Investments in E-Commerce Yield Big Gains for Small Businesses Amid Pandemic

Lou Vaccaro, co-owner of The Curtain Shop in New Rochelle, N.Y., has had an e-commerce site for more than a decade, but he sometimes wondered if it was worth the cost and headaches given that the local customers who browsed and bought in person generated most of his sales.

Gary Fisch, owner of four Gary’s Wine & Marketplace stores in New Jersey and one store in California’s Napa Valley, launched a mobile app a year ago, but was disappointed more customers weren’t using it.

Susan and Erin Blanton, the mother-daughter owners of the Pufferbellies toy store in Staunton, Virginia, have been able to process online orders ever since it opened in 2006, but it was a minor part of their business compared to in-store sales.

All that changed for those stores — and for many stores across America — as the COVID-19 pandemic hit and stay-at-home orders took effect.

For Vaccaro, Fisch and the Blantons, having an online infrastructure in place gave them a crucial lifeline that has kept them connected to their customers, and allowed them to keep selling.

“It’s handling a situation that none of us could have expected,” Vaccaro told CO—.

Before March 17, the mobile app for Gary’s Wine and Marketplace stores had 2,000 users. By the second week in April, 15,000 people were using it — a 750% increase in under a month. The app has been averaging 500 new users each day.

At Pufferbellies, sales have held steady despite the crisis, thanks to its ability to process online sales for local deliveries and long-distance shipments.

Tapping digital touch points to blunt ‘a huge disadvantage’

For small stores and restaurants, online sales, curbside pickups and local deliveries have, overnight, become critical survival tools.

In this crisis, the retail tenants “that have thrived, and that will continue to thrive, are those that have embraced that technology,” Ben Witten, vice president for finance and asset management at retail and mixed-use real estate development firm Trademark, said during a COVID-19 impact webinar hosted by location analytics company Placer.ai.

Witten was asked what he would have done to help restaurant tenants prepare for the crisis, had he known it was coming. “I would emphasize the importance of having a presence on UberEats and Favor and GrubHub to really boost their reviews,” and be well-positioned to sell via those platforms, he said in the webinar, attended by CO—.

“The tenants that aren’t doing meal delivery, they’re basically forced to shutter their business,” he said. “They’re at a huge disadvantage.”

“The thing smaller businesses miss is that you’re not getting online to take on Amazon,” retail consultant Bob Phibbs, CEO of The Retail Doctor, told CO—. “You’re getting online to help your customers, who want to support you, to buy from you.”

Phibbs said he has been impressed by the businesses that have figured out how to maximize their existing online tools, or to quickly add online services in order to keep selling during the crisis. “Because, let’s face it, you’re going to have to sell your way out of this,” he said. “That means now, but it also means later.”

Stores, restaurants, and even art galleries and non-profits around the country have come up with creative ways to make sales and bring in revenue during the crisis.

Avant Gallery is using a robot to give collectors guided tours of its art galleries in Miami and New York.

Seafood wholesaler Morningstar Fisheries, located near San Francisco, updated its website to allow consumers to schedule home deliveries.

Lowry Hill Meats in Minneapolis found its butcher store became so crowded when the crisis began that it switched to pickup and delivery, with customers texting in their orders.

From ‘we’ll never sell another thing’ to ‘we’re shipping a lot more orders’

The Pufferbellies toy store closed to customers, and moved to curbside pickup and delivery March 15. After the Virginia governor issued a stay-at-home order effective March 30, the store switched to delivery only.

“Every time we’ve had to make a change, I’ve thought to myself, ‘Oh gosh, this is it. It’s all over. We’ll never sell another thing,’ but in fact that hasn’t been what we’ve experienced,” Erin Blanton told CO—.

“Our local delivery really increased and I think we’re doing a better job of reaching people outside of our local market because we’re shipping a lot more orders now,” she said.

Blanton has also found that her local customers want to support the store during the crisis by buying online. “Right now, people are so concerned, and rightly so, about the local businesses they love,” she said. “They want us all to be here on the other side [of the crisis.]”

For Lou Vaccaro in New Rochelle, the ability to take online orders has been a mixed blessing. He is getting lots of orders, but can’t bring in employees to fill them due to New York’s rules for non-essential businesses.

“You can’t fulfill orders from home,” he told CO—. “If we can just get back to a point where I can have 30% of my workforce back, that’s what we need to survive.”

In the meantime, Vaccaro is trying to promote online offerings on his website that can be drop-shipped to customers directly from the vendors, while handling local pickups and deliveries himself.

‘Ready before everything hit the fan’

Liquor stores have been allowed to remain open in New Jersey and California, but Gary Fisch decided to close his stores due to safety concerns after seeing a surge in crowds at his Gary’s Wine & Marketplace locations as the stay-at-home orders took place. After one of his New Jersey stores became so packed with customers that every inch of the store was occupied, he closed the stores and notified his customers by email that he would be taking orders via the mobile app.

Fisch has offered online sales for years, but previously the majority of those orders were shipped to out-of-area customers, and involved sales of the high-end collector wines his stores are known for.

To accommodate pickup and delivery at each of the stores, the website had to add a link that connects shoppers to their local store.

Fisch’s sales were up 40% in March. While his customer count was about half of what it normally is with the stores open, the amount customers were spending online was significantly higher, as they stocked up for sheltering at home.

Fisch also is eager for his stores to reopen, but he believes the current crisis will trigger a permanent shift to more e-commerce and app-based selling.

He decided years before the crisis that he wanted a mobile app “because I see how people are shopping. I see the Amazon effect,” he told CO—. “You click, it shows up.”

“I always felt that’s the next wave,” he said. Before the COVID-19 pandemic hit, he was disappointed that more shoppers weren’t using his app. But he is glad he had it in place before thousands of shoppers decided they needed it. “We were ready to go before everything hit the fan.”

For those merchants that weren’t ready, Phibbs has this advice: Start now. Merchants have asked him, ‘Am I out of luck?’ And he said, ‘Nope, you start today.’”

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