As retailers prepare for expanded operations after an initial reopening on May 8, many have already shifted their marketing and business strategies in response to the COVID-19 shutdown and to what could be long-term changes to how customers shop.
Retail has been one of the hardest-hit industries in Washington state since the pandemic response began in March. According to the state Employment Security Department (ESD), data for May 3-9 shows that 8,965 retail workers filed unemployment claims – a six percent increase from the previous week and the third highest – just behind educational services (10,165) and health care (13,340). A total of 1.78 million claims have been filed since March 7, with $3 billion in benefits paid to more than 751,000 individuals.
At a May 14 press conference, Governor Jay Inslee announced that his office has finalized the retail standard for Phase 2 of his four-phased reopening plan. The first phase was approved on May 8 which allowed for curbside service. 10 counties have successfully applied to the state Department of Health to enter Phase 2.
During the press conference, Inslee said: “there’s a number of businesses now that have increased their operations and I presume that’s going to help in our employment figures, but we’re a long ways from getting back to normal economic activity.”
While the Washington Retail Association (WRA) has put together a COVID Safety Operations Plan to help stores reopen, the big question for many retail employers is how to recover from the loss of business activity they have experienced over the past two months. During a May 15 webinar for the WRA, retail consultant Bob Phibbs told WRA members: “the reality is you’re going to have to sell your way out of this.”
However, the restrictions imposed by Inslee’s standards offer additional hurdles for businesses that rely on traditional brick-and-mortar operations.
At the press conference, WRA President Renee Sunde said retailers that have been able to continue operating during the outbreak have “mastered the art of curbside and drive-up service. Businesses and retailers of every size are innovators at heart, because that’s what great customer service is all about. It’s not the same as having a customer…in a store, but I do believe retailers are looking at how they can be creative during this next phase.”
Among business owners to operate during the shutdown is Blake Garfield. He owns the Seattle-based furniture store Bedrooms & More, and his business relies primarily on sales from in-store customers.
“There’s always someone willing to represent something (online) better than it really is,” Garfield said. “They buy online and learn their lesson and go to a store to see what they’re getting. We’ve spent a lot of years really differentiating ourselves from most companies where there’s been this kind of race to the bottom in terms of quality.”
With the shutdown keeping the physical store closed, Garfield said the business has tweaked its website by making it “more geared toward someone being confident to make that purchase online,” which in the past made up less than two percent of total sales.
Changes included streamlining the steps necessary to make a purchase and highlighting items in stock. He said the website changes have also increased phones sales “because customers are able to get their final questions answered…without having to touch it (product) physically.
Garfield said his business now also makes personal deliveries free of charge for addresses within 20-30 miles for low-priced products that otherwise would be shipped through UPS. “My hope is when we reopen those things kind of pay off.”
And while people’s approaches to retail shopping will have to change, Garfield still sees physical, in-person purchases as a critical part of his business model. Although online sales have increased, it has “not resulted in massive amount of online sales. It’s better, but it won’t keep us afloat. I think there’s always going to be a need for someone to understand quality. It’s about making sure that people that do have to come in feel comfortable.”
Although federal small business loans are available, they come with stipulations such as rehiring all employees. That, coupled with new standards imposed on the physical stores, could put a lot of retailers in a bind.
“The gamble is we’ll keep everybody and we go bankrupt, or get this company as lean as possible,” Garfield said.