Rural Retailing: Behavioral Research Results and Implications for Managerial Strategy

ABSTRACT The truly small-town retailer is often ignored in the retailing literature. This paper reviews results from three selected marketing research case studies emerging from the problems of particular rural retailers. The implications of these results are explored for better understanding of consumer behavior in rural markets, rural retail strategic choices, and their potential impact upon rural consumers. INTRODUCTION Published research in the domain of rural retailing typically falls within one of several areas of interest. These areas typically include economic development, community development, management theory, and management practice (including entrepreneurship), but this list by no means exhausts the possibilities. Broader, cross-disciplinary approaches are less common, but no less useful. This paper's origins are in managerial practice, but the authors' intent is to explore some of the implications in a broader context. The authors have been involved in numerous marketing research projects in a consultative capacity for a wide range of clients. This paper reviews the results of three selected studies in which the clients' problems or needs involved basic issues in rural retailing. In each case, the business owner faced situation-specific problems which the projects addressed. The problems were closely associated with survival goals, not the growth management problems commonly associated with entrepreneurship. But the degree of difficulty and seriousness of consequences present equivalent challenges to managerial imaginations. These studies are reviewed in this paper to explore the possibility that there are common elements, common themes, and generalizable propositions emerging from studies such as these. The logic of this paper is, therefore, more inductive than deductive, more theory building than theory testing. The focus is not on what each client did or might do managerially in response to the knowledge acquired from a sponsored project. The focus is more upon what managers of all small rural retailing businesses (and economic development specialists, management theorists, and business consultants, etc.) can extract from the findings of these studies that is of value as they deal with issues in this area from their own perspectives. RURAL RETAILING TRENDS Retail trade has long been an area of business with significant small business participation. There are far more firms in retailing than in construction, the sector of the United States economy with the next largest number of enterprises. Small retailers far outnumber their larger competitors. Nearly 99% of all retailers have fewer than 100 employees (The State of Small Business: A Report of the President Transmitted to the Congress, 1991) while 75% of US retailers have nine or fewer employees and 49% employ four or fewer (Burkink & Marquardt, 1996). The long-run prospects for small retailers have been a subject of concern and scholarly interest, however, because of evidence of increased concentration in this sector. Burkink & Marquardt (1996), quoting the National Federation of Retailers, state that the number of US retailers with fewer than 10 employees shrank from 902,577 in 1972 to 645,331 in 1992, a decrease of more than 28%. Large, publiclytraded corporations have grown faster and increased their market shares at the expense of small, independent firms. Between 1991 and 1992, total U.S. retail sales increased by 4.5%, while growth for discount retailers during the same period increased by 15.5%. Observers of rural retailing environments are familiar with the disruption traceable to large chain operations such as Wal-Mart when they enter relatively small communities. A cottage industry of consultants has arisen to advise the small retailers that are threatened by such powerful large businesses. Relatively little attention is devoted to the managerial problems in retailing in communities which are too small or without growth prospects sufficient to attract large firms. …