By Editor’s Note: This 2019 article has been updated to reflect data and trends from the effects of COVID-19 on the Columbia business community.
Let’s take a brief trip back through the recent history of major retail trends.
In the 1970s, shopping malls burst onto the scene. Then the big-box stores such as Walmart and Target started cutting into the malls’ share. Then, in the early 2000s, online shopping began siphoning off customers from both the malls and brick-and-mortar stores.
What do those three movements have in common? They damaged local small retail businesses — such as the ones lining the streets of downtown Columbia — more and more with each successive wave.
And, while small businesses were already struggling to deal with competition from big box stores and online shopping, 2020 threw a curveball: the COVID-19 pandemic.
Between staff out due to quarantining and local health orders limiting capacity — and at a certain point closing non-essential businesses — locally owned stores and restaurants began not just struggling, but dying.
Just within the past nine months, more than 10 businesses in Columbia have closed due in one way or another to the pandemic, including Cha Boutique, Formosa, Bambino’s Italian Café, Piano Nightclub & Bar, Yin Yang Night Club and a few locally owned franchises, such as Ruby Tuesday and Houlihan’s.
According to the U.S. Census Bureau Small Business Pulse Survey, conducted this spring, approximately 31.4% of respondents said they expect it to take more than six months to get back to their usual levels of operation. Here we are more than six months later, and most businesses would tell you they aren’t anywhere close to “normal.”
Richard Robertson, co-owner of Booches, posted on Facebook on November 14 that they had a great Saturday at the bar/restaurant, but that in reality they still did 50% fewer sales than a pre-COVID Saturday.
Even though businesses might start looking busier, especially with holiday gift shopping, keep in mind they are still struggling, and while COVID-19 and its effects have drastically affected almost all businesses, issues that existed prior to the outbreak still have a compounding effect.
A 2017 report in The Economist predicted that 10,000 retail stores in America would shutter by the end of the year, a 50% increase from how many closed during the depths of the Great Recession in 2008. A report from the U.S. Department of Commerce in February showed that, for the first time in history, online shopping held a higher market share in the United States than “general merchandise” providers such as department stores, big-box stores and warehouse-club stores.
If the chains are feeling the squeeze, be assured that the independent retailers are as well. And then some.
“For the most part, people have recognized that this was coming,” says Nickie Davis, executive director for The District. “A lot of businesses have taken steps to increase their online presence as well — whether that’s selling, doing promotions or whatever that might be — but it’s definitely affected a lot of our businesses, particularly retailers.”
There is a glimmer of good news, though, in the doom and gloom of the looming era of online retail supremacy.
One, it’s been a slow-moving front, so business owners have had more than a decade to figure out what they can do to combat it. Two, there are a number of ways smaller businesses can be nimble and adaptive, providing customers products, service and experiences that they cannot duplicate in an online environment.
Small businesses can even use the tools of their supposed demise to their advantage.
“Essentially, you have to embrace reality and understand and leverage the fact that clients are now better educated,” says Mills Menser, president and owner of Buchroeders Jewelers, which has been in Columbia since 1896. “So, the things that you can have a sustained competitive advantage on, you need to double down and use that information to explain why.”
Using Online, But Not Selling Online
If you go to the website of D&M Sound, you’ll see the store’s products, prices and click-through sites to more detail about each item, much as you’d see on the site of an online retailer.
Don’t expect to add anything to your cart, though: D&M Sound doesn’t sell online. Part of the reason is that some of the manufacturers with which it works don’t allow its vendors to sell their products online.
The main reason, though, is that D&M wants customers coming through the door. The online showroom is part of what draws them in.
“We don’t sell products; we sell our expertise,” Moore says. “People don’t buy just a TV from us. They want it installed, a custom remote programmed for that and their cable box and their DVD, the whole bit. Our site actually does have the capability of selling online. It’s just not activated.”
Local stores that aren’t going all in on e-commerce can still use their online presence to drive business.
Robert Flynn, general manager and gemologist with L.C. Betz Jewelers, a fourth-generation, family-owned business that has operated in Columbia since 1983, says the store pushes new images of its products on its website and Facebook and Instagram pages almost daily. Customers respond, which leads to in-store conversions.
Menser says Buchroeders uses Facebook as a tool for generating leads as well, and Dryer’s Shoe Store owner Justin Riley says his store maintains an active presence on social media to advertise as well as be more responsive to real-time consumer demand.
Dryer’s has been around since 1956, and while helping customers find the perfect shoe may not have changed much in the past 63 years, the immediacy of the customers’ tastes has.
“People will see trends, fashions or styles online, and then they come into the store looking for them,” Riley says. “We have to be a little more up on what the latest trends are and what the demands are because people are seeing them instantaneously online. It’s not a big deal for us because, since we’re an independent store, we can bring in whatever we want, whenever we want. We don’t have to go through a long process like a corporate store would.”
Even if a store is not selling online, creating and maintaining an active and responsive online presence is still crucial to its bottom line.
Hope Horn, an adjunct instructor at the University of Missouri’s Department of Textile and Apparel Management and Crosby MBA program in the Trulaske College of Business, says a company should be employing multiple digital strategies to forge meaningful bonds with consumers.
The initial greeting and handshake can happen online, before the customer sets foot in the store.
