It used to be that locally owned retailers could improve sales by also selling online. Now it seems that some local retailers are finding the vast majority of their sales happen online, leading some to shutter their physical stores.
Amanda Carroll of Concord, North Carolina decided last summer to close her 10-plus-year-old beads store in a suburban shopping center and focus solely on her online jewelry design operation, Sage Jewelry Arts. Since closing the physical store, Carroll says she is now more profitable and can run her business from the comforts of home. She has more time to focus on developing new products, marketing her business and attending jewelry shows because she’s not so consumed with running a 9-to-5 storefront, paying the lease and utility bills and managing a workforce.
“When you’re renting in a common space like we were, your insurance, your taxes and common area maintenance costs are a substantial part of your overhead,” Carroll told the Charlotte Observer. “I also had four part-time employees when we closed. It’s a lot. You don’t realize.”
Even many local retailers that keep their physical stores open are finding their online operations can be far more lucrative.
Ernie DelMonico, owner of DelMonico Hatter in New Haven, Connecticut, still maintains his family’s century-old hat store near Yale University. However, the store now gets more than 80 percent of its sales online—with many orders coming from foreign countries, including Britain or South Korea. He spends much of his day fulfilling online hat orders and packaging boxes.
Though DelMonico has no plans to go online only, he's very vocal about how important an online presence can be for small retailers. “If they’re not on the web, they’re really missing the market,” he told the New Haven Independent. “You have to be online.”
Another local New Haven business, Willoughby’s Coffee & Tea, now does about 50 percent of its sales online and recently started another online business, Roastmasters, which sells products to people who want to roast their own coffee at home. The company doesn’t plan to close its local coffee roasting shops—much of their business is selling hot cups of coffee—but it sees its growth online. “I personally feel much more of a sense of security online,” owner Barry Levine told the Independent.
Of course, while online sales are a goldmine for some retailers, others that started exclusively online, including eyeglasses seller Warby Parker and men’s clothing retailer Bonobos, have found value in building out physical stores. Birchbox, the popular online service that sells subscriptions to month boxes of sample beauty products, is opening a 4,500-square-foot brick-and-mortar shop in New York City’s SoHo neighborhood later this month. The retailer hopes the new store will give prospective new customers a chance to see and test the products up close, which will, in turn create a more fulfilling shopping experience and generate more customer loyalty. (A recent PriceWaterhouseCoopers study found that consumers want a “total retail” experience, which includes the ability to shop in a physical store and buy online.)
"We are focused on hypergrowth," Birchbox co-founder Katie Beauchamp told the New York Times recently. "We like the idea of building a store along with the business."
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