How Local Retail Stores Can Thrive in a Big Box Marketplace
In the past few months Amazon and its big box friends have enjoyed rapid expansion while many of my neighborhood shops have struggled to stay afloat. According to the U.S. Chamber of Commerce, one in five small businesses has had to close its doors since the pandemic started, and even with things starting to reopen, brick and mortar shops face a sink-or-swim challenge.
It’s ironic, because support for local retail has never been higher. From the push to save local stores shuttered by COVID-19 to support for black-owned businesses in solidarity with Black Lives Matter, our value system has been triggered in a way it hasn’t been before. Consumers are willing to go the extra mile (and spend more) to support shops in their own backyard and use their buying power to send the message that shopping in 2020 and beyond isn’t just about finding the best deal. It’s about people supporting people.
There’s just one problem: local retailers aren’t always able to step up to the plate and offer alternatives to Jeff Bezos’s bid to become the world’s first trillionaire. But embracing ecommerce in a new, and hyperlocal context, could be the key to helping them fight back.
This is the silver lining for local.
Ecommerce has often been regarded as a threat to local retail — introducing competitors from all over the globe and undercutting independent merchants on price. But recent months have seen ecommerce emerge as a lifeline for local retail in a time of crisis.
From toy stores with FaceTime browsing to gyms offering virtual classes and historic sites running online tours — there’s no shortage of examples of independent businesses that have reinvented themselves online. They may even have a leg up on international competitors when it comes to building a loyal customer base.
Unlike impersonal and anonymous global e-tailers that demand consumers send their money into the void, local retailers are known, and personal. The shops, salons and grocery stores we love are familiar fixtures, run by real people we are familiar with. When it comes to shifting those operations online, there’s a level of pre-existing trust that is almost impossible for e-tailers to replicate. That translates into a willingness for people to pay a premium for goods sold at a local business, knowing who they’re supporting, and what they’ll get in return.
Additionally, our community businesses can benefit from the fact that they don’t have to exist only online. Using ecommerce channels to enable curbside pickup, local delivery, or arranging for socially-distanced shopping appointments gives consumers a semblance of normalcy by enabling the human connection that we're all desperately craving right now.
Yet, for all the potential, too many local merchants struggle to capitalize on their hometown advantage.
There are new rules for local retail.
My dad opened his first denim store in the ’80s. Back then, about 90% of his budget went to securing a location that would attract plenty of foot traffic — only a small portion of the remainder went to marketing. Local retail’s strength has always been in its location; an eye-catching store in a well-travelled part of town was often the primary key to success.
Attracting customers online requires a totally different approach, one that’s completely foreign to most small-business retailers. When it comes to attracting virtual traffic, the ratio that worked so well for my dad, and most physical retailers, has to be flipped. Online stores can be launched in a matter of minutes, and for a fraction of the cost of a commercial lease. However, standing out from the sea of competitors requires more than a ready-made web design — it takes significant investment in marketing, and the tools to measure how effective it is.
In addition to advertising through new and old-school methods (think fliers in local mailboxes and an optimized social media presence) free services like Google Analytics provide critical data: how many people visit a site, how long they stay, what they browse, and what makes them leave. This insight offers a critical edge to retailers who can ensure they’re investing their efforts in the right areas, but it also requires a significant investment in time and effort to learn a new skill set.
So too, does addressing logistical hurdles that invariably arise when adding an online channel to businesses engineered for physical retail. Just look at the chaos many grocery stores have found themselves in over the last few months. Online grocery ordering has been available for years, but the clunky logistics around fulfillment and delivery were exposed when a drastic increase in demand led to massive delays, missed orders, and websites crashing.
The upshot for local retailers? A website is only step one. Success requires pivoting quickly to meet demand, no matter where it’s coming from, and a willingness to redirect resources to areas that may have been afterthoughts in a pre-pandemic world.
Taking small steps toward progress.
Local retailers certainly aren’t in an easy situation right now; building a successful ecommerce operation takes time and many are in a race for survival. However, there are some simple steps independent shops can take right now to capitalize on the groundswell of consumer support.
For starters, simplify the shopping experience. One wine bar in California realized listing their full inventory of natural wines online was entirely impractical, so they created a questionnaire for customers to fill out and then had staff hand-select interesting wine picks for customers based on the criteria. Not only did this help keep them afloat, it reintroduced the kind of personalized service customers have come to expect.
Other retailers can follow suit by focusing on the top sellers that account for the majority of sales, rather than tackling the onerous task of listing every single product they carry online. At the same time, others are redefining what it means to be local with creative options that bring stores to customers rather than relying on them to visit stagnant storefronts.
Scrappy third-party technology is also greasing the wheels of local commerce. Apps like Cornershop and Instacart connect customers with personal shoppers for grocery runs. Uber Eats and Skip the Dishes bridge the gap between diners and restaurants. Meanwhile independent options are springing up to offer similar services geared to individual communities where merchants are banding together to pool resources and offer collections and collaborations on complementary goods.
Clothing boutiques, hair salons, small grocers, consignment stores, coffee shops and restaurants — local businesses are integral to the rich, vibrant communities we live in. Consumers have realized that if they want to save their neighborhoods and their way of life, they’ve got to support local retail in whatever form they can. Undoubtedly, many merchants have risen to the challenge.
As the number of shocked and shuttered storefronts in our cities grows, however, the question remains: will enough of them be able to follow suit in time to forge a path to survival — and prevent the Amazons of the world from eating everyone’s lunch?