Amazon, Walmart and big-box retailers can’t kill all local retail: Private Intelligence – Crain’s Chicago Business

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In the past 50 years and more, local downtown merchants have been fighting off competition coming in one wave after another—from Walmart and Costco and the Dollar Store, and then more recently from online powerhouses like Amazon.  

At 82, Arnold DeLuca has been advising independent merchants along with their chambers of commerce going back to the 1960s and has a deep perspective on the changes they’ve endured. For years he was a newspaper executive selling advertising to local retailers and showing them the way to prosperity in the process. For the past three decades he’s been the president of Dynamo International in Wheaton, a small-business consultancy, and written a half-dozen books on marketing. An edited conversation follows. 

Crain’s: Some people are born entrepreneurs. You were one of those? 

DeLuca: I wasn’t very good in school growing up in Chicago and later Park Forest, but I always seemed to have the ability to make money. I got the idea of selling Sunday newspapers on Sunday mornings to people leaving church services, and sold them by the truckload. I organized sock hops for kids in high school, and moved on from there to represent blues bands and large orchestras to play proms and country clubs—at the age of 17 working from my bedroom at home. Going through college I sold ad space for penny shoppers and at one point earned $48,000 a year and was wearing custom-made suits and driving an English sports car. I had the knack.

Suburban Chicago in the ‘60s and ‘70s seemed to have newspapers in every small town. You worked for more than two decades for one of them, the Wheaton Daily Journal, from the ‘60s through the ‘80s as general manager. Most, including the Journal, are gone now. Will we ever see new papers started up again?

Yes, I think we will. Right now most investors are buying up papers just to break them down and make money. They really have no interest in journalism. But people still care about local government and nothing covers that better than the local paper. Eventually I think they’ll come back in a higher-quality format—looking more like magazines, perhaps, with splashy color. The writing may be contributed more by part-time reporters rather than expensive full-time employees. And they won’t just be online publications; you miss too much of your audience by limiting yourself to the digital world. 

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Lots of retailers have failed in the past few decades in old downtowns. Why?

Store owners spent far too much time fighting their city councils to keep Walmart and the others out, instead of figuring out ways to co-exist. Many were hopelessly out of step. In the 1960s we had a paint store in a prominent western suburb, for instance, that would close for two weeks in the middle of summer so the family could go on vacation. Stores closed at 11 a.m. on Good Friday so people could go to church and stay closed all day Sunday. Essentially retailers back in the day wanted to sell when it was convenient for them, not for their customers.

What did the survivors do right?

You have to have a niche today. If you don’t specialize in something, people have no reason to visit you. Glen Ellyn has a store that sells nothing but olive oil, but very good olive oil, and is successful at it. Elena’s Cucina on Lake Street in Roselle is a deli that makes its own sausage and is constantly busy. Freddy’s Pizza in Cicero makes its own bread from scratch and has lines out the door and down the block, even though the neighborhood has transitioned from Italian to Hispanic. They once had clerks who spoke Italian, but now they’re speaking Spanish. 

How does the little guy go up against Amazon?

Copy some of Amazon’s strengths. It will deliver many products the same day they’re ordered. Remember when drug stores delivered prescriptions? Most got out of the habit and customers no longer had a reason to stay loyal to them. Binny’s Beverage is delivering liquor now and beating the bigger Internet competition. 

It seems that small merchants are often weak on service and other essentials.

People wonder why men’s stores all went out of business. We had a men’s store in downtown Wheaton for years where the windows were so dirty you couldn’t see the merchandise inside. The owner was a cantankerous old guy who didn’t care much about his customers. He deserved to go out of business. 

That paint shop that would once close in summers? They got religion and started opening up each day not at 9 but at 6 a.m. so contractors could stop and get their products on the way to their job sites. They offered coffee and donuts and even started delivering to job sites. They started working together with other merchants in town and presented themselves to shoppers as a sort of open-air mall. That paint store is still there today.

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