It’s approaching two months since President Trump called on the country to practice social distancing to stop the spread of the coronavirus. That led almost immediately to a virtual shutdown of the nation’s Main Street retailers that were classified as non-essential and to restaurants, pubs, and food service establishments to all but carry-out service.
In many parts of the country, the shutdowns did the trick and about half of the states are starting to phase reopenings, though some states are moving faster and wider than others.
This is good news for the American people, but the American economy is the collateral damage in the government’s war on coronavirus.
It is too soon to reckon the final tally, but since personal consumer expenditures account for nearly 70% of our country’s GDP —$14.8 trillion of the total $21.7 trillion GDP in 2019 – and 42% of that – $6.2 trillion – is spent in retail and food service establishments, the retail and food services industries stand to be one of the most profoundly impacted sectors of the economy.
And small independent retailers, many which survive month-to-month, stand to take one of the biggest hits. Out of the total 1.1 million retail establishments, small retailers with fewer than 20 employees make up nearly 60% of that total, and virtually all (98%) are single-store operations.
Thankfully, the widespread retail shutdowns don’t look to last much longer and President Trump is champing at the bit to open up sooner rather than later.
Since Europe has been weeks ahead of the U.S. in the COVID-19 infection, our government leaders will no doubt follow their example with Italy, Denmark, and Austria already mapping out plans.
For example, the Wall Street Journal reported that Austria, which initially instituted one of Europe’s strictest lock downs, started to loosen restrictions on small businesses on April 14.
My guess is that the U.S. will follow suit and open small businesses first, especially given the President’s recognition of small businesses’ contribution to their communities.
“America’s small businesses are the backbone of our communities. Our nation’s 30 million small businesses employ nearly half of our workforce. My administration will continue to take the boldest action in history to bring immediate relief to our small businesses,” he said at the April 7 America CARES: Small Business Relief Update Meeting.
The boldest action of all might be to let these businesses open up. So, with light at the end of the tunnel, I reached out to several community-based retailers to learn how they have come through this forced pause to their businesses and how they plan to see their way to its end, which can’t come soon enough, all agreed.
Okay, everybody’s faced a tough time, probably the toughest they ever faced in business, but nobody needs to be reminded of it. What we need is something to feel good about, and if we can’t summon it from inside, we need to use an artificial stimulant, like forcing ourselves to smile.
Numerous research studies have found that the mere act of smiling, whether real or forced, can actually induce real positive feelings. Beside giving one’s spirit a lift, smiling also could have a side benefit of increasing one’s immunity, most needed in the midst of a pandemic.
Maya Angelou said, “If you don’t like something, change it. If you can’t change it, change your attitude,” which is exactly the situation we all find ourselves in now.
This time of forced respite should be used productively to reassess our businesses and make plans to bring about necessary changes. Maybe its an update to the website or getting rid of an under-productive product line or rearranging the store to support traffic flow.
This is the time to identify what may have been holding business back before coronavirus hit and fix it before reopening.
“The time now is not just for getting through this disaster. It’s for planning for recovery,” says Mary Liz Curtin, owner of Leon & Lulu home furnishings, gift, and fashion lifestyle store in Clawson, MI and Three Cats restaurant and café.
The store’s motto is, “Live Well. Shop Often. Laugh Much,” which she makes her personal mission.
Employees come first
Successful specialty retailers understand that retail is primarily a people, rather than a product business. Their customers can buy just about anything they want from Amazon or other online sources, but they come to your special destination for the special experiences and services that only you provide. It is you and your staff that give them what they really crave: a sense of community along with the products they may buy.
That is why it is critical to support your staff as much as possible through this period. Openness and honesty is critical now.
“We looked at the options, like reducing everybody’s hours,” shares Matthew Adams, who operates Backyard Beans Coffee Company in Lansdale, PA, which includes a coffee roaster, café and retail store. It also sells cold-brewed cans and bagged coffee wholesale to local restaurants, coffee shops, and grocery stores, including Wegmans and Whole Foods. Its canned coffee is also carried by 60 Walmart stores in the Northeast.
