How small businesses adapt to survive in times of crisis
Retail sales through July of the season to date are stable from last year depending on the United States Census Bureau. However, the breakdown by category shows a sawtooth performance between the categories. Discount stores and warehouse clubs, grocery stores and home improvement stores have performed well amid the COVID-19 pandemic with sales increases of 7.4%, 14.7% and 12.7% respectively. However, some segments of the retail industry have suffered greatly and many of them include categories where small businesses operate. Gift card and vintage clothing stores and other sundries are down 6.6%, clothing and accessories stores down 41.5%, and sporting goods stores and leisure activities down 3.0%.
Small businesses face unique challenges in a crisis
Small businesses have unique challenges and are constantly striving to make ends meet. They continually seek funding and income opportunities to postpone them during normal economic times. When events such as the coronavirus pandemic hit the US retail market, it became much more difficult for some of the small businesses to overcome obstacles such as mandatory store closings or handling strict social distancing practices. These obstacles, coupled with the uncertainty of future business, made this year particularly difficult for small stores.
Ann Cantrell, owner of Annie’s Blue Ribbon The general store and assistant professor, Fashion Institute of Technology, said, “Doubt and uncertainty are never good for business.” Cantrell has a modern general store in the heart of a booming Brooklyn neighborhood, combining the charm of a country general store with the convenience of city living. Being the sole owner of an eCommerce store and business has posed its own challenges, but those that many small businesses face. Cantrell says Annie’s Blue Ribbon Store has never experienced such uncertainty. Brands are just as careful with customers as they are with team members and reduce their inventory and supply in the process. In the past, when a crisis arose like September 11 or the 2008 financial crisis, communities could stand together and move forward. With the current pandemic, social distancing has made it difficult for people to work closely together for recovery. Cantrell says, “Doubting when things will change has been particularly difficult.”
Small business agility offers the opportunity to pivot quickly
Cantrell knows that small businesses can jostle and pivot much more easily than large businesses and says, “We do it because we have to do it, our lives depend on it and we have to pay the rent, cover the expenses and help our employees. because they are our family. “Big retailers would have said they refuse to pay rent, but small businesses often cannot take such bold positions. Cantrell adds,” We have to push the envelope and find a way or risk shutting down . “
In an interview with Daniel Hodges, CEO of World Retail Forum, Rebecca Minkoff, designer and founder of Rebecca minkoff, discussed the importance of reacting to the current environment and reflected on the 2008 financial crisis. Minkoff said the brand was successful because it met the customer where it was. Prior to 2008, the prices for his handbags were $ 495.00 and $ 595.00, which was a steal at the time. There were maybe five brands that made great bags at this price point. “And when the recession hit in 2008, there just wasn’t that customer, she was still the same person, but she just wasn’t making that kind of money, had no savings or felt uncomfortable spending so much. on a bag. Rebecca Minkoff has cut prices in some cases by several hundred dollars and increased during the recession by 548%. Minkoff said: “Not everyone needs to lower their price, but you need to be very clear about who your customer is and what the value for the brand should be.”
When Minkoff started her business in 2001, she had a five-piece capsule collection that included an “I Love New York” t-shirt that became an overnight hit after being launched two days after September 11. The t-shirt struck a chord with consumers and the timing, while unplanned, hit the market perfectly. Rebecca Minkoff now owns three national stores, eight international stores and distributes products in more than 900 stores around the world. Even though the company has grown, agility still exists within the brand which operates with an entrepreneurial spirit. Rebecca Minkoff has just launched a new fragrance but has had to pivot due to the current coronavirus pandemic. The fragrance was launched exclusively on the brand’s eponymous site for the first month of August, but is now being rolled out at Macy’s.
Building strong customer relationships is essential
Part of the success of small businesses is listening to their customers and retail partners to create products that are relevant to the market. Minkoff is considering how some of the retail partners would demand that exclusive products stand out in the market. Minkoff said, “I really try to tailor different and special things for each of our retail partners to provide them with a unique value proposition for their customers.”
Cantrell explains how social media is essential in helping to build good relationships with customers and how the brand is connecting these days, especially with limited in-store shopping experiences. With so many people virtually visiting the website, Cantrell says, “I love our Instagram Stories and I really try to show my real voice and connect with customers here.”
Small businesses are the lifeblood of the community and tend to be resilient, but they also need support. Cantrell said, “Supporting them keeps the creative energy alive in neighborhoods and brings jobs and money back to the people who need them most.” For small businesses to survive, Cantrell suggests keeping cash flow tight and spending slim, negotiating with the owner, communicating with your customers in meaningful ways to stay relevant, and hopefully emerge as an even bigger business. strong on the other side of the pandemic.
True courage leads to survival
Small businesses are disjointed, nimble, and struggling to survive the current pandemic. “The daily barrage of information about the virus and the current social environment in our country, made worse by the upcoming elections, is wearing us all down,” Cantrell says. Small businesses have fewer resources, less funding, and lack sophisticated IT and supply chain models. But the only characteristic that small businesses have is outright. Small businesses have a strong desire and need to survive, so many of them will.