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The return to bricks-and-mortar shopping is on the rebound, with consumer exuberance pushing supply chains to near failure and inventories for many goods to all-time lows. In fact, according to the Bureau of Economic Analysis (BEA), overall consumer expenditures increased 11.3 percent in the first quarter of 2021.
While it may feel and look similar to consumerism à la 2019, we cannot let the excitement mask the fact that interactions between businesses and consumers have fundamentally changed, creating new opportunities for how small businesses can generate revenues. And small businesses have gotten the message. According to the inaugural American Express Entrepreneurial Spirit Trendex survey of U.S. small and mid-sized business owners, 76 percent of those polled have pivoted or are in the process of pivoting since the pandemic, and among those, 73 percent expect to pivot again in the next year. As such, the “pivot” is here to stay.
One of the more obvious shifts that occurred included the increase in the number of small businesses conducting sales through e-commerce platforms. And while we are making great strides with getting more businesses online, there are many more actions small businesses can explore as part of their long-term “pivot plan.” To get started, let’s explore 11 shifts small businesses should take into consideration:
1. Add a Subscription Service
According to Forbes, from April 2014 to April 2018, subscription services grew by 890%. Small businesses can leverage this in two fundamental ways. The first option is to offer a monthly or quarterly subscription box that contains a curated set of products tailored around a specific niche or theme. Small businesses can send the boxes directly to customers or make them available for local pickup. According to a Clutch report, more than half of online shoppers (54%) say they subscribe to a subscription box service. The second option is to base your subscription service on a primary product or service draw. In 2020, Panera launched their $8.99 monthly coffee subscription, accumulating more than one million subscribers within seven months.
2. Transition a Core Skill/Expertise to Small-Scale Production
Etsy, the global platform for makers, artists, and artisans, grew the volume of sales on its marketplaces 118% in the last quarter of 2020, year-over-year, with overall revenue growing by 129% in 2020. From jewelry to jeans to bikes (and breweries and coffee roasters, of course), the opportunity to take a locally made product and scale it globally has huge potential. The barriers relative to logistics, production costs, and access to markets continue to lower and place a small producer on par with larger manufacturers. This shift shows no signs of slowing down as consumers continue to want products that speak to their lifestyles and enable storytelling. For Main Streets looking to grow this sector, check out the new book Recast Your City by Ilana Preuss.
3. Launch a Pop-Up, Pushcart or Mobile Option – It’s Not Just for Start-Ups!
A key ingredient for seeking out growth opportunities is to minimize financial risk while obtaining consumer feedback. As an existing store, rather than seeking out a second location immediately, try an alternative that is flexible, much cheaper, and provides you with the ability to try out multiple geographies for testing. Participating in a pop-up, buying a pushcart and tracking local events, or setting up a mobile operation are perfect options to explore. The Moody Dog in Belfast, Maine, operates both a pushcart and food truck to spread its consumer reach. For more information on this check out a blog post I wrote on the subject earlier this year.
4. Employ Tactics including Line Extensions, Complementary Product Mixes, or Adjacent Markets Opportunities in Growing Sectors
While typically a domain of much larger companies, small businesses can use these tactics to remain agile during economic downturns and/or consumer trends shifts:
5. Create a Third Space for Your Business
Given the rise in remote work, coupled with human instinct to want to be around other people, there is an opportunity for businesses of all types to leverage the rising demand for places to socialize and work remotely. Whether its through a parklet or in-store seating areas, third spaces can help a business build on engagement and connection to their consumers.
6. Allow for In-Store Pop-Ups or Shared Space with Complementary Businesses
With current supply chains constraining store inventories, coupled with bricks and clicks that may result in lessening the need of volumes of inventory on-site, we may continue to see the shrinking of retail footprints. Given the very nature of our downtown and older neighborhood commercial district buildings, leverage this shift as an opportunity to create in-store pop-ups or as a shared space with another business. In doing so, you bring new uses and functions to your store, without necessarily having to make the investment on your own. Previous business coupling examples had often involved food and drink in combination with products (i.e. bike store with a coffee café). Going forward, it is more important to think through your current inventory and customer mix and look for other businesses that can encourage engagement in either off-cycle times or attract a unique customer mix different than your own.
