Finding Their Niche Local Small Business Are Seeing Ways To Meet The Heavy Competition From Large Chain Stores

To small, longtime Spokane Valley businesses, the footsteps of giant chain stores coming to town might sound intimidating.

But despite the larger buying power and advertising budgets of these companies, small stores don’t have to consider themselves squashed.

“How to compete is don’t compete with them,” said Ray Murphy, executive director for the Valley Chamber of Commerce.

“If you’re a Volkswagen, don’t get in a race with a Corvette,” he said.

“Find your niche and service the devil out of the customers.”

Larger stores have greater buying power and are able to pass along discounts to the general public, said Joe Ward, who owns Pinnacle Realty and specializes in commercial real estate.

However, small businesses can find similar products that big chain stores don’t carry, or offer the same type of product in greater depth.

“They have to change with the times,” Ward said. Small stores should focus on providing outstanding customer service.

Ward said that big stores that rent large, expensive spaces try to provide a variety of products at a low cost.

“Labor issues are the significant component of price,” he said.

Employees hired at or near minimum wage will “be less likely to understand the products,” Ward said. “They can tell you where it is, but that’s about it.”

On the other hand, the owner and longtime employees at Valley stores such as University Appliance & TV have experience with the products.

“That’s his living,” Ward said of owner Bill Tonani. “He’s been in it for a long time, he understands the product and can help meet the customer’s need.”

University Appliance & TV produced a TV commercial emphasizing that earlier this year.

The store’s reaction to increased competition is simple, said manager Byron Dunn: “We’ve been doing what we’ve been doing.

“We can offer service, and offer the local ownership, rather than giving them a 1-800 number and having them deal with someone in Tucson.”

Valley Best-way, founded in 1968, is local - right down to the name.

Since it opened at 11921 E. Sprague, large chain stores such as Eagle Hardware and Garden and HomeBase Home Improvement Warehouse have opened in the Valley.

Emphasizing top service is part of what’s keeping Valley Best-way in business, said president Cecil Cleveland.

“We just do things differently,” he said. “We do not do exactly what the chain stores do.”

He said that his store offers personal service, through employees who are familiar with the products and who help customers quickly.

“You have to take care of people,” Cleveland said. “People still shop with people, not companies.”

Murphy said Valley Best-way is a good example of how service counts. Customers “keep coming back in spite of the fact that they can go someplace else,” he said.

Donna Lenertz, marketing director for University City Shopping Center, said that competition with the mall’s tenants has been increasing.

“It’s so tough because you can get almost anything at stores like Target,” she said.

“To become everything to everybody is not only difficult, but not profitable for smaller merchants,” she said.

Instead, small-store managers can foster personal contacts with customers, through keeping a customer database and sending direct mail.

Store employees know the customers’ names, where they live and their interests, Lenertz said.

Large chain stores also advertise through direct-mail, she said, “but they do it by blanket mailing, whether we come to their store or not.”

“Stores at U-City mall do a real good job of marketing to their existing customers,” she said. “People come here for (good service), and for specific items they can’t get at stores like Target and Shopko.”

But no matter how good service is, the bottom line counts for many customers. Small-business owners argue that they don’t necessarily have to charge higher prices.

“The big boxes make the image that they’ve got low, low prices,” Cleveland said. “They spend all of their money trying to get that across to people.”

However, he said that a comparison of 100 or so similar items would show that Valley Best-way’s prices are competitive.

“We don’t have 5,429,000 pieces,” Cleveland said. “We do have enough to do the job.”

Locally owned stores also have less bureaucracy to wade through to make changes that customers want.

Cleveland said that if enough shoppers ask for an item the store doesn’t carry, he’ll make sure it’s ordered.

Customers who support neighborhood businesses may also feel like they’re contributing to the community,

“They have employees that work here and live here,” Cleveland said of small businesses.

“The management team lives here and works here. If there is a profit to be made,” he added, “it stays here.”