Can Small Business Save Us?
How Nimble Retail Can Re-Imagine Consumer Spending.
When Ann Cantrell realized a pandemic had descended upon New York City in March of 2020, the prompt that led her to shut down her iconic Brooklyn shop, Annie’s Blue Ribbon General Store didn’t come from a daily Mayor DeBlasio briefing, it came from a different state.
“I remember talking to a colleague in Michigan about a store we both loved in Colorado that was closing because of the pandemic,” said Cantrell. “By Friday [March 13th, 2020] morning, I knew we were going to have to close for the safety of our customers and team.”
Cantrell had recently relocated her store from a 520 square ft space off Atlantic Avenue, to a storefront in Park Slope on 5th Ave– double the size and made four times the revenue. The thought of halting sales for a day much less two weeks (the time most retailers thought it would take for the shutdown to cease), was overwhelming.
It’s been estimated one-third of the stores that temporarily closed at the start of the pandemic in New York City would not re-open once restrictions were lifted. What caused stores to get to the point of return?
Many were running on thin margins, large overheads, and mismanagement of staff and cash flow. What is more, many of the stores in peril did not have a multi-channel approach to selling. The opposite was true for Annie’s Blue Ribbon General Store which saw a 70 percent spike in online sales after the onset of the pandemic due to marketing, hustling, and holiday selling (Easter, Mother’s Day, etc.,).
“People already got our newsletter, and we had the infrastructure to support online sales. Where retailers were scrambling to set themselves up, I was grateful to have everything in place,” said Cantrell.
According to a report published by the Data Catalyst Institute, called “Super Selling,” small businesses which diversify sales channels, tend to have better revenue streams and can sustain profits longer.
A typical small and medium-size business (SMB) uses five different methods of selling products to consumers. The four most popular ones include both traditional and modern sales methods, including brick and mortar physical retail stores, wholesaling, third-party online marketplaces, and a seller’s owned and operated web store. On average, 72 percent of SMB revenue comes from these four sales methods.
‘Digital shelves’ boast sales
Some of the hottest selling items were typical of the time: N95 masks flew off the digital shelves and continue to be a best seller. Comfort items like puzzles, candles, and items for Easter as well as Mother’s Day turned out to be enormous sellers. But Cantrell credits the store’s community and loyal customers for sustaining sales.
“I had to send five emails for one transaction, but it was worth it,” Cantrell revealed. “This is a high touch business and [it’s important for] customers to feel light and have that element of surprise and delight. Through Instagram stories and lives we were able to do that.”
Leveraging social media was one of the main ways retail SMBs leaned on their communities to spread the word about new products. Customers join discussions and felt like they were an extension of the brands. The New York-based skincare company Malin+Goetz saw an uptick in business during the pandemic but did not expect the large growth their digital business saw.
“Our digital e-commerce [grew] from 30 percent pre-pandemic to 70 percent during the lockdowns and restrictions. Today it remains steady at about 50 percent of our entire business,” said Matthew Malin, founder of the brand.
What also drove sales is having multiple selling platforms. SMBs typically use more than one option within a specific sales method according to the Data Catalyst Institute. For example, 87 percent of SMB sellers on Amazon Marketplace also sell on at least one other online marketplace. This pattern of competition and choice holds up across all the leading online marketplaces. What’s more, leaders of businesses using more sales methods are more optimistic about their businesses, industries, and the economy.
“Many thousands of SMBs are selling in old fashioned and sophisticated ways, leveraging tech, and cutting out the middleman in many cases, to keep prices low,” said Mark Drapeau, editor-in-chief of the Data Catalyst Institute. “You can shop small and local in a physical store or ordering online and picking up, or small and global by ordering from SMBs [that are] far away through a web store, online marketplace or social media and having it delivered across the globe.”
A post-pandemic future
And the optimism for retail post-pandemic is palpable. Malin sees a bright future for his brand as restrictions ease and customers feel better about in-person store visits, as he prepares for the opening of their 15th brick and mortar location on the upper west side of Manhattan.
“While we have seen significant growth online and from social, we have felt our customers pent up energy for a personalized and more intimate experience in-store,” said Cantrell. “Specifically, it’s the smaller retailers that can compete for the most with service and the details that customers expect when shopping in store.
“There is a tremendous opportunity for a personalized, intimate in-store experience. Customers are very engaged for a face-to-face with us. We do not see this going away!”