Two hundred feet – about a 60-second walk – separates LuLi Boutique LLC from Frog & Toad LLC in Providence. But the pandemic experiences of the two Hope Street retailers are worlds apart.
Frog & Toad made a splash early on, debuting T-shirts, glassware and other gift items bearing Gov. Gina M. Raimondo’s iconic admonishment to “Knock It Off.” Since then, the novelty gift shop has continued to rake in sales through online and curbside pickup, capped off with what co-owner Asher Schofield says was double the revenue on Black Friday weekend – the unofficial start of the holiday shopping season in November – compared with the prior year.
Catty-corner from Frog & Toad sits LuLi Boutique, which has not bounced back in the same way. Owner Elise Mischel lamented the litany of challenges her clothing and jewelry boutique has faced: creating an e-commerce store on the fly, laying off employees and struggling to qualify for state or federal relief programs. That she was forced to shutter her doors while launching the e-commerce store at the start of a state shutdown, while big-box retailers remained open, only added to the pain. While the holiday season proved better than Mischel expected, it still did not bring in “normal” holiday sales numbers, she said.
The experiences of the two seasoned Hope Street merchants – Mischel has been in business for 10 years while Schofield has nearly 20 years under his belt – have played out across the state and the country, with certain retailers thriving while others have been battered during a health and economic crisis that is far from over.
There has been no clear secret to survival, big or small, tech-savvy or not. The fates of retailers have been difficult to predict based simply on size or technological capabilities. One thing is certain, according to retail analysts: The way consumers shop and how retailers court those customers have been forever shifted.
“It’s a fallacy that we will just bounce back and return to the way things were,” said Kristen Regine, a marketing professor in Johnson & Wales University’s College of Business. “If I’m ever going to go into a store again, there better be a compelling reason. If not, why waste my time?”
For many shoppers, the comfortability with e-commerce has never been higher – a record 60% of consumers surveyed in October by the National Retail Federation planned to shop online during the 2020 holiday season due to the safety concerns, supply-chain shortages and state restrictions imposed by the pandemic.
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WHAT’S IN STORE? Elise Mischel, owner of LuLi Boutique in Providence, says sales during the holiday season were better than expected, but they were still lower than in previous years. / PBN PHOTO/PAMELA BHATIA[/caption]
‘INCREDIBLY SCRAPPY’
While internet giants such as Amazon.com Inc. are perhaps the biggest “winners” of the pandemic, including the all-important holiday season, small and midsized businesses with robust online presences stand to benefit, too, said Kate Ferrara, principal in Deloitte Touche Tohmatsu Ltd.’s Risk & Financial Advisory practice.
Schofield says combining personalized touches that small-business owners already offer with e-commerce and savvy social media strategies can make all the difference.
“No one is going to survive a devastating financial year like this one better than a small business, because we’re so incredibly scrappy,” Schofield said. “It’s not just about being accountable to shareholders; it’s being accountable to ourselves.”
Frog & Toad still hasn’t reopened its Hope Street or downtown Providence brick-and-mortar stores, instead focusing all of its efforts on e-commerce and curbside pickup. The transition was by no means seamless – there were layoffs and retraining of employees who previously worked storefront jobs, and changes to the type of inventory the company ordered.
But its ability to react quickly and establish an even more-defined niche of kitschy, Rhode Island-centric products – everything from the “Knock It Off” gear and pandemic essentials to collections such as “Gifts for Your Racist Grandmother” or “Gifts for Your Confusing Gen Z Child” – were the key to success, Schofield said.
“It’s a way to set yourself apart from the big-box retailers selling mad volume but without the personality,” he said.
Mischel, who did not have a robust e-commerce store before the pandemic, struggled to gain momentum. Since reopening her store in the summer, she has seen an uptick in sales – both online and in person – but “nothing like a year ago.”
The lack of an e-commerce store, or even a website or Facebook page, hasn’t proven to be a roadblock for Wickford Gourmet Factory Outlet. The North Kingstown kitchen supplies retailer saw a boom in business soon after it reopened over the summer, despite its nonexistence on the internet.
Joe Dubet, who owns the shop with his wife, Donna, credited their success to their longtime presence in the community, as well as demand for the products they offer – more time at home has prompted many people to begin or renew their interest in cooking, which means a need for the dishes, appliances and gadgets they sell at factory outlet prices.
“When everyone is home and eating on the same plates, they realized they needed to replace some stuff,” he said.
Yet Dubet remains stubbornly against bolstering his sales through an e-commerce store, or even a website, even if a second shutdown were to force him to lock his doors again. Yes, he knows his attitude might put his business at a disadvantage, but at 77 years old – a self-described “dinosaur” – he is not interested in venturing into the online world. He would just as soon sell his business to a more tech-savvy owner, if it came to that.
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IN-PERSON SHOPPING: Customers peruse the merchandise at the Wickford Gourmet Factory Outlet in North Kingstown. Sales have held up despite the store not having any presence on the internet. / PBN PHOTO/ELIZABETH GRAHAM[/caption]
LOCAL FLAVOR
While the streets of Wickford village in North Kingstown – usually filled with throngs of shoppers during the holiday season – were virtually empty last month, the small-business community remains in high spirits.
One source of optimism: a strong commitment among shoppers to spend their dollars locally. The “shop local” idea – touted especially during the holiday shopping season through events such as Small Business Saturday – has long had local support. But in 2020, perhaps more than ever, more customers appeared to be following through.
“I’ve been in this game for 20 years beating the drum of shopping local, and I’ve never seen the groundswell of support for locally owned businesses I’ve seen this year,” Schofield said.
