Is Retail Still Worth It?
10/31/2013 8:29 AM
|Info Graphic from GreenUpgrader.com |
There are so many great reasons to shop local and yet I find myself wondering…
Is retail still worth it?
From a consumer aspect, I wholeheartedly believe in shopping local, so I go out of my way to do just that. According to the 3 50 Project, for every $100 one spends at a locally owned independent store, $68 stays local through payroll, taxes, and other expenditures. If you look at the infographic above from GreenUpgrader.com, they say that even more dollars stay local: $78. I know that when I shop local I matter more to the retailer and the customer service is likely to be much better. For this reason I launched “shop local” campaigns in 2010 with a Facebook page promoting local businesses and events. The page now has more than 5,500 followers.
Needless to say, I am impassioned about local business. And yet, daily, I grapple with the notion of keeping our showroom open for extended hours. Our showroom is clean, modern, and something to be proud of. When we moved to our current location in 2004, we designed the space to be more of an “experience center” than a place to shovel in equipment. It works well when we bring clients through or host an event. As we all know, nothing sells like the experience itself, and that is what the showroom is designed around.
During normal business hours, I have no reason not to keep the doors open to the general public. But with the advent of “all-hours” (or most hours) places like Wal-Mart and Best Buy, does the need for locally extended hours still exist?
What do we sacrifice from our lives to be here just “in case” on a Saturday afternoon? What might we gain? A TV sale? Does that even pay for the electric and the labor hours? As profit eroded and larger stores popped up, is it financially viable to hold the “extended hours” battle line? When I look at my best clients (who really keep my doors open) none of them have ever just “stopped in;” they either call first or make an appointment. The ones that do stop in tend to be the time-wasters. Not all of them, but many people don’t think twice about draining you for knowledge before they buy something online or at a big box store for three dollars cheaper. This is the society we’ve created, hence my “shop local” campaign to remind people why it matters as a broader concept more than for myself. Ever notice that the customers you make the least on eat up the most time and need the most attention?
I reached out to CEDIA to see if their benchmarking survey could enlighten me. Out of the 60 participants, only 15 had retail operations. I’ve always thought that having a physical location equaled higher overhead. According to the survey, that wasn’t the indication, as the difference was only 0.3% higher for those who had a store. Operating profit was only a 1% difference in favor of those who had a location. Employees in this study with no retail location made the company more revenue and we’re paid more money. In other interesting news, participants with retail locations had over twice as many commercial projects, as well as more projects all together. Yet these projects tended to be smaller than those companies without retail. What surprised me most about the benchmark survey is the lack of difference between companies who have retail locations and those that don’t. Maybe, just maybe, it’s bigger than the stamp in the ground. Maybe running a solid business is the way forward.
One must take a step back and evaluate how his or her time is best spent. Where are your strengths and weaknesses? This is tough. We get lost in taking out garbage, answering the phone, paying the bills, explaining refresh rate, and everywhere else. What we need to be doing is keeping an eye on the bigger picture, the industry, and what we need to do to keep our business afloat.
What would I call my company today? A hybrid. I believe in a diverse portfolio, and this saved us after 2008. We are small enough to change with the tide, and strong enough to ride it out. Our foundation and history may lie in retail, but our backbone is the custom install.
Is retail still worth it? I see no reason not to have the doors open while we are here, and less of a reason to stay after hours with each passing season.
Do you have a retail location? What do you think? Tell me in the comments section below.
Heather L. Sidorowicz is project manager/designer for Southtown Audio Video in Hamburg, NY.
3 comment(s) so far...
By Bob Lieto on
11/1/2013 7:15 AM
Re: Is Retail Still Worth It?
I think you have touched on exectly what I have been weighting in my mind for so long. We have been in business for over 26 years and have seen the tide turn a couple of times. I still believe that our services to the REAL customer, the one with a true interest in knowing what is best and where things are headed, are priceless for they not only get what is current (and that could be found on the web)but what the experience of being an integrator and custom designer would recommend, and THAT comes with time and experience which cannot be gotten on the web. The local guy is still on top of that area.
By Scott Huffman on
11/1/2013 2:46 PM
Re: Is Retail Still Worth It?
Very good topic! We are just about in the same boat as you but we also do car audio. At least 80% of our retail traffic is car audio and the home staff helps with phone support and grabbing car sales guys by the ear from a smoke break every now and then. I have often wondered if a retail store would be viable without the car audio. I am picturing tumbleweeds rolling through the showroom. One of my goals is to reduce the number of televisions on display by 1/3 or maybe even half within the next 6 months. Way to many low margin flat panels on display. Thanks for the excellent article!
By TimmyS on
11/19/2013 11:04 AM
I think that retail CAN be effective but at a high cost that most cannot afford!
One of the ways that I think AV retail can be effective is with a decidedly lifestyle setting. No Wall-O-TVs and cluttered pegboards need apply. Warm inviting colors and materials with products displayed as they would be in the home. Destination location with complementary store neighbors. Killer demos. And the appropriate back end to support the sales. Oh I could go on....but it is a dream....