Are Brick and Mortar Stores an Endangered Species?

Is the ‘Traditional’ Brick and Mortar Store Becoming Extinct?

I hope everyone had a wonderful Labor Day Holiday. In the past, (as a former specialty store owner myself) I would have been working all weekend, promoting a ‘Labor Day’ Sales Event. Television ads, radio ads, and print ads in local newspapers would have been de rigueur. But then again, that was over ten years ago…and a lot has changed…especially the mediums that would comprise a successful marketing/sales campaign. That should be obvious in this the age of social media…but for some it is not.

Many brick and mortar stores are still using the ‘traditional’ advertising/marketing mediums (tv, radio, print), and the overall results have not been that pretty. Many friends (specialty store owners) who had been in business for decades, are no longer. The internet has changed everything…

Are brick and mortars an ‘Endangered Species’?

To answer this correctly, we have to look at the scientific definitions of evolution and extinction.

From Wikipedia: Through evolution, new species arise through the process of speciation-where new varieties of organisms arise and thrive when they are able to find and exploit an ecological niche…and species become extinct when they are no longer able to survive in changing conditions or against superior competition.

I believe that the traditional brick and mortar specialty store is an endangered species. By ‘traditional’, I mean that stores that are continuing to operate the same way they have always operated, without adapting to the new business paradigms, are in real danger of becoming extinct.

The internet has changed everything. I know I just stated this in the paragraph above…but it bears repeating…over and over again. Let’s go back to Wikipedia for a moment for another definition: ‘Functionally Extinct’

A species may become functionally extinct when only a handful of individuals survive, which are unable to reproduce due to poor health, age, sparse distribution over a large range, a lack of individuals of both sexes (in sexually reproducing species), or lack of adaptability to changes in their environment.

Let me restate …’Traditional’ brick and mortars are functionally extinct already!

The internet has changed everything. (There’s that statement again!) Well, it has…and it has actually spawned (through speciation…see above) a new species of brick and mortar specialty stores. A species that will not only survive this challenging and changed business environment, but thrive as well!

The outlook is rosy for those willing to adapt and embrace these new paradigms.

Now I am not saying that it is easy for brick and mortar stores to keep abreast of the changes in the market, and then adapt and embrace….I am saying that those who do this will be able to thrive. The rate of the change is accelerating, and this means it is harder than ever to keep up with these changes. This is an extremely daunting task when you are an owner/operator of a small specialty store. You are already wearing all the ‘hats’, and time is so very precious. A lot of times this leads to a ‘crisis management’ style of operation…spending all your time putting out fires, handling issues and problems, and there is little or no time left to take a broader view of your business and ascertain and execute the plan of action that will move your business forward. That is why I am proposing something ‘old’ as a solution to this problem.

There is always strength through numbers.

In the late 1940’s, the auto manafacturers figured out that it was in their best interest to help their new car dealers succeed…so they formed ‘20 Groups’. (click here for a short history of 20 Groups) Members of these groups have continued to thrive even through all the economic changes for over 60 years.

I know there are many specialty buying groups in the juvenile and toy industries, as I was a member of one such group, NINFRA, and am still a member of ASTRA. In fact, I served on the board of NINFRA for several years. I was a great experience, and yes, being a member of this group was very helpful to my business. As a group we were able to secure discounts from manaufacturers, but more importantly, during annual meetings and at various trade shows, members would network with each other and discuss all aspects of business. I found these informal networking sessions were extremely valuable, as information and ideas flowed freely. Since we were all in the same business, there was nary a problem or issue that one of us hadn’t faced at one time or another…so there was always an abundance of solutions offered to anyone’s individual issue. The only problem was that these informal sessions were just that…informal.

There is always strength through numbers, but what ‘number’ is ideal when it comes to strength and efficiency? An issue with the buying group is size. Our buying group had about 100 members, and the members’ stores were all different sizes in all types of towns and cities. It was difficult for all members to relate to problems or issues faced by individual members…especially if their operations were vastly different. The reason the automobile dealer ‘20 Groups’ work is that the size of the group is limited, and members are all non-competing, yet similar in size and market structure. When the members of a group are all very similar, the group itself is more relevant to each individual member…making for a strong and efficient group.

It is almost guaranteed, no matter what kind of problem an owner might face, chances are someone in their peer group has already dealt with that problem successfully. While new ideas can generate powerful returns, each member learns from the collective experiences of the entire group by swapping best ideas, benchmarking financial performance, solving member problems and holding each other accountable for achieving performance goals. As a store owner, you no longer have any reason to feel alone and isolated. Participation in a structured peer group will not only help you realize your goals, it will reduce overall stress, keep you from going down that ‘crisis management’ rabbit hole, and put you ahead of the curve.

Think about this…you probably know 10 to 20 other specialty store owners that are similar to yours in size, market and operations. Why not form or join a structured peer performance group and start reaping the benefits?