NE Retailer Benny’s Thrives Despite No Online Sales
Monday, March 10, 2014
While Framingham-based Staples plans to close 225 stores to focus on online sales, some New England brick and mortar stores remain relevant and profitable.
Benny's is a regional institution. They like to think they're your favorite store, and their success as a small chain of modern-day "general stores" is the proof. Despite a robust website and an aggressive social media presence, the chain has zero online sales.
This is significant when one considers that online sales are growing at approximately 10 times the rate of sales in brick and mortar stores.
Some retailers have fared better than others
Other regional stores, though beloved by their customers, have not been as successful. Following last year's closing of the Building 19 in Shrewsbury, GoLocal looked back at the legendary store that was known throughout the region as Spag's for over 70 years. Like Benny's and Ocean State Job Lot, Spag's focused on serving the immediate community by selling basic items while leaving enough room for opportunity buys. You never knew when a truckload of name brand products would be on sale at a deep discount.
That business model didn't mesh with consumers' growing interest in online shopping. Despite good intentions, Spag's didn't make it. And how could they? Amazon.com CEO Jeff Bezos told Charlie Rose last year that he'd only open a physical store if he can do it better. It's nearly impossible for small retailers to compete in the new arena dominated by Bezos and his contemporaries.
Benny's, for its, part, has found a way.
"We use Facebook a lot. We use it to build the brand and to drive people to the stores. There's no question that we like to feel that we have a special place in the hearts and minds of people across the area," said Arnold Bromberg, Benny's co-owner and grandson of the company's founder.
"Our commercials build on the positive aspect of the shopping experience. There's not really a shopping experience with online shopping. It's no more an experience than reading your e-mail."
90 years of history
Benny's was founded in 1924, when Benjamin Bromberg opened his first store in downtown Providence. He sold auto parts and radios. At the time, the radio was as unique an invention as the iPod. This made Benny's a leading edge technology store that also stocked anything you needed to repair your own car.
"We dug out some Providence Journal archives and found our first ad. It was for radios and car parts," said Bromberg.
That first store in Providence is long gone. Now in its 90th year in business, the company has a total of 32 stores spread out across Rhode Island, Massachusetts and Connecticut. About half of those stores are in Rhode Island. Benny's headquarters is located in the Esmond section of Smithfield, RI.
Bromberg would not reveal employment numbers or sales data. But he was quick to list the company's old school strengths in a world where shoppers can buy everything from a can of peanuts to a Cadillac with the click of a mouse. Bromberg is not the first guy to preach about customer satisfaction and friendly, personal service. The difference, in the case of Benny's, is that it seems to work.
"When people go into our stores they are greeted, given assistance. If they have a handful of purchases we make sure they get a shopping cart and we help them find what they want. We don't rely on them to track down our products. We're there to help them find top brands at low prices."
By industry classification, Benny's is considered a mass merchant. However, that's not the term Bromberg used describe his company.
"We're like a Target or a Walmart, just without all the clothing and grocery items. We have the basic hard line categories such as housewares, hardware, automotive and sporting goods. We're also very big in toys and bikes."
Hybrid shopping model
With no online sales, his customers have discovered a bridge between shopping online and shopping in the stores. Benny's regulars looking for specific items or sales do not hesitate to pick up the phone or send an e-mail before they leave the house. It's a hybrid shopping model that Benny's does not advertise, but is happy to entertain – old fashioned shopping bolstered by modern technology.
"We get e-mails, many e-mails, daily. And phone calls from people looking for something. We don't mind people calling us. If you send us an e-mail – 'do you have this size tire in this store?' – we make sure they get a response within an hour or two."
Apparently it's working. Which is not to say that only niche stores such as Benny's or Job Lot can succeed. That success, however, might be championed by an unlikely demographic.
According to the Pew Research Center, "American teens have long been the country’s most-wired (and increasingly wireless) age group, with 95% saying they go online. But contrary to the stereotype of hyper-connected teens, they say some things are better done in person."
In-store shopping still preferred by many
Minneapolis-based investment bank Piper Jaffray recently surveyed teens’ spending patterns, brand preferences, media and entertainment habits and other information of interest to investors. They asked 4,800 teens nationwide whether they shopped online. More than three-quarters said they did. But when Piper Jaffray asked teens whether they preferred shopping online or in stores, 78% of girls and 75% of boys said they’d rather go to actual stores.
So while the numbers for online shopping are seemingly unstoppable – sales from online shopping have grown 300 percent since the beginning of 2004 – it still only accounts for 6 percent of sales in the U.S. retail industry, according to data from the Department of Commerce.
Again, despite the continued rise of online shopping, Benny's does not sell merchandise online.
"Not at this time," Bromberg said.
In the future?
