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Making peace with big-box retailers PDF Print E-mail
Written by MARK JAEGER   
Wednesday, 16 November 2011 18:16

UW-Extension experts tell local business owners that coexistence is possible

Conventional wisdom says that the arrival of big-box retailers on the local business scene is the beginning of the end for small downtown retail districts.

According to statewide experts who spoke last week during the final session of the University of Wisconsin-Extension networking series Revitalizing Wisconsin’s Downtowns, those commercial obituaries don’t need to be written just yet.BIG-BOX RETAIL stores, such as the Target and Home Depot stores in Grafton, have changed the way many Americans shop. A recent networking session focused on how downtown businesses can work with the large retailers.                     Photo by Mark Jaeger

In fact, the speakers during the program titled titled “Working with Big-Box Stores” said mom-and-pop stores can coexist and even thrive in communities that have become homes to big-box retailers.

That is good news for communities such as Port Washington and Saukville, which has recently seen the opening of a revamped and expanded Walmart store, and Grafton, which has witnessed economic boom times with the arrival of such large national retailers as Target, Home Depot, Shopko and Costco.

“Big-box retailers account for the largest share of retail sales in the United States, with four out of five Americans saying they have shopped in a big-box store in the past year,” said Errin Weltry, an economic analyst with the Madison redevelopment consulting firm Vierbicher Associates.

Rather than fighting the marketing power of those retail giants, Weltry said, locally based businesses and Chambers of Commerce should devise strategies to work with them.

“Not all big-box retailers are created equal. Of course, Walmart is the 300-pound gorilla that everyone thinks of when you talk about big-box stores, but the opportunity is there to develop a relationship with the local store manager and collaborate on ways to make them blend better with the community,” she said.

One such opportunity for local producers is to get big-box store managers to become a part of a “buy local” campaign, Weltry said.

Another beneficial approach, she said, is to establish cross marketing, where local shops are not afraid to refer customers to big-box stores for products they don’t have in

stock, and the staff at big-box store knows what specialty niche items are carried at nearby shops but not at the big retail location.

In addition, Weltry said developing a relationship with big-box managers can give smaller businesses access to some of the wealth of information gathered by the marketing departments of the national stores.

It is also important to understand the different business models big-box stores operate under.

“When looking to a big-box store for donations, it is important to remember that they tend to plan one year in advance so it is often difficult for them to participate in local programs that aren’t set well in advance,” Weltry said.

“Big-box stores, especially Walmart, have been hit pretty hard in the media, but they usually want to be seen as part of the community. They just need a longer timeline. These partnerships, if you can get them off the ground, can give your downtowns a lot of influence.”

UW-Extension associate professor and community development educator Dan Kuzlik has been spearheading a partnership campaign in Rhinelander between its central downtown businesses and a cluster of big-box retailers on that community’s east side.

The point the Rhinelander business owner have been stressing with the big-box retailers: “A strong, vibrant downtown makes the whole community strong, and their stores even stronger.”

The collaborative groups is looking into posting cross-reference signs directing shoppers to the different retail areas.

Kuzlik said it is easier to form bonds with big-box stores if they have a stable management team.

“If there is a lot of turnover, it is difficult to expect the managers to feel like part of the community,” he said.

However, he said, cooperation can often be gained with big-box managers if the local business groups can note how many employees live and shop locally.

Local business, too, can take a lead from big-box stores, said Weltry, noting that the latest research shows 60% of retail purchases are made after 6 p.m. That is important because big-box stores tend to have extended hours, and if local stores want to tap into that flow of business they need to consider extending their hours.

Nancy Hundt, the retired Grafton Area Chamber of Commerce executive director who attended last week’s UW-Extension program, said nurturing relationships with big-box managers has had mixed results, but has been beneficial for the community.

“A lot of communities in Ozaukee County are envious of the development of big boxes in Grafton, but having them has been a challenge for us, as well,” Hundt said.

Getting national retailers to become, and remain, active members of the Chamber has not been easy, she said.

New stores often have managers assigned to them who specializing in starting up operations, and are reassigned once the store is functioning well.

“In Grafton, we’ve been very fortunate with big-box managers. Unfortunately, the higher-performing managers also tend to be promoted and transferred out of the community,” Hundt said.

She said it is worth the effort to establish relationships with the staff at the local big-box store to promote events and programs in the business district.

“If we can get their customers to visit our downtowns, everyone would benefit. You are probably talking about 10,000 people a week, a group about the size of Saukville, coming into our business district,” Hundt said.

UW-Extension community development educator Nicole Sidoff moderated the local networking sessions and was encouraged by the positive reception they received.

“The primary benefit that I observed was the productive and thought-provoking dialogue amongst attendees that followed each program,” Sidoff said.

“I was most impressed with the general sentiment amongst attendees that the communities within the county should work as one entity to promote this movement and attract visitors to the area.”

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