Open a Store!

Imagine that you had some capital and wanted to start a new business. Ten or fifteen years ago, it might have been a great idea to open a coffee shop. Any metropolitan area will see one brand or another on virtually every block or in a grocery or discount store.

Some time around the same era we became introduced to the mass discount clothing stores. You all know the stores - many are names of women, barns, outlets or warehouses - all touting "designer clothing" at bargain prices. I'm somewhat suspicious of people who want designer clothing but want to buy it at half the price. If these are truly designer clothes rather than knock-offs or distressed merchandise, why are they so inexpensive? Going along with this trend was the discount shoe, discount sporting goods, discount toys, discount hair salons and discount pet supplies.

While we were all looking for reduced prices and genuine fakes, the everything-you-could-ever-want-for-an-amazingly-low-price stores are flourishing. Everywhere you look, people who are trying to survive in a challenging economy are finding ways to cut prices. Until and unless they are falling apart, shoes can be postponed. So can golf clubs or a new luxury condo for Fido or Fluffy. And I find it a personal amusement that many folks are touting their ability to forgo their designer coffee in order to save money. It's become a badge of honor or distinction.

But the beauty of the dollar or less venues is that they are filled with critical items. If you don't believe it, walk into one of these stores. If you get past the glam magazines and sugar-drenched candies, you'll see the toothpaste, greeting cards, paper products, toiletries, baby products, shoe laces and other items that we need to carry out our lives. I've visited many of them and although I confess to indulging in a few purchases that were not mandatory, most of what you see does fall into the category of critical path.

I've conducted some research on the origins of these stores and they date back to the 50s. The concept was to locate stores in strip malls in order to take advantage of the shoppers who were already at the large discount chains and see these as lower priced alternatives, "as long as we're already in the neighborhood."

What's confusing to me, however, is that I've only recently noticed them. I don't attribute that realization to increasing financial stress because there haven't been sufficient requirements to identify low-cost necessity alternatives. It appears to me that these are becoming as common as coffee houses used to be and as ubiquitous as gas stations and cafes.

If you don't believe that this is true, drive through America's cities. I did recently and was flabbergasted to discover that every town has at least one of them. Many with comparatively small populations have two. Can it be that these are the icons of our future? Have they been here all along and I simply haven't been paying attention? I can't imagine.

From a marketing standpoint, it's a phenomenon of pure genius. Get all of the goods that you use on an everyday basis, on your hair/face/teeth/baby/shoes/cars/homes. The products don't need to be luxury versions because after all, who notices? Save your money on your not-knockoff handbags, shoes or golf clubs and who's the wiser?

A smug sense of victory always results when you truly get products you need at a lower price. Based on history and the frequency with which these stores proliferate, I don't see any chance that they are going away. Bargains are only socially uncool if you are seen. And no-one is taking attendance.