Hard times in the shops

My friend Nan is worried. One of her favorite shops in downtown Boston might be closing. She likes the shop assistants, with whom she’s become friendly. She likes seeing her neighbors at the shop. She is annoyed that the Internet has eroded the shop’s business.

And it isn’t just the Internet that is a threat. For a number of years big box discount stores have undercut small local businesses in price, and some small businesses have failed because of it.

More recently, the Great Recession, as one wag recently has called it, has made it hard for businesses large or small to succeed.

So with this triple threat, how can our small, local businesses survive?

Nan had gotten me worried too, so I checked in with Scott Latham, a professor of business strategy at Bentley University. He does research on recessions and small businesses with 25 or fewer employees.

His first responses struck fear in my heart.  “Recessions hit small businesses harder than larger businesses,” he said. “They are three times as likely to fail as a larger business.”

Moreover, he said, this recession is particularly bad for small businesses since it is being driven by consumers who stopped spending rather than businesses, which caused the 2001 recession as they pulled back after the 9/11 attacks, while consumer spending was still maintained.

But his news wasn’t all bad. He said that small businesses could survive by employing a few effective strategies.

Retail shops can carry unique items that are expensive to ship and hard to find elsewhere. That strategy has helped Blackstone’s on Beacon Hill and the Flat of the Hill, two gift shops on Charles Street, but didn’t work for Comptoir de Famille on Newbury Street.

Small businesses can never compete with the Internet or big box stores on price, said Latham. But they can offer services the big or remote sources can’t.

He suggests that owners of video stores, which are finding Netflix and Comcast’s offerings hard to match, can sponsor independent movie showings in the back of the store. Or they could throw in a bag of popcorn with every movie rental. They could increase the level of service, with a ‘rent one, get one free’ kind of offer.

A hardware store could offer workshops on how to paint or how to put up drywall for the do-it-yourselfers who are surely on the increase and won’t get much help or good advice from most sales people in the big box stores.

One of the big laments in downtown Boston is the decline of the independent bookstores, and Latham recognized that they’ve basically all gone. But he said that independent bookstores can still succeed. Willow Books in Acton has been successful, he said, because they are community activists, holding read-ins, hosting book clubs, and installing a café. There is a bookstore, the Toadstool, in Peterborough, New Hampshire that also thrives. They have taken advice like Latham’s to heart and do all the things Willow Books does. They are one of the centers of the community, where you can always find someone you know. Moreover, you don’t have to go to a computer screen to search for a book. “Do you have a book—I don’t remember its name— but it has an armadillo in its title, I think,” I recently asked the woman behind the counter.

“You’re probably thinking of ‘The Elegance of the Hedgehog,’ ” she answered.

She was right.

You can’t do that on a computer screen.

Latham said that small businesses should be careful about cutting prices, even though it is tempting to do so. “It’s a prickly path,” he said of that strategy. It’s hard to return to your usual pricing if customers have become used to paying less.

One advantage our small businesses have that Latham didn’t mention is the protection that comes from density and lack of parking. We, the customers, don’t like to get in our cars, if we have one, to buy the things we want and need.

So while we might still go on the Internet on a Sunday night at nine when the shops aren’t open, we’ll still shop locally because we’re lazy, and it is so easy.

Nan is still worried about her quality of life, and how the shops she loves contribute to that. These shops bring ease and convenience and also support the sense of community that she values.