“We do our best to put our employees first, but we only could have carried them for two weeks and it looked like this was going to be much longer than that. So, we decided to temporarily lay off most of our staff and encouraged them to file for unemployment,” Adams continues. “Our employees are our community. Most of them live blocks from us.”
But to help his temporarily laid-off staff through till he can bring them back on again, Adams installed an online tip jar to allow customers to make a donation to the staff.
In addition, he created a special Our Backyard coffee blend where $5 of the proceeds go straight to an employee fund. It currently is the company’s number-two selling blend, and they’ve collected more than $4,000 for the staff through its sales.
Accurately assess finances
Both Backyard Beans’ Adams and Leon & Lulu’s Curtin took a cold hard look at their finances as the crisis developed.
“My first project was to figure out what it’s going to cost us,” Curtin says. “I had to cancel some orders through July and August and figure out how to pay our bills. After that, I had to furlough a lot of our staff at our two businesses, which was very painful, but at least, we can continue to pay their insurance.”
Leon & Lulu went from a staff of 42 to six and the Three Cat’s restaurant from 30 to six. While she was able to pay all her vendors in full, she says it is important to keep communicating with them about the impacts of store closing. She also has kept her Christmas orders intact for now.
“Everybody seems to be understanding and doing their best to help people, which is America at its best,” she says.
While Backyard Beans has seen revenues drop sharply in its café and wholesale bagged coffee sales to local restaurants and coffee shops, it has been able to maintain cash flow by fulfilling online customer orders for bagged coffee, as well as wholesale bagged coffee and canned cold brew to its grocery partners.
Nonetheless, budgeting and managing the operations is a challenge with so many unknowns.
“We are trying to figure out how to balance and properly staff right now, because we want to reopen strong and that means having cash in the bank,” he says. “We are being flexible and taking a conservative approach because we don’t know when this is going to end, but we do know it will end.”
Finding new ways to do the same-old things
With its café shut, Backyard Beans’ immediate challenge was how to offer curbside pickup from a Main Street store with no drive-thru window.
Overnight they developed an online ordering app but with a reduced menu since it was too difficult to prepare and serve fancy espresso drinks curbside at the quality level possible in the café. But customers can drive up and get a cup of drip coffee or cold brew can on the spot with no advance online ordering.
For Leon and Lulu, which previously was an 100% in-store business, being able to provide online ordering was an immediate need. The company’s internal point-of-sale and inventory-management system couldn’t accommodate online orders.
“I haven’t been in a big hurry to do a new point-of-sale system with 11,000 active SKUs to integrate with an online shopping cart,” she explains.
So, rather than be hampered by the inability to support online orders, Curtin took to video to explain their “low-tech online store,” where customers could place orders by phone or email for virtually anything in the store or from a curated selection of personal items and gift ideas displayed online.
In particular, she found gift care packages in great demand, with preselected items or ones customized for the customer by phone or via Facetime so customers can see the item.
“It is labor-intensive, but it’s nice to be in a position to help people do something nice for someone they care about.” She adds that this experience is likely to jump start the move to full e-commerce capability sooner rather than later.
Communicate with empathy and humor
Now is not the time to be missing-in-action when it comes to your customers. Take time each day to personally reach out to some your customers, by phone or with a card, to see how they are doing and let them know you are thinking of them.
Social media and emails are important tools too, not to sell but to share and encourage.
“On social, we’re trying to keep people laughing. It’s about more laughing and fun, not much about selling,” Curtin says, as she points to a series of videos she has posted to brighten her customers’ mood and remind them that she is still there.
Her most recent one “Mary Liz Plans Her Post-Quarantine Shopping,” has her dreaming about the places she wants to go once the quarantine is lifted as she models different outfits appropriate for those adventures. Yes, it is subtle selling but more importantly, she encourages her viewers to dream about what comes next for them too.
