What to Expect as You Reopen Your Business
So you’ve reopened your business or are planning to do so.
That means you’re in a better condition than many other small business owners
that were forced to close due to the disastrous
pandemic.
While you’re opening, you should be aware that it won’t be a
walk in the park. You were given permission to do so by state and municipal
officials but the path to success is covered with fickle, disheartened
consumers and knotty supply chains.
Perusing a variety of stories about this phase of society’s
battle against the coronavirus, I’ve assembled a host of suggestions and
thoughts that will help flatten the road.
First of all, if you are fortunate enough to have the funds
on hand to open your business and re-staff your store or plant, take heart in
the prospect that worker pool is well stocked. According to the US Census, despite the growth in online
retail sales, the retail workforce continues to have a substantial presence in
the US labor force and the number of people employed in retail jobs has grown
this decade.
In 2018, 9.8 million workers had jobs as cashiers, retail
salespersons or first-line supervisors of retail salespersons, up from 9.6
million in 2010. Together, these occupations accounted for 6.3% of the total
U.S. labor force.
Young, less educated women earning low wages, said the
census bureau, characterize the typical retail worker in the United States.
Minorities are overrepresented in retail work but non-Hispanic Whites still
make up the majority (60%) of the retail workforce. In 2018, around 1.3 million
retail workers were employed by grocery stores. The count of retail workers in
general merchandise stores, including warehouse clubs and supercenters, was
around 865,000. In addition, 535,000 worked in department stores.
Furthermore, with unemployment painfully high, your chances of
selecting employees from a deep barrel are very good.
Understand
Conditions and Trends
Your success will also be based on your understanding of the current conditions and emerging trends as you embark on the
new road to viability. Covid-19 is the
catalyst for innovation throughout person-to-person commerce, according to
several specialists. Retailers that have not been able to adjust to the new
economic environment are leaving Main Street and their absence is creating additional
opportunities for forward-looking, versatile entrepreneurs.
Covid-19 has drastically changed consumer and retailer behavior in
unpredictable ways, causing the historic retail recession. Every day newspapers
are filled with stories about business closures. Today’s retail news was led by
Century 21’s announcement that it is
closing all of its locations everywhere.
The current recession that came as a result of Covid-19 was triggered by
an unprecedented, abrupt, and sustained slowdown in consumer activity. Virtually
overnight and for a sustained duration, consumers stopped purchasing goods,
going out to eat, traveling, and even leaving their homes. They were scared.
If you’re in the travel industry, then you aware that the United Nations has reported that the
tourism industry faces $1 trillion in losses and 100 million jobs are at risk from
Covid-19.
Big companies are going bankrupt at a record pace, but
that’s only part of the massacre. By some accounts, small businesses are
disappearing by the thousands amid the Covid-19 pandemic, and the drag on the
economy from these failures could be huge.
As if department stores didn’t have enough troubles, it
looks like shoppers are starting to walk away from visiting their physical
stores as the Covid-19 pandemic continues. New research from Placer.ai, the
consulting service that monitors retail foot traffic, shows that shopper visits
to Macy’s, JCPenney and Dillard’s
started to trail off in July following substantial gains in the two months
before. Citing the surge of Covid-19 cases across most of the country this
summer, Placer.ai said “a clear trend has emerged across the department store
sector with recoveries stymied by a resurgence in (virus) cases leading to a
reversal of the positive trends seen in May and June.”
At each of the three national retailers, store traffic began
to fall starting in the second half of June and continuing to July. Prior to
that the department stores saw impressive gains as they reopened and consumers
began to emerge from stay-at-home requirements. While none of the stores were
hitting 2019 levels, they were edging closer until pandemic numbers began to
rise again.
Products,
Interactions, Convenience, Trust
Business owners must be primed to look for important product
and preference trends that will help them satisfy consumers and stay open for
the indefinite length of the pandemic. Among them are these four: product mix, consumer interactions,
convenience factor and trust.
While several well-known brands are shrinking their real
estate footprint and closing many of their locations, shoppers continue to
value convenience, but now they’ve added at least one new requirement to their
list: safety. “Success has been measured by how clean and safe you can
make the shopping environment and experience,” David Birnbrey, co-CEO of
retail-focused real estate advisory firm The Shopping Center Group,
told Commercial Property Executive. In order to feel comfortable,
consumers need prompt service, social distancing, contactless transactions and
hand sanitizers. “The in-store experience needs to emphasize the
customer’s health and well-being,” Glenn Brill, managing director in FTI
Consulting’s real estate solutions practice, added.
In other words, business owners must do their research, keep
their eyes peeled and ears to the ground, offer customers easy
and safe shopping experiences, and confidence that the likelihood of
contracting the coronavirus in their stores is at a minimum. Sell compassion
and service rather than price.
“Retailers can expect the status quo of retail to be
challenged. With direct interaction between stores and shoppers replaced by
virtual touchpoints, retailers may even need to reconsider the role of stores
in the customer experience. Processing returns, supply chain management, and
fulfillment processes may also need to be reimagined,” observed Matt Marsh,
Minneapolis managing partner of Deloitte LLP.
Rather than going it alone, thinking that you have all of
the answers, retailers will do better when they understand what’s happening on
the street and embrace the new approaches and trends. They are indeed different
than they were during Christmas 2019. You may have read that several large
department stores have already announced that Black Friday will be a thing of the past. As a small business, how
will you participate in the annual or semiannual small business sales days? Foreplaning,
creativity and ingenuity will win the day. Here’s another concept: Anticipation.
