As shoppers stay away, small stores seek refuge online

For small retailers across the country, the coronavirus outbreak has turned an already challenging business environment into never-ending uncertainty.

Amy Witt might have 20 customers on a good day in her Dallas women’s clothing store, and then none the next.

"It’s a rollercoaster we ride every day," says Witt, whose store, Velvet Window, reopened May 1 after being closed since March. "We’re doing everything we can to cover expenses and keep the store stocked with inventory."

Many of Witt’s older customers are still shy about going into stores, especially since the virus has resurged in Texas. As she reopened the store in May, Witt told The Associated Press she planned to use services like private shopping hours to encourage reluctant customers to come in. The strategy has helped but sales remain well below Witt’s expectations. She hopes to boost sales by selling at an outdoor market where shoppers can feel more comfortable.

Still, Witt is grateful to be open — there are empty stores in the shopping center where Velvet Window is located.

Small retailers, especially those selling non-necessities like apparel, are still struggling months after state and local governments lifted shutdown orders aimed at containing the virus. With the virus far from under control in many areas, however, consumers worried about getting sick are staying home and doing their purchasing online or, if they venture out, going to big stores like Walmart and Target where they can do one-stop shopping.

The weak sales and erratic customer traffic have forced store owners to be creative in hopes of persuading customers to stop in rather than order from a big online retailer. But for some owners, disappointing sales and an uncertain outlook have forced them to close their stores for good and stake the future of their businesses on the internet.

Washington was one of the first epicenters of the virus, and one of the first states to shut down its economy. Ambika Singh felt the impact immediately: Her company, Armoire, rents clothing to professional women. Her customers, suddenly stuck at home, no longer needed outfits for the office, dinners and business trips.

Singh has permanently closed her two stores in Seattle, knowing they couldn’t be sustained. She’s adapted her online business to meet customers’ rapidly changing needs — they wanted different clothes, like luxury loungewear or more dress shirts to look business-like on videoconferences even as they wore sweatpants

Having lost customers due to the weakened economy, Armoire’s revenue is down about 35% from February, which was its best month ever. One of Singh’s biggest challenges now is marketing to new customers as she tries to replace the shoppers who left.

"As we’ve lost the physical connection with customers, can we rebuild?" she says.

The internet has been a refuge for many retailers during the pandemic, says Carlos Castelan, managing director of The Navio Group, a retail consultancy based in Minneapolis. He noted that Shopify, a company that hosts e-commerce websites, had a 71% increase in new stores in the second quarter compared to a year earlier.

"They’re urgently setting up these e-commerce models to serve their customers," he says.

The most recent retail sales tallies from the government show sales at clothing sellers, which tend to have physical locations, fell nearly 36% from May through July. But online and other non-traditional retailers saw their sales soar 26%.

Small retailers have also learned to be more customer-friendly. They’re using, for example, texts to communicate with shoppers and making pickups easier by setting aside dedicated parking spaces so people can grab and go, Castelan says. And stores are letting shoppers know they are trying to keep everyone safe.

"The primary driver has been as much about convenience and safety. That’s more the story rather than merchandising," he says.

The internet has been a lifeline for Antonelli’s Cheese Shop. The Austin, Texas, store remained open during the government-ordered shutdown, but many consumers stayed home, sharply reducing store traffic. The shop also sells to restaurants, which stopped ordering as they were forced to close. The shop’s business is still down 20%.

Owners John and Kendall Antonelli say they’ve managed to survive by taking the events they normally run on their premises, like cheese tastings, and putting them online. They’ve had as many as 150 people take part in a tasting, with many people ordering cheese in advance and picking it up curbside. More recently, with fewer people sheltering at home, they’ve been more likely to get 50 people, but that is still about double the number of attendees they had pre-pandemic.

The Antonellis revamped their website so local customers can order a la carte instead of pre-selected packages — that’s more expensive for the store, but it keeps people happy and shopping.

The Antonellis have learned that several cheese shops in other cities have gone out of business, so they know they too could be at risk.

"We are potentially considered one of the success stories — and what I mean by that is we’re still operating," Kendall Antonelli says.

Business has been slow since Mallory Shelter’s Washington, D.C., jewelry store reopened in June. Shelter, whose store bears her name, responded to the pandemic and shutdown by pouring her marketing efforts into her website. It now accounts for 75% of her revenue, up from 8% before the virus struck, but her overall revenue is down by half. She also has changed her product mix, focusing more on custom items that can have a more personal meaning for buyers.

A big question is whether her in-store business will recover in time for the holiday season that starts three months from now.

"This is the month when I’m preparing for the holidays. But that looks really hard when you don’t know if you’re going to be open, if there’s going to be another wave of the virus or what people’s spending will be like," Shelter says.