, they wouldn't carry, for whatever reasons," says Mark. Maybe because there's no movie tie-in to the well-made, but generic, stuffed animals that The Toy Chest features. Or maybe it's because Toys R Us has been so busy acquiring Baby Superstores, expanding its Kids R Us children's clothing stores, and fighting off anti-trust charges brought by the Federal Trade Commission that the world's largest toy retailer doesn't have the inclination to stock anything that's not Nintendo 64 or somehow related to Space Jam or 101 Dalmatians. Which actually suits the Sheffers just fine.
"It's good that they're there," Mark insists, "because they can stock the inventory and have things like the Tickle Me Elmo. That's the one everybody's panicking over this season."
The exclusivity factor works for The Toy Chest. "There really is a market for this niche; we've been surprised. Some of the companies [that we deal with] are very particular about who buys their products. Brio interviewed us first, to make sure we had the type of store they wanted to be in. It was a fairly tough interview, too. They wanted to know the other products we were carrying, and it was very important to them. They want to be known more in a specialty and educational toy store, like this environment."
The door rings once again, and soon two elderly women approach the front desk with gifts for their grandchildren as well as for two chosen names from a children's charitable organization. As he does the toys up in the store's complimentary gift wrap, Mark assures the women that if their selections fail to satisfy, they can be easily returned. It's a concept called customer service.
Did You Hear the One About the Traveling Salesman?
Paul Long has spent the last 42 years as a manufacturer's sales representative, selling furniture and lamps throughout the state to large chain stores and small mom-and-pop stores alike.
"It's tough now, it's real tough. Years ago, the independent mom-and- pop stores were owned by families. They weren't big, but they were all financially in good condition. But they've been disappearing like flies over the last ten years." The mom-and-pop furniture stores were once the basis of the business, says Long, but most of them have since been bought out by the big national chains such as Heilig-Meyers, based in Virginia (which bought out Knoxville's old Sterchi stores) and Rhodes Stores, based in Atlanta (which recently acquired Fowlers). "The big chains buy them out with offers they can't refuse," says Long. "A lot of them have tried to go on as family businesses but then just close up because they can't fight the big stores."
And the chain reaction of chain store buyouts ultimately trickles down to individual folks like Long. "It's affected my business, for sure. There are fewer and fewer accounts to call on, and you've got to have some of the big ones now to survive. But the chains cut their own deals with the manufacturers, which cuts me out." So when a furniture store chain--say, Heilig-Meyers--makes its own deals with furniture manufacturers, "all the buying is done in Virginia. The Tennessee man doesn't get anything at all."
It's a predicament Clyde Driskill of Newport knows all too well. Eighty-five years ago Driskill's grandfather and great-uncle set up their furniture store and developed first-name rapport with the local folk by selling them well-made, affordable bedroom and dining room suites. Three generations later, Driskill's Furniture Company is the oldest family-owned business in Cocke County, "but we're just hangin' in by our teeth," says Driskill.
It's not just the major furniture chains that are a threat. Sometimes the mere existence of a super discount store--say, Wal-Mart--that doesn't even pose a direct competitive threat in terms of merchandise can still create havoc for the moms-and-pops. "Fortunately, Wal-Mart doesn't carry much furniture," Driskill chuckles. "But they built a store in Newport, then moved on and built a Supercenter, and although that hasn't affected the particular items we sell that much, it has affected the traffic. [Locally-owned] stores are in the older part of this little town, and with the rerouting of traffic [toward the Wal-Mart], people don't go out this way as much anymore. And that means they don't get to pass by us."
In order to stay in the running with the big guys, Driskill says, they've narrowed their product lines and cut out promotional, or lower-end, merchandise. "We've always had a good reputation for customer service and taking care of what we sell. So now we try to capitalize on that reputation. It seems to be working very nicely."
Part of what keeps Driskill hanging in there has been a shrewd analysis of his client base. "In the southern part of our county, the Cosby area toward Gatlinburg and bordering the Smokies park, there's a rapidly developing population of retirement people. They come here with money and need to furnish their retirement or summer house, so we're gearing our advertising toward those people."
It's a good thing Driskill has been able to delineate a new market. "We've noticed there's not much store loyalty anymore," he says. "Here in Newport, especially among some people in the professional communities-- those who have disposable income over and above what most of us have--it seems to be sort of a status symbol to go to Knoxville and have a Fowler's or a Fielden's truck come to Newport to deliver what they buy. It's an ego trip."
Still, Driskill remains optimistic about the human longing for something out of the ordinary, and he hopes that will bring buyers back to his door, "Because you know, I think people are getting tired of being treated like cows, and everybody just doing the same thing all the time."