Finding Main Street Customers Online

By encouraging and cultivating unique, local, independent commercial sectors, retail along Virginia’s Main Streets is on the rise. However, it is a brave new world that Main Streets retailers are operating in.

“Capitalism is creative destruction,” Richard Sylla stated in a recent Entrepreneur article. “Old models get outmoded, and new models come in and take over.”

Just as Main Street organizations must create effective fundraising plans to secure diversified and stable program funding, retailers must make every effort to diversify their customer base to ensure stable and growing revenue streams. The article in Entrepreneur states that the future of retail will have some online component and some offline component. Catering to consumers wherever they are,and in a robust, customized way, is a key growth strategy. Online sales accounted for 5.2 percent of total retail sales in the third quarter of 2012, according to the latest reading from the U.S. Department of Commerce, which tracks the category. That was up 17.3 percent from the same quarter a year earlier. By contrast, total retail sales over the period rose by only 4.6 percent.

Main Street Economic Restructuring committees should provide training to help their local Main Street retailers develop a balanced online/offline business strategy. For example, in January, Longwood SBDC guest speaker Marc Willson, retail consultant for Virginia SBDC, provided two free trainings for area retailers directly related to this topic. The first session, “Doing Business in a GAFA World,” GAFA stands for Google, Amazon, Facebook, Apple, was designed to help retailers attract more traffic and improve sales by smartly embracing relevant social media technologies and strategies. The second session, “Competing with the Big Boys,” reiterates that big box stores and national chains are strong competition for local, independent retailers and that these retailers need to have a strategy to keep their existing customers buying and to win new customers. More information about trainings provided by Marc Willson are available here.

Economic Gardening Strategies

In these tough economic times when communities are struggling to retain existing businesses and to prevent more storefronts from closing up, attracting new businesses that will create new job opportunities is extremely challenging. Many communities are working hard to overcome these ills by creating an environment that fosters entrepreneurship. Research has shown that small businesses are the leading job creators in this slow recovery. 

In his article titled “Fostering entrepreneurialism: Making economic gardening work downtown,” Chuck Eckenstahler lists seven things to consider when developing an “economic gardening strategy.”

1.       Help surmount the hurdles – Provide assistance with navigating through and completing legal and regulatory requirements of establishing or expanding new businesses.

2.      Host entrepreneurial cafes – For many new entrepreneurs, traditional physical space is not as important as it once was. Providing a ‘space’ (bricks and mortar or cyber) where entrepreneurs can network and share ideas, if applicable to the locality, should be part of the strategy.

3.       Carve out opportunities within the economic landscape – It is important for both the entrepreneur, as well as the host community, to identify the existing supply and unmet demand of retail goods and services. This typically lies on the shoulder of the entrepreneur, however, Eckenstahler and many economic development practitioners would argue that to ensure successes, this should be a shared responsibility.

4.       Raise capital to create a Shark TankMany businesses fail due to lack of capital. “Community economic development strategies may require assembling social venture capitalists,or other creative financing mechanisms like crowdfunding.

5.       Support population diversity – “Create support programs that celebrate population diversity and embrace groups that have a high propensity to form new businesses.”

6.       Create a “Match-up” marketplace – Create opportunities to match the “entrepreneurs’ needs with available support capacities.”

7.       Celebrate success – Create a media campaign that regularly highlights new business formations and promotes the locality/region as one that supports new business startups.

“Adding some or all of these suggestions to your economic gardening strategy will enrich the soil for planting the seeds of new business.”