Chris Ottis of the Lousiville Courier-Journal writes about how local record stores are able to compete against the increasing corporatization of music stores and online downloading services. In short, they do it by product and service differentiation, particularly adjusting the breadth and depth of its product/market scope to meet local market conditions, the personalization of the customer relationship, and a recognition of the inherently social nature of shopping, especially for hedonic goods.
When there are so many other ways to get music, Louisville independent record stores said they survive by offering customers an atmosphere created by music lovers rather than corporate strategists and by having a deeper selection than chain stores or even Internet sites.
"We try to compete on service and selection," said John Timmons, owner of ear X-tacy, Louisville's biggest independent record store. "That's what separates us."
Workers at independent stores seem more passionate about listening to music than about selling it.
And they pride themselves on helping customers develop their tastes.
Damien McPherson, who manages Underground Sounds, said he considers himself a bartender of music.
"I'm going to ask you, 'What do you feel like? Do you feel like something hard, something soft? What's in the CD player right now?' " he said. "I'm going to find you something cool."
Customers won't find that "from a guy in a polo shirt at the mall," he said.
This article explains as well as any why and how it is that small, local retailing firms are not doomed when large, corporate retailers enter their markets. There are advantages to scale, but there are also liabilities and inevitable blindspots. As such, there will always be profitable niches to be exploited by local retailers with knowledge-intensive, customer-focused, business models, niches that the big players and their polo-shirted sales staff can not or will not serve.
See Also
Apple's iTune Music Store Australia