Valley's small retailers fight for slice of holiday pie | Crain's Phoenix

Valley's small retailers fight for slice of holiday pie

Stinkweeds has operated for years as an independent record store at 12 W. Camelback Road in Phoenix. | Photo courtesy of Stinkweeds

The holiday shopping season is here, and consumers are opening their wallets, forking over an average $1,000 this year, according to one forecast.

But in this era of big-box stores and online shopping, local retailers in the Phoenix area have to work hard to stand out. As one area purveyor of specialty goods says, shoppers want "what's different and unique about this city."

"They don’t want to go to the mall and see the same 10 stores you see in every other city,” adds Joshua Hahn, co-owner of Phoenix General, which specializes in locally sourced jewelry, housewares and clothing made from natural fibers.

Hahn and co-owner Kenny Barrett handpick products that are ethically created, sustainably sourced and, most importantly, evoke a modern desert aesthetic. Hahn says that part of their mission is to highlight the eclectic, desert lifestyle, which is something that sets them apart from chain stores and online retailers.

There’s also the tactile element, which can only be experienced the old-fashioned way – in person.

“I think our customers will still shop online,” notes Hahn, “but they’re also looking for the in-store experience that you can’t get with online shopping. You can’t touch the fabrics, you can’t smell the candles. You can’t experience that online.”

Hahn is confident that his store features the kind of items that are hard to find elsewhere, given their desert motif. And since so many of his goods are crafted locally, they would be difficult to impossible to find on a major retailing site.

“We’re not buying for a national brand that has stores across the country. We can specifically choose for our customers. We know what they are looking for," Hahn says. "We’re natives of Phoenix and Arizona, and we know that the desert is trending right now.”

Phoenix General operates out of a 1,000-square-foot space that opened in June 2016. Hahn says his primary challenge is getting enough foot traffic and getting customers to shop locally, rather than first heading to the mall.

“Boutique shopping can be difficult for some people because there’s less selection,” he says, “but you never know what you’re going to find.”

Hahn says Phoenix General is preparing for a big influx of customers Thanksgiving weekend and a significant increase in sales. An estimated 69 percent of Americans – about 164 million people – plan to shop during Thanksgiving weekend, according to the National Retail Federation’s annual survey. Shoppers nationwide will spend an average of $967 this holiday, up 3.4 percent from last year, says an annual survey conducted by Prosper Insights & Analytics.

“You won’t find the crazy 'door-buster' deals here like you will at Best Buy, but there are some things that we’ll do," he says. Holiday promotions are important in drawing customers and Hahn says they will be employing a variety of them to help boost sales.

“We’ll be having Black Friday, Small Business Saturday and Cyber Monday sales,” Hahn says. “We’ll also have surprise deals throughout December. We have a bit of a following online, so our out-of-state customers will be able to benefit from those sales as well."

While Black Friday is an important day for many retailers, Kimber Lanning, owner of Stinkweeds, an independent record store in Phoenix, doesn’t believe that applies to everyone.

“Do I think it’s the most important day of the year? Not so much," Lanning explains. "I think it’s the beginning of a monthlong, elevated shopping experience for most folks in the country. I do think it’s an important day, but I think it gets blown out of proportion.”

Lanning has a unique perspective. She is also the founder of Local First Arizona, a nonprofit that celebrates independent, locally owned businesses.

The organization supports, promotes and advocates for a strong local business community by raising public awareness of the economic and cultural benefits provided by thriving local economies.

“I think the importance of Black Friday depends on what industry you’re in. When you think about the psychology of Black Friday, you don’t usually go out and buy stocking stuffers," Lanning says. "If you’re selling TVs or refrigerators or even cars, I think that’s when people rush out, looking for the big-ticket items that are going to be on sale on that particular day."

Stinkweeds has new releases that come out on Fridays, including Black Friday, but the record store doesn't start getting really busy until later in December.

Lanning sees advantages for small, locally owned mom and pop stores over their larger competitors. Namely, knowledge of their local customers and providing superior customer service.

“What I’m seeing nationally is that we’re dividing into two camps,” states Lanning. “There are those who focus mostly on convenience and those who focus mostly on relationships."

Shoppers who place a premium on the experience and want to know who they’re doing business with tend to choose small, locally owned businesses, she says.

"They’re doing so at a much higher rate than anyone imagined 10 years ago," Lanning says. Recent statistics bear that out. In a Coldwell Banker Commercial Affiliates survey released this month more than 40 percent of U.S. adults said supporting local small businesses is important to them and nearly half said they prefer to make purchases in-store.

In Lanning’s estimation, there is generational support for locally owned businesses and those shoppers are voting with their wallets.

“Active baby boomers are the ones going out and significantly investing in the culinary communities across the country. Then there are the millennials, who have a conscience and a drive to know where their money is going," she says. "They recognize that if they support locally owned businesses, they’ll build cooler communities and be more civically minded.”

What about the challenges of operating a mom and pop store in the current retail environment?

“The media tends to repeat the story about the death of mom and pop stores, over and over,” states Lanning. “Yet the recent studies coming out show that mom and pops are faring better than chain stores. That’s because chain stores aren’t offering the convenience of Amazon, nor the exceptional experience that a mom and pop can offer"

Lanning knows the advantages that small, local stores have, such as knowing what her customers want. Equally important, she knows about their families and their lives.

“It’s about having relationships,” Lanning says. “It’s about knowing my customers. When they want to sell their records, they come to me because I’m going to give them more than anybody else in town. There are people who have been coming into my store for over 30 years who now come in with their kids. I know their stories.”

Lanning offers a unique holiday promotion at Stinkweeds. The store will accept gift cards from Walmart, Target and Best Buy and let customers redeem them at face value for its products. Once the store validates that the card is good, it’s treated like cash for the purchase of music. As Lanning sees it, this serves a couple of purposes.

“As we accumulate those cards, we use them for items that we need to run our business throughout the year. I might buy toilet paper at Walmart and print supplies at Target. Our customers think it’s the coolest thing ever. It’s about building rapport with them, but it’s also very strategically pulling money out of the music departments at those big chain stores."

November 15, 2017 - 6:51pm