Local vs. Big-Box: How One Small Business is Winning the War

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Changing Hands co-owners Gayle Shanks and Cindy Dach, posing in their bookstore for the cover of Frontdoors magazine.

How’s this for a great story: it’s 1974 in Tempe, AZ, and a few elementary school volunteers from nearby Arizona State University are sitting on the steps of the school, chatting with the teachers about their ideal jobs and, almost inevitably, the idea for a bookstore arises.

“We wanted to have a used bookstore. We thought it would be really neat to recycle books,” said Gayle Shanks, co-owner of Changing Hands Bookstore.

The idea took hold, and nearly 40 years later, Changing Hands remains a book and event destination for the entire Phoenix area. Through the years, the owners have changed locations and adjusted their business plan multiple times, and weathered the storm of the bookstore apocalypse. And even though she lost a small battle with a corporate bookstore chain, she appears to be winning the big-box war due to her diligence and customer service.

At a time when independent bookstores are struggling all over the United States, the team at Changing Hands is preparing to open up their second location. And they’ve done it simply by listening to their customer base, taking charge of their online presence, and reading as many books as they could.

Find out how you can build your business using this same successful strategy!

The First Store, The First Fight for Small Business

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Changing Hands Bookstore’s first location in Tempe.

While the idea of opening a bookstore may have been simple cocktail chatter at the time, a few years later one of the founders, Tom Brodersen, noticed a small bookstore for sale. He quickly confirmed that Gayle and another friend were still game for the idea, took a $500 loan out from his dad, and purchased the store.

Things went well, and within a few years they outgrew the original 500 sq. foot space, and moved operations to Mill Avenue, where they eventually expanded to a three-level book paradise. They hoped to expand again on Mill Avenue, but instead got their first taste of battling the presence of a corporate chain, an experience all too common when trying to build your business in the shadow of big-box retailers.

“The developers there offered Borders Bookstore the same space at a substantial amount less than they were offering to us, because they felt like they wanted a chain. I fought tooth and nail to keep Borders out, and I lost.”

This signaled the beginning of a change on the classic downtown stretch of Mill Avenue, when the unique community of shopkeepers began to transform into a row of corporate retailers.

“Those were the days of the ‘glory of the chain.’ City people weren’t tuned into local, or keeping money in the local economy, they just wanted a chain. And now none of those chains are there anymore except the restaurants,” Gayle said.

So instead, in 1998, they made their first expansion, opening a second location in Southern Tempe, the location they still operate today. Coincidentally, shortly thereafter the Borders closed.

  • What’s the takeaway? Battling chain stores is an ongoing struggle for small business owners, and one that is best handled through education. You have to continuously engage your customer base, community, and elected officials on the positive economic impacts of supporting small businesses versus corporate chains.

Growing a Loyal Fanbase

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Grumpy Cat visits Changing Hands – and doesn’t care.

Struggles against chains aside, Changing Hands has consistently maintained a rabid fan base. Even as their long-lasting Mill Avenue location closed down, their customers followed them to their current location.

“We have over 350 events a year. The difference between buying a book from us and buying a book on Amazon is that you can meet an author in our store, you can talk to a bookseller who can recommend a book to you based on something you read, not on an algorithm.”

Gayle grew up reading, and would spend Saturdays at the library with her sisters, developing a love for reading that she attempts to impart upon her customers every day. “We’re trying to make our store a place where people want to be.”

“We’re constantly trying to improve our customer service, the look, feel, sound, and smell of the store when you’re here. I want a customer’s shoulders to drop two inches when they walk in,” Gayle said.

The sense of community is what Gayle works the hardest to maintain at Changing Hands, with their workshops, discussion groups, and author events, including a wildly popular visit from local resident Grumpy Cat.

“As long as people keep supporting Amazon, they’re going to lose out on a lot of what makes a community unique. I’m always on that soapbox.”

  • What’s the takeaway? Creating a welcoming atmosphere in your store has long-lasting positive effects on business. Even more than a sale or one-time event, ongoing gatherings that speak directly to your customer base will turn your business into a popular destination.

Giving The Customers What They Want

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Construction continues on the new location, which will be an adaptive re-use of the iconic Beef Eaters restaurant building in central Phoenix.

As the influx and expansion of metro Phoenix made it harder for customers to drive across town her to bookstore, Gayle began considering a second location, thanks in no small part by the urging of her customer base.

For the past 5 years, Gayle said the team has been looking for a new building. When a Borders closed in the same part of town, it seemed like there was a bookstore void in the central part of Phoenix. They zeroed in on an unused restaurant building that had been empty for some time, and began the process of talking with developers and establishing partnerships. And instead of demolishing what was already there, they wanted to maintain the integrity of the original building while making it workable for a bookstore.

“There’s not a lot of money to be made, and the competition is really intense with Amazon. So we really had to work with developers who understood our business, and have a rate structure that we could afford.”

As we all know, one of the most productive ways to build your business is to establish partnerships with your fellow small business owners. For Changing Hands, it seemed only natural to partner with local restaurant Beckett’s Table and local mobile meeting space The Lively Hood, to create a mixed-use space that will be grounded by the bookstore. Gayle said they will also begin offering beer, wine, and coffee to invite readers to unwind with a book.

“In the early years, we were a destination for the entire valley, and it didn’t take an hour to get to us. But it’s harder to drive now. So we’ve spent a lot of time looking for the perfect location.”

Located near a popular stop on the city’s light rail, the building is also situated in an area flush with locally owned restaurants, clothing stores, tattoo parlors, and grocery stores.

“Our idea is that it’s going to open up all of Camelback, from 7th Avenue to 7th Street,” Gayle said of the location. “We’re looking to revitalize the neighborhood. Fortunately, bookstores all over the country are really good at that.”

  • What’s the takeaway? Joining forces with other small businesses can increase your potential for growth. Maintaining a small business is hard enough, so make the expansion process easier by partnering in any way you can.

Success In a Volatile Industry

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From small beginnings to a book lover’s destination, Changing Hands has evolved while maintaining a focus on the customers.

“One of the things I think bookstores can do is remind people how valuable books and reading are, and then make the experience of finding that next great thing that they’re going to read an addicting experience,” Gayle said.

Although a good book can sell itself, the team at Changing Hands is committed to maintaining a fantastic online presence. With a responsive website and active Twitter and Facebook accounts, they communicate regularly with customers and keep them informed of the next big event at the store. To Gayle, these things are key for small bookstore owners to maintain and grow their customer base.

“I think they have to be extremely responsive to what their customers are telling them they want in a bookstore. They have to have an active website, and a huge number of social media fans. The way we communicate with our community is through our website, Facebook page, Twitter feed, monthly newsletter and email blasts,” she said.

“You have to remind people that you’re there.”

For Gayle and her co-founders, their business plan has always been centered on her love of reading. Creating a sense of community around books, and making their stores a destination for customers, are the goals that drive them still.

“We’re trying to grow readers. I want children to be reading books,” Gayle said.

  • What’s the takeaway? Social media makes a difference. Your customers aren’t thinking of your business all the time, so you have to work to gain their attention by providing regular social media and email outreach updates.

What strategies do you use to build your business? Share below!

About the Author

April Atwood

April is a freelance writer who combines her marketing and writing experience with a love for supporting small businesses. She writes, bikes, and uses a coffee press, but not in the pretentious way.

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