Pandemic brings opportunities to local businesses

If nothing else, 2020 will go down as a year that was, well, memorable. For small business owners, it has been nothing short of challenging. Pre-pandemic, retailers had been hurting from the shift away from in-person shopping as online purchasing increased an average of 23%, year-over-year annually, with an expected 95% of all purchases to be conducted through e-commerce by 2040. Small business owners struggled to compete with marketplace giant Amazon who accounted for 49% of all online purchases in the U.S. in 2018.

Additionally, an Adobe report released in June reported that the pandemic had accelerated the shift to full adoption of e-commerce by 4-6 years. According to TechCrunch, this year's overall in-store retail decline expected to be 60%.

While that may not feel like good news for retailers — there's a silver lining in every cloud and those willing to evolve with this digital transformation — a virtual pot of gold at the end of the rainbow.

At the Small Business Development Center, we've been watching the trends and working with local business owners on our current markets' challenges and changes. Through it all, we've learned that there is some good news, coupled with some great opportunities. We're here to share some of our takeaways along with the creativity, resilience, and successes of our some of North Idaho business owners.

• North Idaho loves it’s small businesses — We’re seeing an emerging brand loyalty in local communities that echoes recent national survey findings — consumers are increasingly more likely to support a local business even if it means paying a little bit more. While we’ve always been encouraged to shop local, we are heeding this call more than ever before, recognizing the vulnerability of our favorite coffee shops, boutiques and restaurants during this time, and indeed our dependence on them.

Bean & Pie owner Katy Bean can attest to that. Following two years of pop up stores and farmers markets, she and her husband built a commercial kitchen in a Sherman Street store front and opened their first pie shop in January. Just two months later, businesses declared ‘non-essential’ were required to close to the public. After an urgent appeal to her customer base via social media and a menu overhaul to meet current customer needs with take and bake meals/pot pies, North Idahoans showed up with pocketbooks and declared that pie is, well, essential to us.

Opportunity — Connect with local community. Love your customers and they love you right back.

• Online stores allow you to meet customers where they are — In our visits with area business owners, a common story emerged. Businesses that already had an ecommerce store in place when things were shutdown experienced a remarkable increase in online sales.

When Rick Evans of Evans Bros Coffee saw online sales spiking just after store closures, he recognized that they hadn’t lost their customers, they were just drinking their favorite blends from home. By reaching out to them with subscriptions services, special brews and bundles, they kept product moving, customers engaged and sales up as well as a strengthened relationship with customers once stores reopened.

Opportunity – Meet customers where they are for a deeper, more personal customer relationship.

• Two is better than one — An online store is a second sales channel, think second store location, at a lower cost.

We visited with Beth of Mix-it-up in Coeur d'Alene, who bought the Sherman Street shop in 2019. As a new business owner, she recognized the vulnerability of just one source of revenue, further limited by the fact that the majority of sales come from seasonal tourist traffic. Her move to open an online store last Fall paid off. March store closures completely dried up revenue and didn’t leave a bright outlook for tourist traffic. She applied for the PPP and put her staff to work putting the remainder of stock into online store and connecting with past customers. Revenue from the online store covered essential costs during closure and when lockdowns were lifted, she was able to invite customers back via website and offer conveniences such as shipping purchases directly home.

Opportunity – An online store provides a second stream of income.

• Analytics is the secret sauce — As a business owner, just claiming your Google online business listing allows you to see how often someone in the area searches for products you sell if you showed up in their search, and even if they used those search results to call or access directions to your store location. Additionally, an online presence will give you access to a wealth of information that will empower you to make better decisions about your business, what products to offer, and how to meet your customer's needs — both on and offline.

One business learned from analytics that many of their customers were browsing the site from mobile devices and that adopting a mobile friendly website could improve conversion rates.

Opportunity — An online presence gives you better info which makes for better business.

• 2-day shipping gets kicked to the curb — Supply chain disruption and ‘buy online-pick up in store’ (BOPIS) have resulted in the same day advantage for local merchants. With 80% of surveyed respondents reporting an item searched for on Amazon to be ‘out of stock’ and the extension of guaranteed delivery dates, more local customers have been able to find goods locally, buy online through an ecommerce enabled website and pick up in store. Curbside pick-up with zero shipping costs will beat the big guy every time. Little surprise a recent Forbes study reported a 195% increase in BOPIS sales in May.

Mountain Madness Soap, a hometown boutique featuring handmade soaps and other natural products, offered same-day delivery and curbside pick-up during store closures. Once stores reopened, many customers still use and love the curbside pick-up, a service they will continue to offer.

Opportunity — Allow for online payments and make temporary conveniences a permanent offering.

Seven months into this pandemic and one thing is clear. There is no ‘back to normal’ and for small business owners to be successful in this ‘new normal’ is going to require embracing ecommerce and building relationships of trust with customers. Taking hold of those opportunities will pay off in the long run as businesses emerge leaner, more efficient, and better able to serve their customers.

Although, that’s easier said than done. While many website builders boast that you can have a website set up in a weekend, that’s generally pretty optimistic. Follow that up with other tasks such as developing a digital marketing plan, learning to utilize analytics, choosing payment processor, setting up shipping, just to name a few, and it’s no wonder more than half of U.S. small businesses don’t already have a website.

At North Idaho College’s SBDC, in addition to business coaches, they have two Digital Marketing experts as coaches, Jamie Morgan and Deborah Dickerson. They assist business owners on how to build or improve their digital revenue stream.

In addition, eCommerce coach, Samantha Dascomb helps businesses in improving or building high performing ecommerce sites by guiding them through each step and stage of eCommerce business.

Even in this turbulent time, there are many consumers seeking better products and solutions. Those who are willing to make the digital adjustments can capture new customers and change the trajectory of their businesses.

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Katrina Boyer is the marketing assistant for the Idaho Small Business Development Center at North Idaho College.