New Title Looks at Category Killers

After Robert Spector's 1995 book The Nordstrom Way became a top seller, the author became somewhat of a customer-service guru: He parlayed the book's success into a follow-up title (Lessons From the Nordstrom Way) as well as speaking engagements across the U.S. and around the world -- including appearances at BookExpo America and regional bookseller conventions. It's been 10 years and counting, and he's still traveling and talking about customer service.

"It's so ironic," Spector said. "I was the worst worker of all the Spector cousins and children [at my parents' butcher shop]. My dad would get a huge kick out of this." He might also enjoy the appreciative way in which Spector mentions the family business in his newest book, Category Killers: The Retail Revolution and Its Impact on Consumer Culture (Harvard Business School Press).

Though Spector may have avoided taking his turn at the cash register, he closely observed the practices his parents put into place as they dealt with their customers -- and managed to thrive despite a changing retail landscape. "Neither of them got past eighth grade; this is not a sophisticated marketing plan we're talking about. They had a mom-and-pop butcher shop, and they found ways to be special. They sold specialty ethnic foods, and did business in three or four languages" with their clientele, primarily fellow Eastern European immigrants.

The importance of building strength through specialization is a theme in Category Killers. Spector asserts that category killers (Home Depot, Barnes & Noble, Borders, Wal-Mart) will continue to loom large in the retail landscape -- even as they change the way cities are arranged, money is spent, and store owners do business.

He said, "This is the most dynamic period in retail in American history because there are so many things happening in so many places at the same time." For example, he noted, "There is the stereotype of a Wal-Mart the size of several football fields, located out in the sticks and killing downtown areas. Part of that is true; on the other hand, Wal-Mart is in Los Angeles, it will be in Chicago.... These big-box retailers are re-gentrifying neighborhoods. Retailing is the thing that always brings people back. Retail and restaurants become reasons to have a neighborhood."

In addition, he said, "the classic shopping mall is going through major changes because we don't have as many department and anchor stores. There is the emerging concept of a lifestyle center, which creates more neighborhoods.... Malls are no longer the walled-off fortresses you can't see from the outside. Lifestyle centers are smaller, and there are different mixes of stores." For example, he pointed out that someone who shops at the upscale department store Nordstrom one day will go to Target the next day. "Before, it was apples and oranges -- you wouldn't think of mixing those kinds of stores."

Indeed, the dollar store is seeing a boost in popularity as well, again due to seemingly unlikely clientele: "One of the most popular dollar stores is in Beverly Hills," Spector said. "Everyone likes a good deal." In response to the trend, stores like Target and Wal-Mart are experimenting with aisles featuring $1 items.

But what's a small retailer -- say, an independent bookstore -- to do, if offering such steep discounts is not an option? "Really smart booksellers understand retail is retail is retail," Spector said. "And if you're going to be a specialty store, you have to be special."

In Category Killers, he profiles Minneapolis' Wild Rumpus (online at www.wildrumpusbooks.com). "That's a perfect example," he said. "The owner, Collette Morgan, says 'We do things the big stores can't do, or won't make a commitment to do.' They make the store a happening, from the way it's laid out to the events they have."

It's important, too, Spector said, that stores make use of multi-channel marketing: "You have to coordinate your store, your Web site, your phone, and your catalog so you give seamless service to your customers. You need to have the same look, and provide the same information."

It's true, the author conceded, that the category killers can sell books more cheaply than can independent stores. However, he said, "They only sell certain popular books. I was at Costco last week, and they have a relatively low number of titles. An independent bookstore could carry a few of those as a service, but it really goes back to finding something that will differentiate you from your competitors."

He explained, "My father sold certain ethnic foods -- head cheese, fatback, stuff you wouldn't want to touch, much less eat. But A&P didn't carry that stuff, so customers came in for it and bought other items while they were there. Use unique items, special orders, or a particular subject matter as a reason to get people to come to the store in the first place."

Spector is busy working on his next book, which he describes as "the yin to the yang of Category Killers -- a memoir about working for my parents, and will touch on the American immigrant experience, and mom-and-pop stores. I think it's the book I was meant to write." In addition, February will bring an expanded re-issue of The Nordstrom Way. --Linda Castellitto