Pandemic forces small Delaware retailers to pivot to survive
Delaware’s downtown districts strived to rebrand themselves as the place for one-of-a-kind shopping and community experience, but the COVID-19 pandemic has forced dramatic change in the independent retail business model.
For decades, big box stores have been slowly taking market share from small businesses in designated commerce areas like Downtown Districts or Main Streets. Independent stores see less than a quarter of all retail shopping today compared to about half of sales in the 1980s, according to a study completed by the Institute for Local Self-Reliance. But gradually, Main Street Inc. programs and other grassroots efforts have led the way to preserve and revitalize historic commerce corridors.
Nationwide retail and restaurant spending totaled $526.1 billion in August, an increase of 0.6% from the previous month, according to the U.S. Department of Commerce. Spending has been steadily growing over the past four months, but that may falter now that extra federal unemployment benefits have lessened. Clothing and accessory sales skyrocketed 105% in June versus May, when shutdown orders were starting to lift, but now customers have tightened their purse strings again.
Through the pandemic, big-box stores stood to profit more than smaller, independent stores. Giants like Walmart and Target that offer groceries remained open for one-stop shopping in the early days of the crisis while Main Street businesses were not categorized as essential services.
“I hate to see a small business close,” said Jenn Marsh, the owner of Stubborn Soul Boutique in Middletown. “It’s a scary time for sure, and with the overhead with brick and mortar, sometimes I wonder if we would have made it this far. The challenge with Amazon and Walmart is that we’re not them, and we’ll never be them. We have to find another way.”
Making the jump online
Marsh opened Stubborn Soul Boutique with her mother first in Clayton, but soon the writing was on the wall. She said there wasn’t a draw in the small Kent County town, so to keep the boutique alive, it moved to rising Middletown, where young families are flocking for more space. Business was solid with annual big-draw events like the Peach Festival and smaller ones like adult trick-or-treating. But Marsh said it was also just small business owners trying to help each other thrive.
“Sometimes it was events that drew people in but mostly it was through self-promotion and promoting your neighbors,” she said. “If a customer was looking for something a little more specific that I didn’t sell, I’d point them down the street.”
But that communal atmosphere evaporated overnight when the pandemic hit. Marsh’s mother started having health issues in early days of the pandemic, and with too many unknown factors at play, she decided it was best to shut down her Main Street storefront and sell solely online.
“We already did online orders so that was easy to transition. We didn’t buy any summer clothes because, in my situation, we didn’t know what was going to happen,” she said. “We’re about 60% to 65% of where we were last year. But I think there’s potential to grow it, I think we’ll be OK.”
It was a different story for First & Little Boutique right up the street from where Stubborn Soul Boutique. First a pop-up venture, Amber Shader specialized in women’s and children’s clothes – and had little for online sales.
“It was definitely a scramble to get everything online, with getting pictures of every piece of merchandise and getting the listing just right,” Shader said. “Just because we were closed for weeks, doesn’t mean that people didn’t have birthdays or graduations or need gifts. To meet it, we worked hard on our online presence.”
In-store purchases at First & Little Boutique were down 76% from March to June, but Shader estimated online sales were up 3,000%.
Other small stores like My Roots in downtown Dover that have yet to build a set online shopping platform on its website and instead use social media to entice customers back to its store. Co-owner Lori Llewellyn said capital was spent on new inventory before, and now that the foot traffic is not there, the store hours and staff are greatly reduced.
“We don’t know when we’ll have the e-commerce up. Before it wasn’t a huge priority, and now it’s almost a necessity,” Llewellyn said. “When we opened, the idea was to walk in and be inspired by what design you see to buy a new outfit. It’s centered around having that personalized shopping experience.”
In the past, small town commerce districts used to be where people could shop for groceries, appliances and everything needed. But with large retailers offering every imaginable ware along with groceries while undercutting prices through bulk purchasing, downtown districts and Main Streets shifted to offer something that could not be found in a big-box store.
But the key to lifting a downtown district is buy-in from either an organization – like a Main Street Inc. designated program or a chamber of commerce – or local merchants, said Central Delaware Chamber of Commerce President Judy Diogo.
“Dover’s Downtown District is strong because we have young people who are shop-owners who bring a lot of vibrance to the area, and the strong base of government and college students. But they must have things to do and things to stumble across,” she said. “Everyone has really embraced Dover.”
First Fridays were big sale days in Dover, with the Downtown Dover Partnership sponsoring musicians to perform in stores and offer food to customers. But now, Llewellyn said musicians performed outside and food is off the table per federal health guidelines in the September First Friday.
Other key draws were standards like the St. Patrick’s Day parade and the Fourth of July fireworks. The fall street festival OktDoverFest was also a huge hit in the past six years since it started.
“It will be interesting to see what the customer interest will be with these events, since Amazon and Walmart are really taking off right now,” she said. “I always wanted to have a small business, and Downtown Dover made the logical choice. It had a lot of foot traffic and it was a very friendly area. With a brick-and-mortar business, there’s not a lot of positives in a pandemic.”
To contrast, Lewes’ Historic District already faced some challenges with its narrow streets and sidewalks and small buildings. Coupled with a pandemic that hit the tourism industry particularly hard this summer, Lewes Chamber of Commerce Executive Director Betsy Reamer said it’s been a hard summer.
“Who’s coming here has all been local because of the constant back-and-forth about the quarantine list. September we usually have retirees come down to beat the crowds and young couples with strollers,” she said. “Anecdotally, I’ve heard our older residents say they’re not comfortable getting out and they’re much more comfortable shopping online.”
With the homebuilding boom in Middletown, the town has been adjusting to find the best ways to draw in families from the suburbs to shop local. With no Peach Festival this year, Marsh said the experience of shopping local can be hard to sell these days.
“The whole experience of shopping at a local store and other businesses was one of the big draws for us to go to Main Street,” she said. “There needs to be some out-of-the-box ideas to come up with new ways to bring people in and safely, because this will be the new normal for a while.”
The new experience
With the experience of jumping between stores with friends on a festival day gone for now, independent retailers are pivoting to recreating that on an online forum. Utilizing free social media accounts, many are boosting their Facebook presence with Live events, VIP sales through group pages, or one-on-one appointments.
“It’s almost like building a brand. You must be more personable in front of the camera, which is something I’m trying to do,” Marsh said. “With the brick-and-mortar place, you get to talk with the customer and if they come back, understand their tastes and what they’re looking for. You need to find a way to get your face out there.”
First & Little Boutique also started hosting personal styling events one-on-one with those customers. Shader believes that down the line, there might be more retailers investing in sanitizing clothes between people trying them on, so events like this are a way to decrease the chance the customer will send it back.
The personal touch will remain the hallmark of independent clothing stores, but it will look different.
“There’s a lot of competition online, so I try and focus on things like a handwritten note with each purchase,” she said. “Amazon is going to get bigger, but that’s fine. That’s not who my customers are, and people adapt. There’s going to be someone who wants a unique gift, and not something you can find at 12 stores.”
For the moment, My Roots had to cut back on store hours because Llewellyn stays home with her 10-year-old daughter and the foot traffic has yet to return. But her hope is the future will embrace small stores as part of the experience of a destination. After all, the pandemic will end eventually and there will be an audience eager to get out and socialize.
“The whole experience is finding something unique that you love and want to buy, it’s not the prices,” she said. “Before this we had a lot of forward momentum and a lot of good things were happening. Now it’s about surviving it and building from there.”
By Katie Tabeling