Unusual Ideas in Inner-City Enterprise

The rebuilding of inner-city L.A. may focus too much on creating or re-creating traditional retail stores, say investment bankers Jim Zukin and Syngon Hare. They offer some non-traditional ideas for retailers in South-Central and elsewhere:

* Consider a “consumer stake ownership plan,” whereby a percentage of profits would essentially be “reinvested” in discounts for regular customers. The idea would be to give customers a sense of empowerment in the business and in the choice of products stocked.

* Set aside a small amount of shelf space--less than 5%--for products to be manufactured in the community, for the community. Homemade foodstuffs might be the best examples. They should not just carry a typical label, but include the story of the entrepreneur.

Over time, such products would be expected to provide the same profit margins to the merchant as established brands. And those that fail to sell well would have to be allowed to die.

“The whole idea is to be competitive,” Hare says. “A black person isn’t going to buy a product just because it was made by another black person.” The product ultimately must sell itself, he says. And for producer and merchant, Hare adds, “There has to be some kind of return on investment, or the doors are going to close.”