Kristin Urbach, executive director for the North Kingstown Chamber of Commerce, agrees.
“People are realizing, if we don’t have small businesses that are the character of our community, every town will be cookie-cutter,” she said.
The safety appeal of a smaller, less-populated store can also help small businesses compete with big-box retailers, Mischel said. That customers know, and can see, owners are wiping down door handles after every new person walks through, puts them at ease – which at this time offers even more allure than a closeout discount.
Indeed, the rebound that began in June, when many state sanctions lifted and stimulus money hit bank accounts, appeared to reverse in November, with a 1.4% drop in national retail sales, according to the U.S. Department of Commerce.
A Jan. 15 Commerce report showed that sales continued to slide in December, falling 0.7% from a month earlier. The loss in sales was even steeper when automobiles, gasoline, food services and building materials were removed: a 1.9% decline from November to December.
In some cases, small businesses have been immune, or less impacted, by the supply-chain shortages that left national competitors out of inventory for months.
Among them was S&W Television & Appliance, which continued to receive new products faster than its big-box competitors as a result of its participation in a large buying group of independent dealers, said co-owner Dave Exter.
The family-owned East Providence business set record numbers in traffic and sales each month in 2020, adding three people to its existing 15-person staff to meet increasing demand, Exter said. Its success was so great that Exter opted not to apply for popular federal and state relief programs.
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A QUIETER PLACE: Domenic Schiavone, right, Warwick Mall manager, says the mall’s retail tenants reported steady sales through December, but he acknowledges Black Friday – the start of the holiday shopping season – wasn’t as hectic as it has been in the past. / PBN PHOTO/MICHAEL SALERNO[/caption]
UNEVEN ASSISTANCE
For others, small-business support through programs such as the U.S. Small Business Administration’s Paycheck Protection Program and the state’s Restore Rhode Island grants have been crucial lifelines. Yet criticism remains that federal and state aid programs – offering billions of dollars of relief – still didn’t help some businesses.
Mischel, for example, received a Restore RI grant but did not apply for a PPP loan, believing the forgivable payroll loan would be of little help for a business the size of LuLi Boutique – she has just one employee besides herself.
The Hope Street Merchants Association, of which Mischel serves as vice president, did get a grant through R.I. Commerce Corp.’s Take it Outside program to set up a weekly outdoor holiday market in December.
Midsize companies such as Boscov’s Department Store LLC were also excluded from these programs. That meant that 8,000 of the 8,200 workers in the 50 stores operated by the Pennsylvania-based retailer, including the one in Providence Place mall, were furloughed when shutdowns began last March, forced to rely only on unemployment benefits, according to CEO and Chairman Jim Boscov.
With Boscov’s entire inventory in closed stores, even online orders were difficult to fill during the initial shutdown, Boscov said. Adding insult to injury was the fact that big-box stores such as Walmart Inc. and Target Corp. that sold many of the same products were allowed to remain open because they were dubbed “essential.”
“I wish we had sold milk, butter and eggs so we could have remained open,” Boscov said.
But since shutdowns lifted, the regional department store has seen a rebound, bringing back most of its laid-off workers with online and in-store sales picking up, though Boscov declined to share numbers.
That the company had no debt heading into the pandemic was an advantage, helping it to avoid the bankruptcy filings, closures and liquidations faced by a slew of major retailers this year. Some of those that filed for Chapter 11 bankruptcy, such as J.C. Penney Co., have since found investors or struck deals that could allow them to reemerge from bankruptcy.
CHANGED LANDSCAPE
J.C. Penney also announced that more than 200 of its stores would close – neither of the two Rhode Island stores were affected. There are no additional closures planned, a company spokeswoman said in an email. The retailer declined to comment further on how the pandemic has affected its business, including at the Warwick Mall anchor store.
Like its retail tenants forced to close during the three-month shutdown last spring, the Warwick Mall suffered a significant setback. But since the phased reopening that began in May, pent-up demand for home goods, jewelry and loungewear has revived many stores, with steady sales numbers that continued through the holiday season, said Domenic Schiavone, mall general manager.
It was still a far cry from the typical midnight Black Friday opening – the first time in 20 years Schiavone didn’t have to spend the night at the mall monitoring the usual mayhem. And the days of large crowds piled up outside of stores may never come back.
Still, Schiavone is confident that some elements of brick-and-mortar shopping – particularly for furniture and clothing that customers want to see, touch and try on before purchasing – will survive in the post-COVID-19 era. That the mall is locally owned and operated – even if most of its tenants are national companies – also gives customers the satisfaction of supporting their local community over a nationally managed mall, he said.
Brookfield Property Partners LP, a global real estate firm that owns and manages the Providence Place mall, declined to comment for this story.
Asked whether big-box and national chain stores were more likely to survive the pandemic versus their small-business counterparts, many business owners and industry insiders and observers see arguments on both sides. But ultimately, size may not matter as much as ingenuity to adapt to a changing retail landscape, Regine said.
“It’s not big or small, it’s who’s invested in technology, who’s personalized the customer experience, offered curbside pickup, all those things,” she said. “If you haven’t invested in marketing, built a communications strategy, it’s going to be really difficult to recoup those lost sales and customers.”
Despite the challenges posed by continued health and economic turmoil, Mischel is optimistic for the year ahead, bolstered by what she describes as an outpouring of support from the local community and a more-prominent e-commerce presence.
“In retail, in general, you always are hopeful, always optimistic,” she said. “If you’re not an optimist, it’s very hard to be in business for yourself.”
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