7. What was Temporary is Now New Norms
During the height of the global pandemic, many businesses started delivery and pick-up services and offered outdoor dining and shopping options. While these shifts may have been projected as temporary in some communities, the writing is on the wall: consumers are not turning back to 2019. If you were one of the millions to utilize these often new services or experiences, most studies indicate that new habits have been formed. As such, small business owners and new entrepreneurs will need to incorporate as part of their overall business models.
8. Having a Website is Different from e-Commerce
Likely obvious, but while great strides have been made by small businesses and entrepreneurs to add an e-commerce sales channel, there is still a long way to go. From April 2020 to January 2021, MSA research suggests that small businesses not engaged with e-commerce dropped from 63 percent to 53 percent. However, of those businesses, less than one-third are conducting more than 10 percent of their business sales online. So, while we must continue to generate more small businesses with “bricks and clicks” options through tools like MSA’s newly released Main Street Online Tool, we must also link our small businesses with the skillsets to leverage these opportunities for broader sales generations. Using something like GoDaddy’s Empower digital marketing coursework represents a great starting point. Watch for the upcoming release of a new MSA portal to access the Empower program coming in mid-summer.
9. Watch for Emerging Social Media Platforms for Business
Numerous small businesses leveraged social media platforms like Instagram and Facebook as effective, free tools for reaching consumers during the pandemic. Two others you may want to consider as emerging platforms for showcasing your business are TikTok and Snapchat Spotlight. Given that both are newer, they do not currently have the same algorithms that require strong following before your videos are highlighted for users. As such, it is easier to build a following in a relatively quick period for those small businesses presenting interesting content, whether demonstrations, something educational, or showcasing a personal story that connects to consumers.
For inspiration, check out Artesana Soaps in Downtown Camden Main Street, Arkansas, on TikTok or view one of their videos at right.
10. Cut Costs while Gaining Time and Efficiency
Any tactic to reach new customers or gain additional revenue channels takes some time and resources. The shift to engage in new technology tools may help in the long run to create more efficiencies in your business operation and cut costs allowing for additional scaling resources. Four areas that represent most likely to impact cost and time include:
To understand what software packages might be most advantageous to your particular/unique situation, consider taking the Main Street Online Tool assessment.
11. Think Creatively About Labor
While this is not a commentary as to the issues surrounding workforce hiring issues – especially in retail, restaurants, and the hospitality sectors – solutions for addressing labor in the near-term will require creative approaches. A few ideas to consider:
Summary
The global pandemic presented challenges for small business owners, the likes of which we have never experienced. At the same time, opportunities for growth and cost-effective tools for reaching consumers through new revenue channels has greatly accelerated. As Main Street programs, while we are not necessarily direct small business counselors, we remain critical connectors to both technical and financial resources that provide the ideas and funding to execute on the next set of small business pivots.
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New Orleans, Louisiana © Bobby Boone
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Cincinnati, Ohio © Janet Hurn
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Charlotte, NC © Pixabay
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Laramie, WY © Laramie Main Street Alliance
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© Allapattah CDC
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© Main Street South Carolina
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© Historic Valley Junction
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© Notice Pictures
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Stockbridge, GA © Stockbridge Main Street
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Spencer, IA © Spencer Main Street
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Boston, MA © Kyle Klein
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Franklin, TN © Brandon Jean
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York, PA © Sully Pinos
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Evart, MI © Storyville
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Ottumwa, IA © Main Street Ottumwa
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Wixom, MI © Carissa Serylo
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Oceanside, CA © Road West Photography
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Colville, WA © Colville Together
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Camden, AR © Kimberly Moore Davis
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Silver City, NM © Silver City MainStreet
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Skowhegan, ME © Kristina Cannon
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© JENNIFER E. WOLF
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Wheeling, WV © Wheeling Heritage
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Charles City, IA © Mark Wicks
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Little Rock, AR © Main Street Arkansas
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Memphis, TN © Four Way
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Biddeford, ME © Heart of Biddeford
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Tulsa, OK © Dr. Tiffany Crutcher
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Fremont, CA © Fremont Economic Development
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Ripon, WI © RetailWorks, Inc
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Batavia, IL © April Duda Photography
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Asheville, NC © Ablohkin
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© Cindy Shebley
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