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Six must-dos for retail success vs. Amazon

USA TODAY logo USA TODAY 11/1/2017 Rhonda Abrams
Pam Hammond. © Rhonda Abrams Pam Hammond.

“Sometimes, I feel like I’m in a Nancy Drew mystery. I just wish I had her little roadster.”

Pam Hammond, owner of Paddington Station, the “eclectic emporium” in Ashland, Ore. — certainly seems like a grown-up version of the clever, perky girl sleuth, faced with one challenging dilemma after another. Today’s biggest mystery for small business owners like Hammond, especially small retailers? Surviving against aggressive online sellers, especially Amazon.

“Retail is so interesting right now because all the rules are changed. How we were doing business five years, 10 years ago is so different from now. But that’s what keeps us motivated, excited and so far, successful.”  

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And successful Hammond is, in spite of fierce online competition. Since 1993, when Hammond and her then-husband Don (still her business partner), opened their gift and kitchen shop, they’ve expanded to three stores.    

They arrived in Ashland by way of L.A. There, new mom Pam was making about once-a-month trips to New York City when her toddler daughter "curled up into the suitcase to go with me since I was gone so much."

"That was a wake-up call," she said. So the couple "decided to get out of L.A.” and ended up in Ashland, where they thought they'd run a B&B. But then a Realtor showed Pam a struggling gift store in a beautiful historic building on Main Street that was for sale.     

“We were the third owners. Sales had gone down about 75%, and it was about to go out of business. This was 1993," she said.

Getting their business off the ground was quite the challenge: "We had the gift shop on the main floor, a restaurant in the basement and a sandwich shop on the mezzanine. I had two part-time employees. My husband didn’t move up because we still needed his income in L.A.”

So, how does Pam Hammond manage to thrive in today’s retail environment with so much competition?

Here are six keys to Hammond’s — and other small brick-and-mortar retailers’ — success:

1Change your product mix. Hammond found more interesting and “eclectic” gifts and clothes, added kitchen wares and books, and eliminated the restaurant and sandwich shop. Identify items that sell better in a physical setting and have decent profit margins.

2Delight your customers. Hammond goes the extra step. Her stores offer complimentary gift wrap, have ice water on hot days, and she makes sure every customer is greeted warmly. Customers should feel a special connection with a local retailer to keep them coming back.

3Try new things. ““We will always surprise you with what’s in the store,” Hammond says. “You can always expect to buy a spatula, a birthday card, a toy. But it will…be a new type of spatula, the best $20 kid’s birthday gift. You can always expect something new.”

4Change with the times. Hammond has started experimenting with ‘pop-up’ stores in high traffic areas, such as community events. And she keeps up with technology, social media marketing, and more.

5Be willing to fail. “I believe in mark downs if it’s not the right product,” said Hammond. “Mark downs are not the sign of failure — if you don’t have mark downs, you’re not trying enough.”

6Build relationships. Hammond, her employees, and her business are an integral part of the Ashland community. She’s active in the local Chamber of Commerce, various non-profit organizations, and two percent of their preferred sales go to local non-profits.

Today, Hammond has three stores (Paddington Station, Paddington Jewel Box, and Inspired by Oregon), 35 employees, and expects to reach $4 million in sales in the next 18 months. She says that 60% of sales come from locals — not tourists — demonstrating the loyalty they’ve built up with local shoppers.

“We’re a family business. We want people to feel like we’re part of the community . . . .  So customers know, ‘If I shop here, I’m supporting my community.’ I think my customer understands they need to support the community if they want us to still be here. That’s an extension of the shop-local movement.”

Rhonda Abrams is the author of 19 books including Entrepreneurship: A Real-World Approach, just released in its second edition. Connect with Rhonda on Facebook and Twitter: @RhondaAbrams. Register for Rhonda’s free business tips newsletter at www.PlanningShop.com.

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