By Nika McKechnie, IEDC Intern
On June 22, IEDC hosted a webinar entitled “Saving Retail on Mainstreet and Beyond” where experts discussed the impact of COVID-19 on Main Street retail. Chris Briggs, Senior Vice President at Buxton Co., moderated the session of three speakers: Matt Wagner, Ph.D., Vice President of Revitalization Programs at the National Main Street Center; Bobby Boone, Founder and Chief Strategist at &Access; and Christopher Zimmerman, Vice President for Economic Development at Smart Growth America.
Dr. Wagner presented research conducted by National Main Street Center.The Impact of COVID-19 on Small Businesses presents the results of a survey to over 5,851 small business owners The main impact of COVID-19 on these small businesses was a loss of revenue, with 57 percent of respondents reporting a drop in revenue of more than three-quarters. Beyond revenue loss, almost 80 percent of surveyed businesses have closed temporarily, and nearly two-thirds are at risk of permanent closure if current business conditions persist for the next five months.
An important takeaway from the Main Street America research was that 63 percent of small businesses surveyed did not have an online sales component. One resource to help small businesses improve their online presence is your local Small Business Development Center (SBDC.) The CARES Act has allocated $265 million to assist SBDCs in providing programming and educational training to small business and entrepreneurs.
Bobby Boone shared insights from his organization’s ebook, “Back to Brick & Mortar Guidebook for Re-Entering Storefronts” complete with worksheets and resources to help businesses navigate reopening. He also drew on his experience working in retail corridors to suggest how economic developers can support these businesses.
- Preserve and expand businesses: Businesses should re-examine their revenue sources, and take advantage of new opportunities such as curbside pickup, delivery, and outdoor dining. EDOs may also provide technical and financial assistance to establish and expand microenterprises such as food delivery, medical, cleaning, and other services.
- Arrange local supply chains and cooperation: Retailers may benefit from using local suppliers whenever possible to reduce lags in delivery, and joint purchasing can help small retailers take advantage of economies of scale.
- Encourage omni-channel sales: Economic developers can help businesses grow their e-commerce capabilities and expand their delivery options. Additionally, EDOs should help businesses obtain permits to reserve curb space for pickup or sidewalk space for outdoor seating.
- Gather and provide peer data: EDOs should build relationships with local businesses to gather anonymized data to increase their understanding of business needs and effective business models. They can also use resources like Google Mobility reports for county-wide geographic data on how people are moving.
Chris Zimmerman of Smart Growth America began his presentation stating that a change was happening in Main Street retail prior to COVID-19, citing the rise and fall of shopping malls, the growth of big box retailers like Walmart, and the increasing popularity of e-commerce sites like Amazon. In recent years, Main Streets have enjoyed a resurgence as economic developers have turned to placemaking, increasing the authenticity and inviting environment of retail corridors featuring local small businesses. Those efforts are at risk now and the pandemic creates a risk of consolidation towards large businesses and national chain retailers.
Zimmerman highlighted two considerations for economic developers:
- Effectiveness of opportunity zones: Opportunity zones seem to have done well during the pandemic, but there are questions about the efficacy and equity of the program. Zimmerman cited a report by the Urban Institute that indicated most of the money produced by Opportunity Zones has gone to real estate and not businesses.
- Equity concerns: The most vulnerable small businesses are minority-owned, and if we see a consolidation to large businesses, there will be inequitable distribution of the effects across society.
In response to a question about higher retail sales in May, Dr. Wagner cited a sense of eagerness from people coming out of their homes and wanting to be active, especially at restaurants and bars. However, he warned that this may not indicate a continued increase in sales, as not all states have closed or reopened uniformly and there is a lack of clarity around a second wave.
Another question was how EDOs can facilitate the safe reopening of restaurants as outdoor dining has emerged as a popular solution. Boone emphasized the importance of place-management organizations, such as Business Improvement Districts, in reimagining the effective use of public space and helping businesses navigate permit processes. Zimmerman underscored this, and urged economic developers to take on these leadership roles when place-management organizations are not present. Boone also highlighted access to outdoor dining equipment and updated staff training as essential.
In concluding the session, all three experts stressed that flexibility and adaptability will be the key to ensuring the success of small businesses and the recovery of Main Streets.