Retail, Small Business & Startups, and Technology

The shop versus the Internet

August 31, 2012
| By Pete Daly |
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After 10 years of learning the retail business hands-on at Urban Outfitters in Chicago, 33-year-old Jenny Van Veen said she had the “visual merchandising skills” and the vision necessary to open her own store, Frances Jaye, a women’s and men’s boutique that opened in downtown Holland in late August.

“I always wanted to open my own store,” said Van Veen, who grew up working in her mother’s store in southeast Grand Rapids.

Frances Jaye will offer women’s and men’s apparel, accessories, gifts, books and knick-knacks, and Van Veen said she also expects to sell vintage clothing from the 1970s and 1980s.

Van Veen said her store at 50 E. 8th St. will have a “very intentional layout,” including vintage displays in the window and use of thrift shop tables and salvaged pieces. Frances Jaye will “combine classic, casual and fun aspects of style to create a unique shopping experience in downtown Holland,” according to Van Veen.

But this approach is not just a whim.

“It’s so easy to go online and do all your shopping now,” Van Veen said. “The store has to be an experience; otherwise, the physical store space isn’t necessary anymore.”

Indeed, many merchants with an investment in bricks and mortar now find themselves actually victimized, to a small degree at least, by merchandisers whose “store” resides on someone’s computer screen.

Since Internet sales began, “It’s been tough for the retail businesses because it’s never been a level playing field,” said Barb Stein of Rockford, who owns Great Northern Trading Co. and has been in the retail business for more than 30 years.

Great Northern Trading Co. has been in business in downtown Rockford since 1977. Stein is also the board chair of the Michigan Retailers Association.

Internet merchandisers “don’t have to pay sales tax, so we’re already at a 6 percent disadvantage,” said Stein. “They encourage customers to go into stores and look at merchandise, pick out the merchandise they want, and then come to their website and buy it for less than the merchant is selling it for. Amazon does that all the time.”

Stein mentioned a friend who sells musical instruments and strives to provide excellent customer service to help him keep his customers. Sometimes, he’s just providing a free service, however.

“He has people come in, and they figure out exactly what musical instrument is suitable. They get to try it out, and then they walk out of the store and buy it online because they can buy it for less,” said Stein.

Stein said she is fortunate that her store mainly offers high-end gifts, home furnishings and decor, products more suited to impulse purchasing than electronics and other commodity products that usually require some education and comparison shopping. And, of course, when a lot of people are shopping for a gift, they need it right now.

Van Veen aims to make visiting her store a visual experience that will keep customers coming back — and Stein said that could make all the difference.

“I think that you have to have merchandise that attracts the customer’s eye. You have to find new and innovative merchandise; you can’t be carrying the same thing that all the big box stores are carrying and that you are seeing online,” Stein said.

“Look for the newest things, buy them, sell them — and the minute they start appearing online or at the big box merchandiser, get out of that line and go to the next new thing. I think that’s where a small business can stay ahead of the curve and stay fresh,” said Stein.

There was a time when big box stores were seen as the primary villain in the demise of sole proprietor and mom-and-pop stores, because big chains, with their huge volume, can undersell the little guy every time. But now, even big box stores are being clobbered by Internet marketers, with Best Buy being a prime example. In late August, Best Buy had to withdraw its full-year earnings guidance after a disastrous second quarter, which saw a 91 percent drop in profits.

According to a report in the Washington Post, half of the problem for Best Buy is a weak global economy, but the other half is a continuing shift in consumer shopping habits, with big stores becoming unprofitable as more customers use them merely to shop around and decide on what to buy. Then they buy it online at the lowest price they can find that day.

Staples, the office supply big box, and Barnes & Noble bookstores also are said to be hurting, for the same reasons as Best Buy.

Van Veen is a native of Grand Rapids, where her mother had a shop on 29th Street SE called Art Folk, offering hand-made crafts and gifts. Van Veen graduated from Calvin College with a degree in business communications and then relocated to Chicago. She went to work for Urban Outfitters as a district merchandiser who managed the displays for 11 Urban Outfitter stores in Chicago, Wisconsin and Michigan.

“I learned the visual side (of marketing) through working for them,” she said.

Van Veen said it was her “dream job,” but after 10 years, she felt it was time for a change and the perfect time to launch her own retail store. Her initial challenge was deciding where to locate it, and the options included Chicago as well as West Michigan. She did a lot of research, talked to other West Michigan entrepreneurs, and finally chose the location in Holland, which was most recently a DeVries photo studio.

“There’s nothing like downtown Holland,” she said, adding that it has a “unique” main street in the large percentage of independent retailers located there. “There are so few places left like downtown Holland,” she said, adding there is a lot of pride in the downtown business community.

Van Veen said she obtained a line of credit from The Bank of Holland to start her business and describes that bank as “awesome” to work with, praising its willingness to support local business.

In the latter half of August, Van Veen was putting in long hours getting her shop ready, with help from her parents and siblings.

Despite the long days and late nights at the store and being constantly on the fly, “it doesn’t even feel like work,” she said.

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