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Re-Opening Retail: Small Town Thoughts

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As Paula notes in her piece this week, much of the US is starting to “re-open”. And last week, I saw my small town (Grass Valley, California) take the first tentative steps towards opening its downtown for business. Grass Valley is more of a working town than its next-door neighbor Nevada City - complete with a couple of Safeways, Walgreens, CVS, Staples, Kmart, JC Penney, and a few other of the modern conveniences. According to the Frommers travel guide, “Nevada City and Grass Valley are far and away the top tourist destinations of the northern Gold Country. These two historic towns were at the center of the hard-rock mining fields of Northern California. Grass Valley was California's richest mining town, producing more than a billion dollars' worth of gold.” The town has maintained its Gold Country charm in the downtown area with a few blocks of trendy restaurants and boutique stores that cater not only to the locals but to a growing number of daytime tourists coming up from the San Francisco Bay area.

But those are just the kind of shops that the coronavirus lockdown has put in danger. The county leadership is well aware of the challenges that “single shingle” merchants are facing. A spokesman for the Grass Valley Police Department said, “To say there has been confusion is to put it mildly... we have been trying to weigh, and understand what is allowed and what is not in light of the health (concerns). The most important thing is public safety, but we are completely aware that people’s livelihoods are on the line”.

The small business owners in the town are facing the same existential threat from the lockdown that small businesses across the entire country face. And like small businesses everywhere, they probably only have a very short runway to get off the ground again. On May 5, the U.S. Chamber Of Commerce released the results of a nationwide small business poll that revealed that, “...more than one in five small businesses (22%) say they are two months or less from closing permanently. Self-reported business health also continues to decline: 50% of small businesses feel their business is in good health, down seven points from last month.”

It’s been interesting to see how local retailers have handled the lockdown period, and now are handling the slow re-opening. Restaurants seem to have fallen into two buckets: those that threw in the towel immediately, and those that adjusted by offering takeout options. There doesn’t seem to have been any baseline requirement to whether a restaurant sinks or swims. For example, town-favorite Italian and Mexican food sit-down restaurants quickly began offering curbside pickup for phone orders, while several “fast food” oriented restaurants folded within weeks of Governor Newsom’s shutdown mandate. Most surprising for me was that downtown favorite ice cream & candy store seems to have maintained a healthy volume of curbside business. I guess there’s never a bad time for good gelato....

But several boutique stores closed their doors forever, as is now evident as the downtown has tried to re-open. Ruminating on this for awhile, I think I’ve come up with simple rationale to help understand the “survivability” of a small retail offering in these troubled times.

The first and most important question is, is the product being sold “routine” or “treasure”?

By “routine”, I don’t mean “everyday stuff”. I mean products that are well known and that consumers love and want to replenish regularly. One example in my town is ... olive oil. One store, The Olive Groove, both delights consumers by introducing them to new specialty oils and vinegars, and replenishes customers’ supplies when they get low. The great thing about having a fair amount of the assortment as “routine” (i.e. not new to the consumer) is that shoppers don’t have to physically experience the product to make a purchase. The Olive Groove makes replenishment orders really easy: just go to the website, fill out the order, and the order confirmation lets you know when the order will be ready for pickup (for example, “Wednesday after 10 AM”). The retailer’s website is complete and easy to navigate. While it’s not possible for consumers to browse the store to discover new delights, the retailer can at least get by until the “all clear” signal is given by local authorities.

Another downtown business like this is the Peaceful Valley Nursey. Spring comes whether there’s a pandemic or not, and Peaceful Valley can’t miss their busiest season. But it turns out that the retailer is one of America’s largest online stores for organic supplies – who knew?

If a store is all about “treasure hunting”, surviving during slow re-opening will be tough. Consumers naturally want to experience the product before buying, but without a physical storefront, the only other alternative is to ship direct to the customer and hope for the best. Unlike larger retailers that can absorb the costs of a lot of eCommerce returns, small retailers would be strained to breaking point. And that’s if they have anything more than a vanity website or Facebook page, i.e. a real eCommerce site.

That brings me to the second question: eCommerce - yes or no?

One local women’s boutique, Beautiful, has seized the moment by creating a nice eCommerce site for an online ordering capability with curbside pickup. The retailer addresses any concerns about its return/refund policy directly: “We would be happy to refund or exchange your regularly priced online purchase(s) for up to 2 weeks. Call ahead and let us know how we can help. Then bring back your item(s) to our store during Curbside Hours or your agreed upon appointment time. Call us to let us know you are curbside. Although we truly do miss you, please do not come in the back door. We will promptly issue a refund or exchange.

Initially, the owner was opposed to having a website, but in the face of the growing crisis and shutdown, decided that the store would need an online presence to survive. A local eCommerce service provider, Sugar Pine Studios, developed the site for the retailer. According to the owner, “most local retailers who have websites are using Shopify, but I wanted to support the locals.”

Last Words

One local retailer I talked to worried that, “People don’t understand what they’re really doing when they ‘Shop Local’. They’re not just supporting the store – they’re supporting the community, supporting fire fighters and police officers, and helping owners provide for their families. I was born and raised here – this is about my town, not just my store.”

Not only would the retail world be a boring place without enprepreneurs with a vision being willing to put it on all on the line, but small towns would never survive. I can’t think of a better reason to “think small” when you go shopping again as this country slowly re-opens its doors.

 

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Articles & Opinions May 19, 2020
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