Related Slideshow: 10 Historically Bold Moves Made By Big Companies
10. RJ Reynolds
The Smokeless Cigarette
In 1988, long after the American public wised up to the dangers of cigarettes, RJ Reynolds launched the Premier cigarette. They called it a “smokeless nicotine delivery mechanism that looks and feels like a premium cigarette.” It didn't. Smokers said it tasted like charcoal, and drug users quickly figured out how to use it to smoke crack. It has been reported that RJ Reynolds lost $1 billion on the product.
The alleged lobster roll – no one's sure there was ever any real lobster in there – from McDonald's was about as successful in New England as their McCrabcake was in Maryland. It looked bad, tasted worse, and was shunned by even the most die hard Golden Arches fans. (Unlike the McRib, which continues to have a bewildering trance on McDonald's fans.) The sandwich is still available in some Canadian franchises and occasionally in Maine.
Bans Employees From Working at Home
Enters the Auto Market with High End Electric
Fires Steve Jobs
One of the world's most famous college drop outs, Steve Jobs founded Apple, helped it grow into a billion-plus public company, and launched the Macintosh. He was also ousted by Apple's Board of Directors in 1985. The popular take is that the board was stupid to fire Jobs as the leader of the Mac division, because Apple would have more quickly become the company it is today. A new take on the decision posits that the then-30-year old Jobs was disruptive and incompetent in that role. After 12 years away from the company he founded, he learned the skills and discipline required for Apple's rebirth.
Takes on Sony + Nintendo in the Console Gaming Market
Microsoft has one person to thank for its console gaming success, and that person isn't even real. Master Chief is the hero of the insanely popular "Halo" franchise, which was first released was a launch title with the original Xbox. The game revolutionized First Person Shooters on consoles, and sold millions of consoles along the way. At the time, Microsoft was known as primarily a software company. They may have took a bath on those early consoles, but they now join Sony as one of the two major console makers left standing. (Sorry, Nintendo. The Wii U is going to sink you.)
Changes Pricing Plan
Netflix is back on top now, but it almost went under in 2011 when it mishandled its pricing changes and attempted to slice off it DVD business under the name Qwikster. As they did with the New Coke launch, customers responded with immediate anger, leading Netflix CEO Reed Hastings to apologize. The company reverted to its $7.99 streaming plan and has never looked back.
Opts out of Government Loans
After Detroit’s automakers went to Washington in 2008 asking for emergency loans to keep their enterprises afloat, the big bus oval was the only one to opt out of the bailout. Ford decided to mortgage all of its assets to raise operating funds instead. Taxpayers eventually spent $80 billion to rescue General Motors Corp. and Chrysler Corp. Ford focused on efficiency and increasing sales without using government bailout money - thus avoiding the federal tinkering that Chrysler and GM had to accept as a part of their deals. The company has since kept pace with GM, the country's largest automaker.
Perhaps the most famous brand misstep since Ford's Edsel, New Coke is the Titanic of corporate miscalculation. In the 1970s and early 80s, the soft drink giant faced increased competition from Pepsi and other products. To stay on top, Coke executives stopped production of the classic formula and introduced New Coke with tremendous fanfare. The public's responded with immediate outrage. Coca-Cola re-launched its original formula – called Coca-Cola Classic – almost immediately. Today, unopened cans of New Coke go for hundreds on eBay.
- One RI Company on Best Retail Brands in US List
- Friday Financial Five – February 21st, 2014
- Friday Financial Five – November 1st, 2013
- Retailers Lose Two of Their Biggest Days to Blizzard
- RI’s Dead Retail Brands
- Friday Financial Five – February 28th, 2014
- Friday Financial Five – November 22nd, 2013
- Smart Benefits: Health Insurers Go Retail
- RISD Students Open Innovative Retail Space in Downcity
- Friday Financial Five – February 7, 2014
- Friday Financial Five – November 29th, 2013
- UPDATED: GoGo Cast Lands GTECH - Now Largest Retail TV Network
- 10 Historically Bold Moves Made By Big Companies
- Friday Financial Five – December 13th, 2013
- Friday Financial Five – January 17th, 2014
- Friday Financial Five – November 8th, 2013
- Friday Financial Five – March 7th, 2014
- Staples Taps Duffy & Shanley
- Friday Financial Five – December 20th, 2013
- Friday Financial Five – January 24th, 2014
- Friday Financial Five–October 11, 2013
- “New and Noteworthy” App To Boost Local Supermarkets, Retailers
- Friday Financial Five – December 27th, 2013
- Friday Financial Five – January 31st, 2014
- Friday Financial Five–October 18th, 2013
- LaSalle Named Top Retail Bakery in the US
- Friday Financial Five – December 6th, 2013
- Friday Financial Five – January 3rd, 2014
- Friday Financial Five–October 25th, 2013
- NEW: RI Blue Cross & Blue Shield to Open Retail Store in Warwick
- Friday Financial Five – February 14th, 2014
- Friday Financial Five – November 15th, 2013
- Friday Financial Five–October 4th, 2013