Wednesday, February 2, 2011

Is Bigger Better?

A small hardware chain (Ace or True Value, I don't remember) aired a great radio commercial a few years ago poking fun at the big box super stores. In the commercial the poor customer, who was trying to find his way around one of these big Home Depot type places, desperately asked the indifferent store clerk where he could find a hammer. "Aisle 166" answers the clerk, "the next bus leaves in ten minutes from Housewares." That may not be the exact dialogue, but you get the idea. I can't help wonder just how big these stores can get. Is there a point of diminishing returns where size actually becomes a disadvantage? If there is, we must be close to reaching it.

Don't get me wrong, I appreciate the great selection of products and low prices in places like Home Depot, Lowes, Walmart, Stop & Shop and Ikea, but there are times when I wish they did run buses in the aisles because the item I need is always a ten minute walk away. The other issue is that sometimes you can have too many choices. I've done a lot of painting around the house and even I am constantly amazed at the specialized painting products they offer. I think they have a brush just for edging around aluminum bathroom windows! My father's entire tool and home maintenance kit fit into a large Maxwell House coffee can.

Then there is the variation in the caliber of staff in these places. When Home Depot started out, one of their selling points was that employees in each department were experts in the products sold there. And that was true in the could be confident that that kindly looking gentleman in the orange apron could tell you anything you needed to know about tile grout. Not so any more. When you open so many stores there are just so many experts to go around. The suburban stores are pretty good, but the inner-city stores (where these chains are learning there is money to be made) draw on local kids when they hire. Now this is great for the local economy, but when you ask them a question, their eyes glaze over and they immediately start the search for somebody who knows the answer.

I think of all the mega stores, Ikea is my favorite. First of all, they don't saturate neighborhoods with stores on every other corner, so the quality of their help is usually good, inner-city stores notwithstanding. Their products are attractive, durable, and most important, especially for young couples just starting out, affordable. They cleverly display their goods in a room setting so that you can see how that sofa would look in a real home with all the finishing touches. Of course you're so impressed by what their decorators have done that you are tempted to buy the whole room, and many customers do just that. Smart people, the Swedes.

I also like their on-site cafeteria where you can get a good basic bacon and eggs breakfast for 99 cents, coffee extra. They also serve lunch and dinner for the convenience of shoppers. I had a little tiff with the Ikea store in Elizabeth, N.J. recently over having to wait in line for an hour to pick up some replacement parts only to find out they weren't in stock. I wrote a letter of course, (its what I do) and the store manager sent me an apology along with an invitation to enjoy a free dinner for two any time. Although I haven't told my wife yet, I think I'll cash in that offer for a romantic Valentine's Day dinner.

Bottom line, things go in cycles. When the big box stores over saturate the market, small store owners will look for ways to fill a niche and draw off some disgruntled customers. (Is the opposite a "gruntled" customer? Nothing to do with this blog, but words interest me.) For example a new chain called Save-a Lot offers greatly reduced prices on store brands...up to 40% over supermarket prices for comparable items. Their stores are typically 20,000 sq. ft. compared to 46,000 for the average supermarket. Fewer brands, less shelf space translates into grocery bill savings and people are responding. That's called Capitalism folks, and you know what, it works!


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