Small, local retailers battle hard for customers

Jenny Putnam was reworking a clothing display at the General Store in Minnetonka by placing books, coffee mugs and tea cups around some cozy women's fall sweaters.

"This is about more than selling a sweater," Putnam said as she stepped back and looked over her work. "It's about evoking the senses of curling up with a cup of coffee and a good book. We're creating a story and a feeling."

In a year when the closings of big-name stores have dominated the retail industry, small retailers like the General Store are surprisingly resilient. They survive, and sometimes thrive, by listening to what customers want and creating an aura in the store that makes people happier than clicking a "Buy" button online.

"Small retailers have a secret weapon. They're face to face and eye to eye with customers," said Pamela Danziger, market researcher and author of "Shops that Pop: 7 Steps to Extraordinary Retail Success."

Retailers do well when they cater to needs not met by the internet, such as immediacy, inspiration and an experience, said Mary Van Note of Ginger, a retail branding agency in Minneapolis. "Shoppers want a very localized experience," she said.

The General Store still sells locally sourced art by Twin Cities craftspeople, including one artist who's been supplying her work since the store opened 33 years ago. "We focus on what we can offer, not what Amazon can offer," said Putnam, who is also a buyer at the home decor shop.

Putnam said the store's owners and employees give customers an experience. "It's in the stories we create, the products we sell and the fun in the cafe," she said. "We hear a lot of people say, 'This is my happy place.' Maybe they buy something, maybe they don't, but they're in a better mood when they leave."

Maggie Mortensen, co-owner of North Aire Market in Shakopee, sells her company's soups to hundreds of small gift shops around the country. Many of the stores hold events to bring in customers.

"It's their lifeblood. They have to make the experience of shopping fun," Mortensen said. "It's more than ladies' nights. It's come meet Santa, a fundraiser for new band uniforms, a face-painting event or apple cider tasting." Food sampling is often a part of that, and North Aire is asked to provide free samples and door prizes, which they do in relation to the size of orders placed.

Such tactics don't always work. Ben Horn tried it all at FinnStyle, his home decor store in Golden Valley. He had a long mailing list of customers, partnerships with vendors and other stores, wine tastings, lectures and other events, and he and his staff constantly brainstormed ideas to bring in more people.

And yet, he closed the store this spring after 17 years to focus on his steadily growing online business. In hindsight, Horn wishes he had rotated the store's product selection and inventory more regularly. "People loved the store, but we didn't change the assortment enough to keep people coming back more often," he said.

Wendy Liebmann, chief executive of consulting firm WSL Strategic Retail: "You have to give consumers a deep experience. It's an emotional connection that's more intimate and less stressful."

Wendy Cormier of Elk River appreciates that about Jenson's Department Store in downtown Anoka. She's been shopping there for a decade and keeps coming back despite trying Stitch Fix, an online clothing subscription service. "The store is phenomenal," she said. "The selection changes often and my salesperson Lynn makes me feel like I have a personal shopper."

Cormier, 51, shops online quite a bit and is toying with the idea of buying groceries online. But she said Jenson's makes her feel special because the selection is so well-curated for its customers. "Hardly any stores have salespeople anymore who ask if you need a different size while you're in the dressing room. Jenson's does," she said.

Theresa Jaeger, a manager at Jenson's and a granddaughter of the founder, says the key to staying successful is that all of Jenson's retail buyers work on the sales floor to stay in tune with customers' needs and trends.

"That's when we hear about hiding flabby arms, necklines for a certain age, and little kids' socks that have to stay on," Jaeger said. "We're celebrating 80 years next year so trust me, you can't know those things if you only look at the numbers."

Clothing stores are particularly vulnerable to the internet, which has caused the decline or demise of department stores and independent chains. Billy Wermerskirchen, third-generation owner of Bill's Toggery in downtown Shakopee, said he takes the internet's and department stores' weaknesses and strengths and uses them to his advantage.

He's made regular customers out of guys who buy a suit on the internet and then come in to have it altered. He scooped up a Men's Wearhouse customer who was told it would be three weeks to get his suit pants hemmed. "People come in all the time because of something that got screwed up online or [at] a chain store," he said.

Wermerskirchen stocks many brands, but customers won't find Ralph Lauren or Nautica. "You see those brands in every mall and department store. There's no element of surprise there."

Greg Walsh, co-owner of Martin Patrick 3, a luxury men's and home furnishings store in Minneapolis, said he was approached by a local e-commerce group to add online sales. "We were resistant, but they promised great things." It didn't work out. "Nine out of 10 pairs of shoes we sold were returned."

They shook it off by launching a newly designed website that highlights the feeling evoked by the store's exquisite assortment of home decor, barware and menswear. Groups now ask MP3 if they can hold their fundraisers, birthday parties and showers at the store. Caterers with a liquor license come in and serve food and alcohol. "It's not a sales event," said Todd Fliginger, a salesman at Martin Patrick. "It's more like a big cocktail party, but people come back later and say 'I was at this event here and I need this and this.' "

Brick-and-mortar retailers large and small know that they have to continually evolve to stay in business. Ruth Kremer, co-owner of Kremer's Toy and Hobby in Albertville, said that staying on top is a never-ending process. She saw a discussion thread on a local online bulletin board with the topic question, "Why does everyone love Amazon?" One responder mentioned that Amazon Smiles donates 0.5 percent back to an organization of the buyer's choice for select purchases.

"That one took me by surprise," Kremer said. "I have significantly higher donations and sponsorships with local music and sports teams. I don't outline it in the store but I may need to rethink that."

Beyond such community involvement, many small businesses also spend more in their local community than bigger retailers do, said Stacy Mitchell, co-director at the Institute of Local Self Reliance in Portland, Maine. And they do so without the tax incentives often given to big-box retailers. "Business owners need to talk to elected officials about a level playing field," she said.

The General Store's Putnam said there's an even more basic form of community outreach that small retailers must do.

"Customers need to know that if they want to keep local businesses, they need to shop them," she said. "There's a time and place for online, but shop local too."