Online Prospects
In order to boost sales, many brick retailers have gone to
the other side and launched online
divisions. A year ago, 81% of
shoppers surveyed by Gallup said they never turned to the Internet
for groceries, leaving online shopping at around 3% of all grocery sales, or
about $1.2 billion, according to a survey by Brick Meets
Click/Mercatus. But in June, in the middle of the pandemic lockdown, online
grocery sales in the United States hit $7.2 billion.
Amazon, which
owns more than 500 Whole Foods
stores, reports that online grocery sales tripled year-over-year
and it increased grocery delivery capacity by more than 160% and tripled
grocery pickup locations during the second quarter of this year. Physical
store sales saw revenue drop 13% to $3.8 billion during Q2.
That’s a noteworthy solution but remember you’ll need
staffers to pack, load and deliver the purchases. Beyond that option, you might
want to consider Walmart’s decision
to experiment with drone deliveries.
Pandemic shopping has ushered in wider store aisles, new
methods of sanitation and less-crowded stores. Customers with masks wait
outdoors or enter in a numbered pattern. Researchers say shoppers want these changes
to stay. Nonetheless, there are still those inconsiderate buyers who don’t wear masks and walk in the wrong
direction. In order to assuage the concerns of rule-abiding customers and
assure that they won’t look for other stores, owners and managers may have to
strictly enforce health and safety regulations by even resorting to evicting transgressors.
Health concerns have also accelerated the growth in payment apps and self-checkout. Walmart is testing a new system that
replaces traditional checkout lines with an open plaza ringed by 34 terminals.
Shoppers can scan their purchases, or wave down an employee to do the scanning
for them. Kroger intends to double
down on customer choice, offering an array of options including self-checkout
stations and an app that allows consumers to scan and pay as they shop, as well
as traditional cashiers.
The Retail Closet
Pampering your
customers is probably the customer relations experience that has turned the
corner and staring retailers in the face. Some say that this is best demonstrated
by bringing the store to the consumer.
Michelle Collins, founder & president of A
Non-Agency, is an experiential marketer who is convinced that individualized
experiences will be the next big thing in retail. She told CPExecutive.com that
her new concept, dubbed “the retail
closet,” will be successful because it’s safe, sustainable and
entertaining.
Collins explained that retail closets are small retail
spaces within commercial or multifamily properties, where brands can bring
their collections in front of customers who can come in solo or with a few
guests. By making an appointment and pre-sharing their preferred styles and
sizes, clients can shop undisturbed. This personalized and exclusive shopping
environment even allows for an entertainment element “like exclusive
dining options where customers can entertain their guests as they shop, sip
champagne and enjoy small plates prepared under the purview of one of New
York’s or Los Angeles’ hottest chefs,” Collins said.
Small businesses, the so-called mom-and-pop shops, also face
challenges that can be overcome with the proper steps. According to Dr. Arturo E. Osorio, assistant
professor of entrepreneurship, management and global business at Rutgers University, Newark, NJ, “Current
conditions have set a new definition of ‘normalcy’ for business, in general,
that might be particularly present for small businesses understood as
single-owner/family-owned operations below $1 million a year. Among these
challenges, you will find: lower customer density allowed, less frequent
visits, more purpose-driven interactions with lower chances of negotiations,
and technology challenges serving customers/clients.”
Osorio recommends the following actions:
• lower
customer density allowed and/or less frequent visits. Provide opportunities to
have follow-up sales and interactions outside of the brick-and-mortar location.
For example pre-empt visits with phone calls and/or online service. Provide
follow up opportunities to access products and services that complement the
original purchase. Offer automatic re-order with no hassle delivery protocols;
• more
purpose-driven interactions with lower chances of negotiations. Prepare
“bundle-deals” for customers so they get better value propositions on their
purchases, allow for subscription style services so clients engage in long term
relationships with the business; and
• technology
challenges serving customers/clients. Provide free training opportunities to
staff and clients/customers. Make clients/customers feel comfortable in their
transition to virtual interactions. Ensure the business is ready to hold
virtual/distance/remote operations.
Osorio adds “it is necessary that businesses create a new
service/product delivery system that allows for online sales followed by
no-hassle home delivery. This new type of operations need to leverage the
business identity and quality of services while expanding the reach and provide
a new way to interact with customers.” He suggests that the latest technology
should be used to facilitate this new virtual space such as: video-conferencing,
cloud storage, virtual teamwork, e-commerce platforms, online payment, and
website domain services.
And what are they talking about on social media? Here are
the top words on Twitter, according to GobalData: stores – 323 mentions, e-commerce
– 205 mentions, shopping – 93
mentions, sales – 77 mentions, and startups – 46 mentions. The searchers
are looking for what retailers, businessmen and consumers are talking about in
those categories. So if you Tweet, you should look for hashtags with those
words.
In today’s business climate, book and school knowledge is
helpful as at all times. However, contemporary successful business owners and
entrepreneurs must also possess a high degree of creativity, flexibility,
courage and speed.
As I’ve written before, you can also avail yourselves of a
range of cost-free consulting services for small businesses. The New Jersey Small Business Development
Center (NJSBDC) comes to mind as a wonderful institution that helps
entrepreneurs launch and grow their businesses https://njsbdc.com/. All states have
comparable organizations. Try them and they’ll help you thrive.
