A theory the new Walmart opening in town will indefinitely cause all local small businesses and existing retailers to disappear from the grid is a dismal conviction that society and small business owners recognize as unabridged fate.
Independent retailers are under pressure when billion dollar mega-retailers bring local competition–recent article states entrepreneurs gain by innovation.
Old Wive’s Tale Debunked
The article, The Wal-Mart Effect: Wave of Destruction or Creative Destruction?, from Economic Geography shows reputable, analytical stats backed by researchers at University of Florida, University of Toronto, and Princeton. In a 14 year study from 1980 to 2004 in Florida, research suggests small businesses may lose more by regarding or undertaking the notion that business will indefinitely flounder–buying into what has been engrained in the minds of Walmart shoppers, independent retailers, and Walmart greeters across the board.
Even though this a premise society has adopted and adapted to as commonplace knowledge, research from the study states this misconception as fallacy. The ostensible mythos negatively effects intimidated local business owners to the point of considering and often calling it quits rather than evaluating all possible circumstances before closing.
If local surrounding businesses offer services and products Walmart does not provide, the competition is not as steep in the long haul as some skeptics state.
Creative Destruction, Entrepreneurs Step Up
According to the study, retailers close to Walmarts are apt and previously equipped to sell the same products as the mega-retailer–providing the same product or service at a competitive rate either forces independent companies to change or leave the scene.
The vacant locations eventually attract fresh occupants and entrepreneurs that diversify the local market. For example, an art supply store can provide higher end, professional products Walmart does not stock.
A Korean restaurant, for instance, will benefit more from the new neighbor whereas a newly established Kodak store owner may need to reevaluate her business strategy since Walmart provides photo development services as well.
Variety and diversity in the market regenerates depletion of past businesses dissolving while opening doors for future investors, ultimately to potentially successful entrepreneurial ventures, in a business environment when large super stores like Walmart force market transformation.
Over time, the newbies establish products and services to compete and succeed with extensive innovative changes in business strategy to push forward and out perform competitors of old.
Inevitable Losses, Envisioned Gains
Entrepreneurs should be optimistic when Walmart waltzes in a few exits down I-77 from another Super Walmart: the small business owner should take a look at setting up shop next to the fresh asphalt and offer services and products the new mega-vender does not provide, perhaps a joint, non-profit validation parking service venture for Walmart customers.