Perception is reality. We’ve all heard that and we all understand that. It’s like the old saying that if your neighbor is out of work, we’re in a recession. If you’re out of work, we’re in a depression.
A couple of weeks ago I spoke at a conference in Indianapolis for Christian retailers and suppliers. (Indianapolis in February. Now THAT was a smart choice on my part.) The retailers are primarily small, independent business people fighting a tough battle. Until a few short years ago, if you were looking for Christian books, bibles, music, apparel, or gifts, these stores were pretty much your best source.
Along came the successful Left Behind series of novels and movies starring Kirk Cameron, and later, Mel Gibson’s $612,000,000 mega-smash, The Passion of the Christ. All of a sudden God and Jesus became a lot more marketable and, naturally, big retailers took notice. Wal-Mart, Costco, Barnes & Noble, Borders, Amazon, and many other big stores broadened their offerings of Christian titles, music, and gifts. Good news for suppliers. Bad news for independent retailers.
Mega stores rely on discounted prices. Small independents rely on full retail. Mega-stores buy huge quantities. Small independents might buy a few hundred of a good seller. Needless to say, this made it extremely difficult for the Christian retailer. Suppliers were and still are delighted to sell to the big guys at massive discounts. And often, the giant retailers sell the product for LESS than the small guys can buy them for. How do you compete with these category killers?
I’ve heard the cry of "This isn’t fair!" from the Christian retailers for several years now, and I truly feel for them (I’m a Christian myself). But I speak and consult in a lot of industries, so for several years I’ve also heard the same cry from independent hardware retailers, outdoor power equipment dealers, independent secular book stores, independent music stores, and independent grocery stores.
In each of those similarly affected industries we’ve seen thousands of independent business owners go out of business, ostensibly because they couldn’t compete with the big guys. I say "ostensibly" because, at the same time, they haven’t disappeared completely. Stories abound of wildly successful small businesses in many different markets and industries. Speakers and authors, like me, revel in discovering those heroic examples so we don’t have to rely on the same-old Nordstrom, Fedex, and Starbucks stories that everybody else keeps using. (WE have to separate ourselves, too!)
What separates the successful survivors from the extinct? Well, it’s nothing magical and nothing we haven’t heard over and over. But based on my experience in Indianapolis, I feel compelled to list a few thoughts:
- You can’t win this year’s championship with last year’s strategy. Regardless of the industry, too many companies rely on a playbook that used to work. The world is moving forward at the speed of time with you or without you. Technology and plain old human ingenuity will constantly change the rules of competition. You’ve got to either keep up, move ahead, or be left behind.
- Change happens. People say they like change, but really they like it as long as it happens to someone else.
- Life is neither fair nor unfair. It is what it is. Like poker, people win with good hands and people win with bad hands. And like poker, people also lose with good hands and people lose with bad hands.
- Look for the white space. There’s always white space. Even Wal-Mart can’t be all things to all people.
- Rewrite the rules of competition. Why play by somebody else’s rules? Make your own.
Many (not all) Christian retailers see their situation as an industry issue. It’s not an industry issue. It’s an industry-wide problem affecting a lot of small retailers. That’s different from an issue. And the harsh fact is, the industry can’t fix the problem and go back to the way it used to be.
Hard? Oh yes. But hard is never a reason for not doing something. These retailers, like so many others in other industries, must find a new solution to their survival.