Retail and restaurant check up surveys
From the University of Maryland Small Business Development Center:
- Retail Check Up
- Restaurant Check Up
For awhile, w has been after me to write about the various closings of independent retailers in DC and the area. (e.g., Trover Shop, see "Trover Shop Bookstore Closing on Capitol Hill After 51 Years" from the Post).
And I have been particularly intrigued by failures in the Gateway Arts District in Prince George's County (see "Arts district's Artmosphere café to close" and "Hyattsville store for area artists to close May 31" from the Gazette) as well as what we might call "whining" from a store in Takoma Park (the store will go unnamed) about lack of support from nearby residents (but some of this theme is present in this article about Culture Shop in Takoma DC from the Post, "Struggling to Give D.C.'s Takoma Park a Shop All Its Own").
Plus, there is the article in the Post a couple days ago about galleries on 14th Street, "Other 14th Street NW Galleries Could Close in Wake of G Fine Art" -- and this article from when the space opened, "Making a Gallery Space Its Own Work of Art."
Over 10 years of trying to figure out retail revitalization, from the standpoint of the business proprietor, I understand far better today that it is very risky to be "first in" to a commercial district. It's very difficult to be a pioneer, to try to sell items that need to draw upon a "retail trade area" that is far greater than that present close by, in an area that otherwise isn't a draw.
This is especially hard for businesses that focus on "gifty stuff" since people make these kinds of purchases infrequently. (Still, I like the idea of the 3/50 initiative, to spend $50/month in 3 local stores. See "3/50 Project encourages consumers to shop at local stores to help keep them in business" from the Cleveland Plain Dealer.)
Of course, it's way easier to be a pioneer when the rents are low. But in any event, the margins are tight and the industry is competitive, so if business drops even a little, it can be a problem. And as industries change (books sold online, digital photography means not printing photographs, printing from outsourcing to laser printers, etc.) it's even harder for certain retail categories to succeed, independent or not.
And in DC in particular, rents are high because property is valued higher generally, because of the impact of the city's central business district's commercial office space on the property tax assessment methodology on the entire city. (See "Testimony -- Historic Neighborhood Retail Business Property Tax Relief Act" -- note that DC's elected officials keep ignoring the points that I make on this issue.)
Rents in DC's marginal commercial districts far exceed the rents asked in relatively thriving by comparison commercial districts in Philadelphia (South Street), Baltimore (Hampden, Federal Hill), and Richmond (Carytown).
Sure someone like Jon Schallert says create "destination businesses," and he is absolutely right. But it is difficult to build a destination business that will draw people from hundreds of miles, if the place where your business is located has many other issues (such as crumbling buildings and other issues, see "The "soft side" of commercial district competition").
This article from the Journal of Antiques and Collectibles, "Destination or Pass-by Business" discusses the difference between being a destination retail business vs. working to attract passersby.
When there is no there there, being a pioneer business is hard. And when rents are high, you have little margin for error.
And the retail industry is brutally competitive, as many national and regional retail chains are in bankruptcy (Ritz Camera, Eddie Bauer) or closing altogether (Linens n Things, Circuit City, Smith & Hawken), and many companies have stepped back on expansion.
Many independent retailers aren't particularly sophisticated, so this is why using systematic checklists to "stress test" their businesses is particularly helpful.
Off and on over the past few years I have been building my own kinds of metrics. See:
-- Why ask why? Because (on store operations and systems)
-- Indepependent retail businesses can succeed and thrive.
From the latter entry:
Our unfriends at Reason Magazine (I say unfriends because they publish anti-transportation screeds with undue regularity) have a halfway decent piece about successful independent retail stores, in "Big Box Panic." Slate Magazine also had a story on this in terms of Starbucks not killing off the independent coffee shop, "Why Starbucks actually helps mom and pop coffeehouses."
The Reason article chalks up the success to "localization, customer care, and authenticity." But I think that the hidden agenda of the article is to denigrate legislation putting restrictions on chain stores, which is part of their general pro-extremely large business anti-government regulation agenda.
Further, the article misses the point in determining why independent retail can be successful. It isn't just "localization, customer care, and authenticity" but a fully realized concept, and robust store operations systems. (Not to mention financing.)
Independent retailers (and restaurants) without fully realized concepts and weak operational skills and systems fail with great regularity. See the discussion thread in this entry from Frozen Tropics, "BYT: The Pie Man Cometh," as an illustration.
My experience with a myriad of retail and restaurant failures I've witnessed in DC is that for the most part, it comes down to the fact that they didn't have fully realized concepts and their skills and systems were weak or nonexistant. (Or they were in the wrong commercial district to begin with.)
------------------------------------------------------------------------------------------------Principles for creating complete concepts/identity systems for retail businesses*
• Understand the needs, preferences, habits, and aspirations of the target audience.
• Good design sells. It is a competitive advantage. Design is systems and processes, not just graphics.
• A disciplined, coherent approach leads to a unified and powerful brand presence.
• Create a distinct position and complete identity for your store/concept.
• Experience and study the competition and learn from their successes and failures.
• Understand traffic flow, the volume of business, and economic considerations of your location.
• The storefront is a mass communications medium that works 24/7 and can attract new customers, influence purchasing decisions, and increase sales.
• Logo and signage expresses the brand and builds on understanding the needs and habits of users in the environment.
• Exterior signage must consider both vehicular and pedestrian traffic.
• Design an interior space that is sustainable, durable, easy to maintain and clean, and is energy efficient.
• Consider the dimensions of space: visual, auditory, olfactory, tactile, and thermal.
• Understand the pyschological effect of light and lighting sources.
• Consider the needs of handicapped customers and those of different ages.
• The shelf is the most competitive marketing environment that exists.
• Align merchandising strategies with displays, advertising, and sales strategies.
• Create an experience and environment that makes it easy for customers to buy, and that inspires them to come back again and again.
• Create an environment that helps the sales force sell and makes it easy to complete a transaction.
• Align the quality and speed of service with the experience of the environment.
• Benchmark the quality and speed of service against the competition.
• Consider all operational needs so that the store delivers on the brand promise.
• Anticipate future growth. Measure, evaluate, change. Constantly ask: is the message clear?; is the content accessible?; is the experience positive?
* This table was built from the section on "creating touchpoints" from Designing Brand Identity (second edition) by Alina Wheeler