Vt. stores battle online retailers for business
By Greg Elias
As the holidays approach, Vermont’s small retailers decorate their stores, stock inventory and bolster staffing, bracing for a few weeks that can determine the entire year’s profitability.
In the past, small stores competed with each other for shoppers’ dollars. These days, the fiercest foe can be a website instead of the store down the street.
Small retailers play David against online Goliaths in the battle for holiday customers. Increasingly, shoppers open their laptops rather than visit local merchants.
Online price and convenience are hard to beat. Amazon carries millions of items in dozens of warehouses sprinkled around the country; a small store has space for a tiny fraction of that inventory.
Still, the little guys are fighting back with a variety of strategies—attentive service, flashy displays, local products—to attract and keep customers.
The Gardener’s Supply Co. store in Williston aims to awe customers with displays that evoke holiday spirit, notes Debby Decker, garden center supervisor.
“It’s breathtaking when you walk in the store,” she said.
Others meet online competitors head-on. Lenny’s Shoe & Apparel, which has five stores in northern Vermont and New York, including one in Williston, has embraced the Internet to extend its reach, according to marketing director Amanda Cashin.
“We view our e-commerce store as a sixth storefront that compliments our physical store locations,” she explains in an email. “We have many loyal customers that drive many hours to shop with us, and they enjoy the convenience of shopping at our e-commerce store and supporting our local business.”
Capitol Stationers in Montpelier has shifted away from office supplies and now caters more to tourists and residents looking for small gifts and Vermont-made maple syrup and candy, says co-owner Kent Bigglestone.
“We’re kind of a country store spiel,” he says. “That’s what our focus is now, a little bit more toward the touristy look.” Bigglestone emphasizes that the store still sells office products but acknowledged that they now account for only about 20 percent of sales.
Holiday sales and online competition varies
Not all merchants are heavily impacted by online competition. Some sell items that customers prefer to personally experience instead of browsing website photos.
Kathie Cooke, co-owner of The Paper Peddler in Williston, said her store has seen little if any effect from online competitors. Her stock includes Vera Bradley handbags and Chamilia jewelry in addition to greeting cards, stationary and candy—products that may sell better in a physical store than a virtual marketplace.
“It’s important to be able to touch and feel what they’re actually getting and see the quality of the item,” she says.
Cooke monitors online prices to make sure the store is competitive. But The Paper Peddler’s boutique flavor tends to draw customers who are looking for a few special gifts rather than a bunch of presents at the cheapest price.
Other small merchants like Capitol Stationers have been hit hard by the rise of Internet commerce.
The company was founded in 1950. Back in its heyday in the 1970s and ‘80s, it operated as many as seven stores and was one of the state’s largest office suppliers.
Competition from chains such as Staples and online vendors forced the business to downsize to just a single location in downtown Montpelier. Kent Bigglestone says the store relies on holiday sales, with about 30 percent of the year’s tally racked up in the six weeks before Christmas.
Not all merchants are so dependent on the holidays. As its name indicates, Gardener’s Supply mainly sells products used during Vermont’s short growing season. “Our Christmas is in May,” Decker says.
Still, the holiday shopping season is critical for most small retailers. George Malek, president of the Central Vermont Chamber of Commerce, said up to 40 percent of annual revenue can be generated during the period, although that proportion varies wildly depending on the type of business.
Overall, online competition is increasingly winning the holiday sweepstakes. The National Retail Federation’s latest annual holiday survey found that the average consumer planned to do 46 percent of shopping online this year. That proportion has risen steadily and is now the highest in the survey’s 14-year history.
The money at stake is significant: Each consumer will on average spend $805.65 during the lead-up to Christmas, Hanukkah and Kwanzaa, the survey found.
Where the customers are
These days, nearly all businesses have some Internet presence—a basic informational website, a Facebook page, a buying portal. But most of the small merchants interviewed for this story said they still make most sales at their physical stores.
At Phoenix Books, co-owner Michael DeSanto said online sales are a barely measurable fraction of their total business, despite a website that allows customers to search for and purchase titles.
As for competing with Amazon, DeSanto simply says his business, which operates stores in Essex, Burlington and Rutland, is willing to cede patrons who seek only the lowest price.
“If you are a customer and you are driven by the mirage of saving money online, then off you go,” he said. He instead focuses on book buyers whose motivation goes beyond money.
“People have a nice experience when they come in,” he says, adding that customers can visit the coffee shop at the Essex location and get advice from knowledgeable employees.
DeSanto said Phoenix also emphasizes efficient service by rushing not-in-stock books to customers within two days. That matches the two-day shipping offered to Amazon Prime members.
Gardener’s Supply is an outlier among the businesses interviewed. Decker says that catalogue and online purchases comprise 90 percent of sales. So the Internet doesn’t pose the competitive threat it does to other retailers.
Still, she says attentive service at the employee-owned company helps keep patrons coming to the Williston and Burlington stores. She notes that employees see customers as their own because they literally are.
Home for the holidays
An underlying issue faced by consumers weighting whether or not to shop locally is the economic impact of their purchase. Advocates for buying local say money spent locally boosts employment and tax revenue.
Malek speaks passionately on the subject. He said one dollar spent at a nearby store might turn over four or five times, with the money “swirling around the community.”
For example, Malek says a local retailer may use his profits to hire more employees. Those employees spend their paychecks on mortgage, car and utility payments. Then a utility worker might buy something from the store, completing the circle of commerce.
Malek points to recent reports that Amazon is hiring 100,000 temporary holiday workers, noting that those employees could instead be working at small retailers.
He acknowledges that some Vermonters might find jobs associated with Amazon’s transactions, such as delivering packages for FedEx. “But obviously, the more local the purchase and the more local the purchased items,” Malek says, “the more that money stays in the community and gets on our merry-go-round.”
DeSanto says that Phoenix Books employs 30 people and tries to be a good community member by participating in school book fairs and giving discounts to local libraries. Amazon, he notes, has no such local connections.
“I wish people understood what they were taking away from their own community when they hit that send button on the computer,” he said. “I’ve likened it, harshly, to stealing from yourself when you do this.”
Buying local can also strengthen social bonds, Malek says.
“It’s nice to go in and see people who are your neighbors or your friends or that married your brother-in-law,” he says, reenacting a typical encounter: ‘“Hi, haven’t seen you in a while. How’s it going?’
“Those are tough conversations to have on Amazon,” Malek says.