Resisting the Giants: Small Retail Entrepreneurs Against Mega-Retailers—An Empirical Study
B. Cotton, J.-Ch. Cachon
2007
Journal of Small Business and Entrepreneurship
Mega-retailers are widely criticized as causing devastation among smaller retailers, particularly in mid-sized markets in the United States. Others argue that small retailers can survive "in the shadow of the retail giants," by offering levels of customer service that the mega-retailers can't provide due to their very size. This paper reports the findings of an empirical study of the perceived impact of the recent opening of box-retailers, such as Costco and Home Depot on locally owned/operated
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... small retailers in the northeastern Ontario city of Greater Sudbury, Canada from 1999 to 2003. The sample included 78 smaller store owners, on average in oper ation for the last 21 years. Aggregate results confinned the hypotheses that small retailers suffered lower sales and clientele since the arrival of mega-retailers, and could clearly identity their and mega-retailers' respective competitive advantages and disadvantages as compared to each other. Respondents had a significant perception of having an advantage over their mega-competitors in the areas of Store Cleanliness, Value for the Customer, Products' Quality, and Store Layout. While a number of respondents suffered lower sales, about one-third of them (the Resisting Retailers) had average sales growth of over 21 %. Differentiation and Niche Marketing were the main aspects of a successful competing strategy adopted by resisting retailers against mega-retailers. Some of the strategic moves adopted by resisting retailers amounted to a "Vacuum Strategy," which includes the refusal to carry brands available at mega-stores, and the refusal to service such brands or to have anything to do with mega retailers, refusing any alliance with them and making it known to customers. SOMMAIRE. Les mega-detaillants se font souvent critiquer pour semer la ruine chez les petits detaillants, surtout dans les marches moyens des Etats-Unis. Certains, par contre, maintiennent que les petits detaillants peuvent survivre « a l'ombre des geants du detail» en offrant un service ala clientele qui n'est pas disponible aux mega-detaillants. Le present article presente les conclusions d'une etude empirique sur I'impact ressenti a I'occasion de l'ouverture recente de grandes surfaces telles que Costco et Home Depot par les petits detaillants de Greater Sudbury, au nord-ouest de I'Ontario (Canada), entre 1999 et 2003. L'echantillon comprenait 78 proprietaires de petits magasins, en service pour la plupart depuis 21 ans. Les resultats d'ensemble confinnent I'hypothese que les petits detaillants confrontent une baisse des ventes et de la clientele depuis l'arrivee des mega-detaillants, et identifient clairement, en les comparant, les avantages et desavantages concurrentiels des deux groupes. Les repondants avaient la forte impression de posseder un avantage sur leurs mega-concurrents dans ces domaines : proprete du magasin, qualite du service, qualite du produit, et arnenagement du magasin. Tandis qu'un certain nombre de repondants ont subi une baisse des ventes, environ un tiers d'entre eux (les resistants) ont vu leurs ventes monter en moyenne de 21%. La differenciation et la mercatique de creneau representent les principaux aspects d'une strategie concurrentielle fructueuse adoptee par les resistants contre les mega-detaillants. Certaines des actions adoptees equivalaient a une «strategie par Ie vide» consistant arefuser de vendre les marques disponibles dans les grandes surfaces ou de s'occuper de leur service apres vente, a eviter tout rapport avec leurs concurrents, et a faire connaitre leur demarche aleur clientele.
doi:10.1080/08276331.2007.10593391
fatcat:ghevly5epjavzpcgxcg3nr4fxe