Batteries-only store shows power of strict focus
January 25, 2010 -
By Wailin Wong
"Spatula City. We sell spatulas … and that's all!"
So goes the TV commercial jingle for Spatula City, a fake store featured in the 1989 cult classic "UHF." The idea of devoting a retail chain to endless variations of an ordinary item is a rich vein of absurdist humor.
It's also proved to be a successful business model for a real company, though not one that sells spatulas: Batteries Plus, a Wisconsin-based retailer with five Chicago-area outlets. The area's newest location, the first within city limits, opened in November in Lincoln Park.
In a consumer economy teeming with giants like Wal-Mart and Best Buy and a plethora of online electronics retailers, Batteries Plus stubbornly has stuck to its niche.
"As a vertical retailer, I think there needs to be an acute focus to know your place and know your space," said Russ Reynolds, Batteries Plus' chief executive. "We've stayed true to batteries for several reasons. …There's been enormous growth in types of batteries. We're the retailer in town that can dependably provide every type of battery every time it's needed."
Consider the digital camera. Roughly 125 new batteries have come out every year for the last several years in that category alone, Reynolds said. Multiply that number by the amount of devices that require batteries, everything from a flashlight to a speedboat, and it becomes clear how Batteries Plus sold more than 20,000 different kinds of batteries last year. The privately held company said its retail sales segment grew 19 percent in 2009 from a year earlier.
"It's a very humdrum item," said Brian Bessey, who runs the five Chicago-area franchises along with his father. "But they're becoming more and more ubiquitous."
Bessey said his family became franchisees about eight years ago after his father spotted a Batteries Plus store in Lombard and thought "it was an interesting niche, looking at where the professional world is going. A lot of people live on the road."
Bessey acknowledged that a consumer easily can buy a pack of AA batteries or get a watch battery replaced at many other outlets. But Batteries Plus offers harder-to-find batteries, such as specialized ones for antique cars. The stores also can build customized battery packs for discontinued or hard-to-find gadgets: beard trimmers, power tools and Dustbusters. Six years ago, the Naperville store built a battery for a blind customer with a device that translated text on a computer screen into Braille.
Sometimes, even an uncommon machine needs just an ordinary battery. Bessey said his oddest request to date came from a man needing to power an automated deer feeder. After studying the instruction manual, Bessey identified the required battery and found one in stock at the store.
"He was somewhat shocked," Bessey said.
Batteries Plus also works with commercial clients, which account for roughly 40 percent of sales for the chain as a whole, Reynolds said. These customers include police and fire departments, school districts and equipment rental companies.
Bessey said the weak housing market has adversely affected demand from companies in the construction industry, though he's seen that decline offset by budget-conscious consumers who are buying new batteries for their gadgets instead of replacing the devices.
In the near term, Reynolds said, he expects the number of batteries to keep growing.
Even with all the developments in packing more power and run time into lighter batteries, the demands on devices are growing. Each new wave of ultramobile smart phone, digital camcorder or netbook will require its own battery.
And more battery-powered machines, including automobiles, are likely coming to market. Car manufacturers are experimenting with lithium ion, a lightweight material used in mobile phone and laptop batteries, to make the technology cost-effective for plug-in cars.
"This is the future right now," said Jai Prakash, chairman of the chemical and biological engineering department at the Illinois Institute of Technology. "Everything is lithium ion."
Developments in battery technology may be largely invisible to consumers, but Batteries Plus pays close attention. The company is able to respond to small changes in product life cycles because "batteries is all we do," Reynolds said.
"Many of these categories we're talking about are very dynamic," he said. "Our historical analysis suggests that every 90 days, 50 percent of the top 20 cell phone batteries we sell are going to turn over. It's kind of like watching the Top 40 chart. … Some stay in there for a while, but there's a lot that come and go very quickly."