Backyard Beans has gotten more active through its blog and newsletter too, providing recipes for make-at-home brews of specialty coffee drinks not currently available in the café.
Clean up, spruce up, prepare social-distancing strategies
“When we reopen, we are all going to have to look fabulous,” Curtin says. So, she is using the down time in her store to paint the walls and perform other necessary maintenance that is difficult to do when customers are in the store. “We are determined to keep the store looking good, so we are working a lot on our visuals.”
It’s time to look anew at your windows and doors, to give them a fresh washing, update window displays, and be sure to add abundant spring planters or hanging flower baskets at the door. Have a prominent “Open for Business” banner ready to hang out when the time is right.
And part of that essential maintenance is to make sure your store’s social distance strategies are visible, since these measures will continue to be in effect even after stores open. So, retailers might consider installing a plexiglass screen at the cash desk and post reminders to keep a six-foot distance between people when shopping.
If possible, open the bathroom with a sign to encourage regular hand washing. And for your staff, provide colorful face masks, hand gloves, and hand sanitizers on counters. Having the store smell clean will also be important upon opening.
This is also a good time to adjust store hours, perhaps offering early morning or after normal-closing hours for private shopping. In addition, because the strictures against gatherings of 10 or more people is likely to continue, specialty retailers need to plan for limiting access in their stores so that proper social distancing can be maintained.
Coming out the other side
In talking with both Barkyard Bean’s Adams and Leon & Lulu’s Curtin, both business owners have gone back to their roots and see this as an unexpected opportunity to start over, drawing from their many experiences of operating their businesses through the good times and bad.
For Backyard Beans’ Adams, it has reaffirmed the importance of building a brand. “Coffee shops are a dime-a-dozen. Coffee roasters are the same. If I go out of business, all of my customers will go somewhere else,” he says. “It just reaffirmed the direction we need to take our brand to become a part of our community. That brand isn’t necessarily about financial value, but it has community value.”
“If you get into business just to make money, you are not going to succeed,” Adams maintains. “People will see right through it. Just before coronavirus hit, we raised our drink prices fifty-cents across the board. Not a single person said anything about it, because they see our money isn’t going into fancy cars or building a bigger house. It is going right into our backyard, which is our employees and our community.”
And part of that community outreach for Backyard Beans now is giving a daily free cup of coffee to first responders and health care workers on the front lines.
Curtin finds herself back at the beginning too, having founded Leon & Lulu in 2006 right before the Great Recession hit.
“My idea of a good day has changed dramatically in the last month,” she says, likening the daily takings to back when she first opened 14 years ago. “Coming through the recession, we learned financial discipline so we always have had a cash reserve. That has gotten us through this time.”
As she is looking forward to reopening, she is worried that her fashion selections will be out of season so she has already marked them down 20%. But she anticipates the time her customers have been forced to spend at home will bring them back with renewed energy to refresh their home spaces.
Like immediately after the recession, she expects some customers may be reluctant to splurge on big furniture pieces, but she is fully stocked with decorative accessories, personal care items, and gifts to carry her through. And she is also expecting that her customers’ passion for jigsaw puzzles, which have been going gangbusters during the lockdown, will carry on afterward.
“The ultimate survival strategy right now is just to be there and help in whatever way you can,” she concludes. And that is what community retailers need to focus on.
If this crisis has taught us nothing else it is that we are all bound together in local communities. Together we stand strong and together our actions are helping defeat COVID-19 that threatens our health and our livelihoods.
I believe once the business lock downs lift, local community businesses, if they can survive, are the best positioned for rapid recovery and eventual growth. In particular, local community retailers will get an added boost because it is likely that people will hesitate to go back to the mall for fear of crowds for quite some time.
Rather, they will turn to Main Street retailers run by people they know and trust to fulfill their shopping needs, like Backyard Beans, Leon & Lulu, and your store.