“You need to engage the consumer emotionally,” says Horn, who had a long career in the retail and wholesale industry before becoming an instructor at Mizzou. “There are ways to connect with a consumer digitally and act digitally, even though you’re selling the majority of your product in the store. You can create an online presence through Facebook pages and a website that has content, videos, links, blogs, things that make consumers feel like you’re part of the digital community, even though your shoppers come from Broadway.”
Curate and Compete
Back in 2008, Menser made a move to create another division of Buchroeders called Diamond Banc, a nationwide network through which Buchroeders can source its diamonds from avenues such as other diamond stores that are closing or from estate sales.
Bottom line: They can keep the price down.
“When you buy from the recycled diamond industry, it’s just how low can you negotiate. The cost of mining and manufacturing has been removed,” Menser says. “It just played hand-in-hand with consumer demand to sell jewelry in that economic environment. How we source our goods, diamond-wise, is completely different.”
There are two big reasons that consumers have flocked to online shopping — the convenience and ease of ordering from their homes and the low prices that large online retailers are able to offer. Moore, of D&M Sound, said one of her colleagues in the home-entertainment industry presented this conundrum rather bluntly: Customer loyalty is only worth about 50 cents.
Meaning, if you can’t get within 50 cents of Amazon, how loyal will your customers truly be?
“That’s kind of cynical, but it does speak to the challenge,” Moore says with a laugh. “Everybody is price-oriented. We all want a good deal. Nobody wants to pay more.”
Riley says Dryer’s has been fortunate in the fact that a number of companies the store carries don’t allow online retailers to sell their products at a discount, which negates that advantage.
And, as far as product goes, there is something local stores can offer for which some consumers are willing to pay a little bit extra: a curated collection.
Instead of customers wading through page after page of brands and online specifications to find the best 50-inch flat-screen TV to suit their living rooms, Moore and her colleagues can go to trade shows armed with experience and know-how and come back to Columbia with the products they feel will best fit their clientele.
Flynn says LC Betz employs a similar expert’s eye when compiling its selections.
“When we buy gemstones and jewelry for our inventory, we’re inspecting everything in person,” Flynn says. “We look at stones under a loupe, look at how everything is manufactured. We have relationships we’ve formed with vendors and stone cutters over decades, and vendors come to us with top-quality goods. We are selling many one-of-a-kind, museum-quality and custom pieces, very different to what online jewelry retailers have to offer.”
Plus, Riley says, local shops can offer a different kind of convenience that online can’t match just yet. Amazon offers same-day delivery but at an extra cost for its non-Prime members, and it recommends that you order before noon if you want that product before 9 p.m.
“That’s one thing that, no matter what, the Internet can’t provide — somebody walking in and walking out with an item,” Riley says. “That’s where it comes down to our store and other retailers like us: If you have the type of product that is in demand, people want to get it the day they want it. That’s a big process that really plays into our favor versus the Internet, really. I do see a lot of that with our local businesses here.”
Experiential Shopping
Horn says she has noticed an interesting trend recently. Online retailers such as Warby Parker and Bonobos are dipping their toes into the brick-and-mortar world.
They’re starting to realize that modern consumers want more than pictures on a screen and clicks of a mouse.
“The consumer wants it all. They want to be able to find it, touch it, see it, think about it, tweet about it, and they want to do all these things any way they want to do it,” Horn says. “Online is still a huge part of these retailers’ business, but even they realize that in a major metropolitan area, they have enough customers that would benefit from coming in and being able to touch the merchandise.”
This is why, when the Lululemon athletic apparel company was in its growing stages, it would set up pop-up stores in new markets and partner with yoga instructors. Lululemon provides the clothing, the instructors provide the classes and, in turn, the company immediately cultivates a native customer base by building a community before selling anything. The company opened a temporary storefront on Ninth Street over the summer of 2019, with the possibility of becoming permanent, and it’s still there.
Davis says businesses in The District have embraced this aspect of competing with online. They’re trying to create a scene so that, even if consumers go downtown without any intention of buying, well, at least they’re in the area.
“There are a ton of amazing events our businesses host,” Davis says. “They collaborate on different things they can bring to downtown and, by making this a destination spot, people are going to come down here anyway and end up shopping at our unique boutiques down here. You can’t get that one-to-one interactive experience online, and the interesting things you find downtown in local boutiques, you just can’t get online.”
Davis says Skylark Bookshop, with its variety of readings, and the Makes Scents fragrance shop, with its custom scent-making workshops, are examples of downtown businesses that blend events with products to make unique experiences for Columbia consumers.
Sales are obviously the paramount objective in these happenings, but even unconverted leads can also result in increased word of mouth or social media chatter about downtown businesses. And, Davis says, around 64 percent of the money Columbia residents spend in the community stays here.
“The ‘shop local’ push is fairly new,” Horn says. “If you think holistically about shopping, think about the rise of the farmers market. That’s the parallel. Go to the farmers market to buy the cherry tomatoes that were grown 50 miles away as opposed to going to the grocery store. Go to your local store and find something new and unique to support the community. I think it’s the
same phenomenon.”
If you’re going to be a small local retailer in an online shopping world, you need to be able to offer some sort of added incentive in order to survive.
Whether it’s service, experience, price matching, continuing conversations with consumers or some mixture of all the above, adaptation is key.
“Embrace it, leverage the positives and don’t have a victim mindset. Figure out how you can make yourself better as a byproduct,” Menser says. “What works today likely won’t work tomorrow. Business evolves more in five years now than it used to in 50. Spending time in the past or justifying yourself out of business is never the way to go.”
