Osceola Sentinel Tribune, IA
02-01-07
Locals discuss how to compete in post-Wal-Mart business climate
by S-T Staff
If you build it, they will come, the movie cliche says.
In the case of Wal-Mart, expected to start construction on a nearly 100,000 square foot building west of town perhaps as soon as March, some local retailers may be asking, “Will they keep coming?”
Wal-Mart announced plans late last year to build a new Supercenter at the intersection of Highway 34 and Interstate 35. The store is expected to employ between 175 to 200 people.
American State Bank sponsored a business workshop Monday night, hoping to educate local business owners about how to work and compete with the retail giant. About 55 people attended the workshop.
The bottom line: Competing against Wal-Mart won’t be easy, but it’s not impossible and small businesses can survive if they can differentiate their business, products and services.
“Competing against Big Box retailers is an awesome task. So don’t try to do it alone,” says a “Between the Aisles” magazine article titled, “Big Box Super Stores: How can independent retailers compete?”
“Form community partnerships with non-competitor retail stores. Share information and experiences about what marketing techniques work with customers in your area....No idea by itself is a magic bullet, but all ideas together, applied in a consistent manner, can bring forth results that will give independent retailers an enhanced position against the competition in today’s market,” the article states.
Jeff and Patrick Edwards, owners of Osceola Farm and Home and Knoxville Farm and Home, have been there. When Knoxville’s Wal-Mart announced a store there in 1999, their family-owned business was located on the opposite end of town.
Their dad had his own Wal-Mart philosophy: “If I have to compete against Wal-Mart, I want to be right across the street from them.”
And that’s what the family-owned business did, though it took months to meet that end.
Jeff Edwards said they re-evaluated their business, adding some products and services, including letting customers rent power equipment. He urges local businesses to experiment, try new things and don't be afraid to admit failures if you try something and it doesn’t work. At Knoxville Farm and Home, he said, they tried servicing Wal-Mart’s lawn mowers, but stopped after it didn’t work in soliciting new customers.
“The fact is Wal-Mart will create traffic,” Jeff Edwards said. “If you play your cards right, you’ll get a chance to get a crack at those customers when they come to town.”
It’s all about marketing, customer service, being knowledgeable about the products and giving the customer something they cannot get at a big box store, including in-home installation, delivery or other value-added services, they said.
“The easy days of retail are going behind us,” Patrick Edwards said.
Another warning: Don’t engage in price wars with Wal-Mart. Be in the ballpark, and give the customer a reason, such as quality, for buying your product.
The two-hour workshop at American State Bank also included presentations from Curt Borcherding, of Boyt Harness Co. in Osceola, and Dave McLaren, Southwest Commmunity College’s Small Business Development Center director. Borcherding talked about his experience in selling Bob Allen Sportwear to the retail giant. McLaren offered small businesses help, including how to differentiate local services and products.
Kevin Klemesrud, executive vice president at American State Bank, said he wanted local business owners to be able to draw on experiences from other local business owners on how to approach the post-Wal-Mart business climate.
“It’s different for every business when it comes to what they’re going to have to do,” he said.
And some may not survive. Leon resident and business owner Marilyn Saxton worries about the small retail businesses there. Saxton, her sister, Marcia Stone, and Alan Couchman, all attended Monday’s workshop. Saxton's family owns McGahuey Implement in Leon, and said they have already implemented some of the business strategies discussed. While she thinks their business will be OK, she worries about smaller stores in Leon closing.
“It’s pretty much the way of the world,” Saxton said. “You got to be on the offensive instead of the defensive.”
Another educational workshop about the effects of the retail giant is set for 7 p.m. Feb. 19 in the Clarke Electric Cooperative meeting room with Iowa State University Professor Ken Stone. Osceola Chamber-Main Street and Clarke County State Bank is sponsoring the discussion with the economics professor.