There was a time when there were only two kinds of stores to choose from: Department stores and specialty stores. Department stores were defined by massive footprints, either as mall anchors or in downtown marquee locations, carrying a dazzling assortment of categories, spread out over multiple floors. Specialty stores were basically defined as everything else, mostly small footprints, with a much more narrow target market and a merchandising strategy of carrying a deeper assortment of specific product categories, if not a singular one (ie. shoes). There were quite a few varietals of specialty stores; independent stores, small chains of stores, locally-owned community oriented stores among others. I remember performance being compared only between those two categories of stores.
The very notion of labeling them “Specialty” was the connotation of being “special”, “unique” and “precious”. Stores back then were highly independent and either curated an assortment of brands in a unique manner or created their own private label to combat those brands and retain pricing and gross margin control. Some stores tried to create a hybrid assortment of national brands and proprietary white labels. It was an exciting and vigorous time, especially for the burgeoning off shore manufacturing industry.
Then several transformations happened. First, the Wal Mart started expanding across the continent; followed by the large format “Big Box” transformation with the requisite rise of the power centers; followed by the burgeoning growth of mega chains and their cookie cutter stores and hence the over-built mall industry; followed by value concepts such as dollar stores (which now number in the tens of thousands); and most recently followed by the internet avalanche. Obviously the landscape of the industry has shifted with about the same amount of impact as when the tectonic plates shifted to create Mother Earth’s 7 Continents.
But how do we really define the concept “Specialty Store” today? It’s not an easy question to answer. Obviously, there is nothing “special” about a chain store that is one of 800-1000 across the Continent. That type of store is disqualified from our new definition. But what is the cutoff point – is it 300 stores? Does the Urban Outfitters family of brands qualify because they were circumspect and kept their concepts to relatively smaller number and hence rarer across the landscape? Or are they also disqualified since they have become nationally known regardless of store count?
How do we measure “special” in today’s retail climate? Is it a single store? Is it a small chain of stores spread out across the country so that it is the only one of its kind in a particular city or region? Is it an independently-owned store as opposed to a corporately-owned conglomerate parent? Is it a locally-owned community based store as opposed to one whose head office is in another city or even country?
My sense is that a “unique” and “special” store has to bestow an unmatched consumer experience in a particular city or region to be considered a “Specialty” store these days. The service levels need to feel intimate and personal; the consumer experience needs to exceed expectations when it comes to assortment, fit (for apparel and accessories), quality, store environment and store policies (including a generous return policy). It has to be technologically agile and if they have a website, it needs to be linked to the store and vice versa so that the experience is friction-less, as well as being mobile savvy and relevant.
I have always been partial to “Specialty” stores and assuming their uniqueness is preserved and continually enhanced, those that are now part of today’s more narrowly defined group are the ones who will survive and thrive in the current and upcoming transformations of the retail industry.