COVID-19: Small & Medium Retail Businesses
Some strategies small and medium retailers can do to ensure that their businesses can stay afloat through the COVID-19 crisis include developing the ability to sell online, taking advantage of assistance programs, and negotiating short-term relief from lenders and vendors. Two omnichannel companies that have successfully implemented strategies to counter the impact of COVID-19 are Wind City Books and The Raven Book Store. Two brick-and-mortar only stores that have successfully implemented strategies to counter the impact of COVID-19 are aMuse Toys and Brownsboro Hardware & Paint.
- Many small businesses do not have the capability to sell their products online. However, the COVID-19 crisis is forcing them to develop that option.
- For example, Barb Skupien, owner of Embellish, a jewelry boutique in Asheville, North Carolina, is currently paying her one other employee to develop a website that will allow the company to sell jewelry online "in the hopes of creating a new revenue stream."
- According to Hoodline, retailers in the San Francisco area are "turning to online sales to keep money coming in during the lockdown, using everything from traditional online stores to Instagram stories."
- Chandler Tang, the owner of Post Script, a retail store that sells home goods and accessories, has been putting off developing an online channel for her store since November, but "once the pandemic hit, she quickly put up an option to buy gift cards, and later launched an online store in just a week."
- McKinsey suggests that "companies should invest in online as part of their push for omnichannel distribution...Customers’ changing preferences are not likely to go back to pre-outbreak norm."
- Companies like Shopify are extending their free trial to help companies move their retail stores online.
Take Advantage of Help
- Many cities have created organizations that are designed to help small businesses survive the coronavirus pandemic.
- Barb Skupien, the jewelry store owner, is participating in an Asheville-based initiative, called Asheville Strong that has created a directory of companies from which consumers can buy gift cards to redeem at the stores when the crisis subsides.
- When people buy gift cards, it gives small business owners a "temporary influx of cash without asking customers to physically patronize their stores."
- The Ashville Strong website already has over 300 listings for local small businesses.
- Another local example of relief for small businesses is Macomb County, Michigan's use of "$800,000 in Macomb County Planning and Economic Development grants and up to $100,000 in matching funds from First State Bank to provide economic assistance for local businesses."
- Other small business owners are turning to crowdfunding to help pay for rent and other necessities during the crisis. Retailers are even launching fundraising efforts to help support their staff during the outbreak.
- Additionally, the federal government has announced that small businesses can apply for low-interest loans of up to $2 million from the U.S. Small Business Administration.
Negotiate Short-Term Relief With Lenders and Vendors
- It may be necessary for small businesses to discuss short-term relief from debts with individual lenders.
- ZDNet recommends reaching out to lenders about deferred payments or extended credit lines.
- Even if the federal and state governments have implemented policies to allow lenders to provide assistance, it is up to each individual business to be proactive and hold these conversations with their lenders before a financial situation gets out of control.
- Along with reaching out to lenders to negotiate short-term relief, Inc. recommends not defaulting on any current loans if possible, but maintaining a strong relationship with lenders will increase the odds of getting help if default happens.
- Experts recommend that small businesses follow their governments on social media to receive timely relief information announcements and to follow the National Federation of Independent Business (NFIB), which advocates on behalf of small businesses in the U.S.
- Inc. also suggests that small businesses reach out to their vendors to negotiate payment holidays or additional services on a temporary basis.
Omnichannel Retail Business Case Studies
Wind City Books
- Located in Casper, Wyoming, Wind City Books is an omnichannel book store that has elected to remain open during the COVID-19 pandemic.
- To address the issues related to COVID-19, the book store stopped selling coffee, which was one of its differentiators, due to "difficulties in the simultaneous handling of money and preparing beverages."
- In addition, the store began closing at 4:00 p.m. instead of its normal 6:00 p.m. in an effort to reduce staffing costs related to slower foot traffic.
- Wind City Books' owner, Vicki Burger, announced the changes on the company's Facebook page and explained what store employees are doing to minimize contact. These practices include "social distancing, good hand washing and using hand sanitizer."
- The company reminded customers that reading is a good way to pass the time while quarantined and offered curb-side pickup as an option for telephone book orders.
- Since posting the announcement on Facebook, "the store has seen an uptick in online sales" and despite the decline in foot traffic overall, "Wind City is still earning money and selling books, with loyal customers and even new ones going out of their way to patronize the store."
The Raven Book Store
- The Raven Book Store is located in Lawrence, Kansas and while it decided to close its doors to customers looking to browse its books, it initially remained open during the Pandemic.
- Instead, The Raven Book Store started using the "pizza counter model," which allowed customers to pick up telephone and online book orders using curbside delivery.
- Additionally, the book store is providing free same-day delivery of online or telephone book orders to consumers in Lawrence, Kansas.
- For customers outside of Lawrence, Kansas, the company is offering $1.00 delivery.
- According to The Raven Book Store's Facebook page, the decision to offer these services has been successful as the company posted, "We’ve kept very busy thanks to your generous support and online orders. All of our booksellers are still here at their full hours and rates—we’ve actually added hours this week trying to keep up."
- Although Lawrence County issued a stay-at-home order on March 23, 2020, and the book store had to suspend curbside delivery, it is still offering free contactless delivery to its Lawrence-based customers and $1.00 shipping outside of Lawrence.
Brick and Mortar Only Case Studies
- Prior to the pandemic aMuse Toys in Baltimore, Maryland was a brick-and-mortar only store.
- However, once the ramifications of the COVID-19 crisis became clear, owner Claudia Towles decided to partner with a neighboring bookstore to develop a plan to deliver purchases to customers or make them available via curbside pickup.
- Towles had to upload 500 SKUs over two days to keep her toy store afloat during the social distancing mandate.
- This plan has allowed Towles to "continue conducting business, even though the store [is] no longer open to customers."
- Towles stated that "online orders are coming in, although the pace isn’t 'gangbusters'...Day by day, we’re figuring out how it can be sustainable and how to get to the other side."
Brownsboro Hardware & Paint
- Brownsboro Hardware & Paint is a brick-and-mortar only store with two locations: one in Louisville, Kentucky and one in Prospect, Kentucky.
- Hardware stores are considered essential, so the company remains open during the pandemic, but it added curbside pickup to its offerings for customers who prefer not to come into the store.
- The store has long provided delivery services of its grills to people living within a certain distance from its locations, but during the COVID-19 crisis, it has expanded delivery to a "wider range of items."
- To facilitate curbside delivery, the store had to add a new system, which consists of an employee taking a telephone order, ringing up the sale, creating a delivery ticket, and placing the items near the front door. When the customer is close to the store, they place a call and an employee will "either place the item on the curb or in the back of the customer’s car."
- According to owner Jim Lehrer, sales have been brisk, especially for paint since people are likely motivated to use the time stuck in their homes to complete their DIY projects.