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.