Earlier this month, Barneys filed for bankruptcy, joining a growing list of other large retailers to file in recent years including Toys “R” Us, Radioshack, Sears and Sports Authority. Another story in the Guardian newspaper last week reported that tourists in NYC are surprised by the shuttering of retailers. What's going on?
Despite the headlines, retail remains a viable business option in Portland (and Oregon) and an exciting opportunity for many would-be business owners. Leslie Hildula is senior advisor and program facilitator for the Retail Business Builders program offered by the PCC Small Business Development Center this Fall and offers her perspective on why now is actually a great time for retailers to put their shingle out – despite recent headlines.
Why are so many of these big retailers failing?
Some of these big name retailers were venturing into business arenas outside their core business. They took on debt that weighed them down and made them less nimble. In some cases they paid more attention to increasing the short term income of executives and shareholders and not enough to the basic needs of their customers and front line employees and the long term health of their company.
Regardless of size it's important that retailers stay nimble. Customer demographics can change over time. The way that customers want to buy, and communicate with a store, can change.
How do these large failures affect smaller retailers?
Small retailers have an advantage over larger ones in several ways. Number one is the ability to have relationships with one's customers. To do business with them over a long time and know what they're looking for and feeling. The second advantage is the ability to move quickly without a great deal of bureaucracy slowing down decision making.
Are these closures bell weathers for small business? Why or why not?
The lesson here is that a well known brand can lose its way. If it disappoints its customers enough times even the most loyal ones will fade away. Also, sound financial management matters regardless of size. At the end of the day it's the amount of profit you bring home not the amount of sales.
What is the changing face of retail in Portland?
We can't afford to be mediocre. It's too competitive. You need to give your customers an enjoyable and informed shopping experience that is easy and efficient, online or in store. Ideally a customer wants to buy from a store both ways; in person where they can ask questions, touch and try-on merchandise and online, where they can order what they want at midnight wearing their pajamas.
What types of retail opportunities exist in Portland?
Everything is possible if done at the right level and you're offering something that customers truly want.
Can you give an example of a successful retail business that is thriving in Portland? (not just Portland. Beaverton, Hillsboro, Astoria, etc)
Beanstalk, Red Castle Games, Garnish, Five Star Guitars, Thunderpants USA, North Street Bags, Paloma, Speck's Records & Tapes, Fang, Tilde
How can a new small retail business prepare to enter a challenging market?
Know how you will stand out from the competition. Prepare to offer the complete shopping experience and do it well. Prepare yourself financially by having a business plan with a good forecast.
What advice would you offer a small business owner struggling with their retail business?
Get help early and often. Utilize other's expertise. Accept that you may need to modify your concept --- your business plan--- to survive.
What can prospective small business owners expect to learn from your Retail Business Builders program?
From soup to nuts, how to start and run an online and brick & mortar store. The program breaks down the critical components of opening a retail business and provides practical how-to’s for making the right decisions when you’re just starting out. You’ll learn from successful local retailers, retail subject-matter experts, and work with seasoned retail business advisors.
Click on the image below to watch Leslie and other business advisors interview local Portland retailers about their experience working with the PCC Small Business Development Center and the Retail Business Builders program (among others) to launch and maintain their brick and mortar operations in Portland: