[bluGill]

Many reasons.

First, WalMart doesn't have everything. Only a few people in any city are interested in buying specialty items, it doesn't make sense to WalMart to stock that everywhere when some stores will never have a sale. A specialty store brings in customers from all over the city.

A human who knows one product well is very useful. WalMart salesmen don't know their product. Going to a specialist who knows the product well makes sense because you can get advice. Also, WalMart as limited space: the specialist shop will often have the exact thing you need, while WalMart will have at best something similar, for real niche items you can't even get a substitute.

For the above to work you need a large enough population. The small hyper-specialist shop only works when there are enough people who will buy from it. Small towns in the middle of nowhere have a specialist store selling only farm equipment, you won't find that in the middle of a big city (you will on the edge). A big city will have specialist stores to support the industry (and hobbyists) in that town.

When the item needs to be custom fit you need a store. WalMart can fit glasses, but they don't know anything about pens. I bet many of you didn't know that some pens are custom adjusted to the user - there are enough people who like expensive pens to support pen shop in some cities. Likewise golf clubs, bowling balls...

[subpixel]

> For the above to work you need a large enough population

I think you also need a sanely designed city with effective public transport. For example, Atlanta or Charlotte have millions of people, including hobbyists and artists and enthusiasts, but I don't think many of the shops in the linked article would survive in a strip mall.

[bluGill]

Not true on path counts.

You don't need a sane design, you need a large enough population. Walmart needs to be every few miles because if they aren't people will go to a competitor who is closer. For specialty stores though there is no competition. Customers often will drive for over an hour to get there and put up with a really bad location because that is the only choice.

I have seen such stores in strip malls - not the new ones, but the old almost dead ones often find a new lease on life by renting to specialty stores that bring in people from all over.

[nonford150]

Gail K fabrics in Atlanta. 2 locations and you can find any type of fabric under the sun. Just so little competition.