One of the advantages of Emporia Main Street’s affiliation with Kansas Main Street and the National Main Street organization is training. We consistently receive access to high quality data that highlight newest business, organizational, and community development trends. We also hear new business questions that emerge from market changes, and we use those questions to facilitate deeper discussions to promote business growth among existing businesses and guide new entrepreneurs.
A major question facing local businesses and organizations is what elements of their pandemic based business planning should they keep as the pandemic evolves? What are the business elements that should fade into the past as things move forward? New data highlight national business trends that businesses can utilize to improve sales, customer traffic, and align with customer expectations.
The following are some business strategies that businesses emphasized during the pandemic that you may want to evaluate for your business moving forward:
- Subscription services- From April 2014 to April 2018, the “subscription box” industry in the United States grew by 890%. During the pandemic, we saw local businesses and nonprofits pivot to some box based strategies that brought customers in on regular intervals, and some non-profits that boxed up items or experiences to promote sales and interaction (Farmers Market boxes, and Emporia Arts Center kids art kits are good examples). Box subscriptions aren’t going away. Is this strategy something you can put together to draw in more consistent income from your customers?
- “Rundle” strategies- Rundle’s are “Recurring Revenues Plus Bundled Services”. This strategy includes a base service that has add on components to drive increased traffic and sales. The example used for the Kansas Main Street quarterly training was a bike store that provided a monthly tune up and a 15% standard discount on regularly priced items for $29 a month; plus providing a monthly newsletter to your niche crowd. The tune up creates traffic, and the discount creates sales volume and customer loyalty. The newsletter simply provides top of mind awareness and highlights products/services. Amazon Prime is a good national example of a rundle, but locals can produce the same sorts of recurring packages with direct deposit payments to increase sales, traffic, and customer loyalty.
- Great tech-spectations- A June 2020 survey of small business owners highlighted a number of different technical changes and service augmentations to interact with customers during the pandemic. Of those businesses that made changes (like contactless payment, in-app ordering, home delivery, curbside pickup, shopping via social media platforms, etc.), 67% plan on keeping the changes permanent. Some of the changes may require increased production capacity and staffing, but the pandemic exposed both businesses and consumers to some new technology and services. Some of those expectations are here to stay.
- E-commerce emphasis- ETSY sales grew by 147% in 2020. Customers are utilizing sales platforms to browse local businesses and generate sales opportunities. Many sales platforms have become more intuitive and easier to integrate into a traditional sales environment. A variety of businesses were “saved” by e-commerce capabilities during the pandemic. As pandemic restrictions change, businesses will need to determine if they continue to highlight a growing online sales sector, or if they want to revert back to a physical only sales pattern. For those businesses looking to make the push into online sales, contact Emporia Main Street for funding assistance.
- Small scale production- Supply chains during early stages of the pandemic were awful for several business types. Small stores simply couldn’t obtain some items, other products were delayed, and prices fluctuated wildly. In response, some businesses decided to create their own products to stabilize their product supply chain. People contracted with local bakers for a bread supply, coffee shops started roasting their own beans, distillers made their own sanitizer. The creation of products on-site allowed businesses to generate unique products with a stronger pull factor. Once some up-front costs were paid, in-house production allowed for increased profit margins per item.
- Middle man movement- Businesses found new ways to interact with customers directly during the pandemic. Most people experienced a few Zoom calls with customers that highlighted products or services. “Live” videos gave consumers a sneak peak at new merchandise. Online learning, direct to consumer releases of movies on streaming platforms, tele-medicine, and other strategies removed the middle space requirement from consumer interaction. Some businesses used the pandemic time to develop direct production conduits with product producers that they could market directly to consumers. What tech will you keep to encourage direct consumer interaction?
- Pop up testing- Most people have heard of a pop up shop. Locally, we see pop ups that exist as booths during events, or artists “popping up” in businesses for First Friday Art Walk. Pop ups are usually a new business testing their product or service idea before making a larger storefront commitment. The early stages of the pandemic required many existing businesses to “pop up” in different areas as they tested new products outside of their storefront. Pop ups aren’t just for startups anymore.
- Third space creation for remote work- I think everyone understands that remote work was prevalent for a huge percentage of the population over the pandemic. National polling suggests between 16% and 25% of jobs that went remote this year will stay that way permanently. For those that have worked from home, there are some pros and cons. Eventually the cons of working from a disconnected space at home, with intermittent chaos (especially if you have kids at home) requires an off site work space. These third spaces provide an opportunity for businesses to retain traffic or create new business types. Co-working spaces, dedicated spots in the local coffee shop, or alcohol purveyor can help give people spaces to do work and boost the bottom line of existing businesses. Marketing yourself as a third space may draw traffic over the coming years if you are willing to invest in the necessary infrastructure.
- Line extensions- Businesses should review the items they sell on a consistent basis. If a particular item category is doing well, it may be time to look at line extensions. If you are selling more bikes, you may look at bike storage items. If you sell more skin care products, you may want to find ways to go deeper into a given line. If outdoor wilderness items spike in sales, it may be time to clean out underperforming items and extend your line of more profitable products. We are in a time period where consumer preferences are shifting. Businesses that track their inventory and make decisions based on consumer sales patterns can maximize their profitability.
Business change is inevitable, but the pandemic has forced some businesses to innovate and make changes they probably wouldn’t have otherwise implemented. Which of your changes are permanent? How will your business continue to evolve? Look at some of the strategies above and determine your next steps. If you need help, contact Emporia Main Street. Remember that there will be a special “Small Business Day” as part of the National Main Street Virtual Conference that highlights business growth and pandemic mitigation strategies. CLICK HERE for information.