Academic journal article Journal of Small Business Management

The Late Show: The Effects of AfterHours Accessibility on the Performance of Small Retailers [*]

Academic journal article Journal of Small Business Management

The Late Show: The Effects of AfterHours Accessibility on the Performance of Small Retailers [*]

Article excerpt

How should small retailers best leverage their limited resources for maximum effect? In this article, we address this question as it concerns small store hours of operation. Drawing on niche theory, we advance a strategy of extraordinary accessibility as a source of competitive advantage uniquely available to small firms. We then report results from our study of the hours of operations of over 300 small community hardware stores. We conclude by reflecting on what our findings mean for small retailers facing the prospect of competing alongside giant scale-advantaged firms.

A new era of large retailers leaves the small retailer increasingly disadvantaged in virtually every facet of operation. Whether it be advertising budgets, inventory reserves, or staff sizes, large firms are predisposed to glean any and every advantage of scale. This means small retailers must act more strategically than ever before.

One decision area concerns the allocation of the scarce resource of management time. As numerous studies report, management time is arguably the scarce resource since it makes possible all other decisions and tactics. However, a retail correlate of management time--store hours of operation--has not received much attention from either academics or practitioners. This lacuna suggests an implicit two-fold assumption: (1) store hours of operation are essentially a given; (2) store hours do not effectively differentiate one competitor from another.

What this means in actual practice is straightforward. If a competitor increases the number of hours or number of days it is open for business, rivals are assumed to have no choice but to follow suit. However, given the resource disparity between small and large retailers, accepting this assumption can be dangerous for small firms-extended hours may not necessarily generate sufficient sales to offset the incremental expenses incurred.

Another tactic appears available, however. Rather than trying to match the operating hours of its large retailer competition, the small firm, by virtue of its more informal mode of operation, can instead make itself available to customers for after-hour emergencies. This strategy, built on a logic of scarcity, involves being informally accessible to customers if and when emergency strikes, regardless of whether the store is formally closed. Compared to the logic of scale and scope, a scarcity-based strategy seeks to complement, rather than duplicate, large competitor practice.

The option of scarcity-motivated hours of operation poses three interesting questions not usually considered by small business researchers. First, do small retailers utilize such access strategies? Second, if implemented, are these strategies utilized in place of, or together with, more traditional scale- and scope-based policies? A third question concerns retail performance: do hours of operation, whether based on scale, scope, or scarcity strategies, make any discernible difference to small firm performance? To date these questions have been overlooked. While the practice of scope-related practices (Sunday shopping) was studied by Barnes and Chopoorian (1987), the practice of tactics based on scale (evening) and scarcity (after-hour) have not been considered. Our article therefore seeks to address these questions for two reasons. First, we seek to assist small retail business in most effectively allocating its limited resources. Second, on a more theoretical level, we desire to advance understanding concer ning the nature of effective small retailer niche strategy.

We approach the task in five steps. First, we discuss the nature of the large firm's comparative advantages over the small firm. Second, we review the basic range of response options available to small players. Third, we integrate these response options with insights from niche theory to advance a set of performance-related hypotheses. Fourth, we report results from our recent study on small firms and their policies regarding hours of operation. …

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