‘We’re not Amazon’: COVID-19 is forcing small stores to try online retail

  • Ruff Haus Pets employees Crystal Nelson, left, and Michelle Fares talk about the store’s new online ordering system Sept. 15 in Chicago’s Lincoln Square neighborhood. (Photo/Erin Hooley/Chicago Tribune/TNS)

CHICAGO — Two years ago, Esther Fishman shut down her clothing and gifts shop’s online store.

Art Effect’s bricks-and-mortar business, operating in Chicago’s Lincoln Park area, was strong, and selling online seemed like more trouble than it was worth.

It seemed like the right call until this spring.

When the coronavirus pandemic forced all but essential retail stores to close, Art Effect rushed to get its online store back in business. Fishman has since hired a company to build a new, easier-to-use site.

Small neighborhood retailers used to compete with Amazon by catering to local shoppers who enjoy browsing in person. That’s still true, but in the six months since the pandemic began, a growing number are venturing onto Amazon’s turf.

Most say online sales are a long way from making up for sluggish in-store sales, and some struggled to shift businesses built for in-person shoppers online. Others say it’s a service they can no longer afford to avoid, especially if a surge in cases forces stores to shut down again.

“The old world doesn’t exist anymore. … We’re training people now how easy it is to shop online. There are people who are not comfortable with that, but there are a lot of people with busy lives finding out it’s a good alternative,” Fishman said. “I think it’s only going to grow.”

Online shopping has boomed during the pandemic: Estimated U.S. e-commerce sales in the second quarter rose 44.5 percent compared with the same period last year, while overall retail sales fell 3.6 percent, according to the U.S. Census Bureau.

Analysts say consumers are likely to shift some spending back to stores as concerns about shopping in person and capacity limits on stores ease.

“It’s a mistake to assume everyone getting online is happy about it,” said Brendan Witcher, e-commerce analyst at Forrester Research.

Still, the pandemic showed that even small shops can’t afford to ignore online retail, said Diana Smith, associate director at market research firm Mintel.

Big chains like Target and Best Buy reported triple-digit growth in online sales during the second quarter. Target reported especially fast growth in services that let shoppers get online orders the same day they’re placed, including a 700 percent increase in drive-up orders, where shoppers can have purchases delivered to their car, and a 350 percent increase in same-day home delivery orders with Shipt.

Other major retailers that let customers shop online but lacked curbside pickup rushed to roll it out, including Ulta, Gap and Paper Source. So have several malls, including Hawthorn Mall and Fox Valley Mall in the Chicago suburbs of Vernon Hills and Aurora. This fall, customers will be able to shop any mall store from the shopping centers’ websites, said mall owner Centennial.

Meanwhile, ShopRunner, a Chicago-based service that gives members free two-day delivery when shopping at stores in its network, has added more retailers this year than any year since 2015 and plans to introduce same-day delivery at certain retailers in Chicago this month, said CEO Sam Yagan.

Smaller retailers that traditionally relied on bricks-and-mortar sales, meanwhile, were left scrambling.

“They’re going to be struggling the most because they’re the most behind and have the most challenges to get up and running and catch up with everybody else,” Smith said.

At Milk Handmade, which sells locally made women’s apparel and accessories in Chicago’s Uptown neighborhood, owner Hallie Borden spent the early days of the pandemic “panic-adding” items to the online version of her store. Before the pandemic, only about 10 percent of its merchandise was listed.

The online store brought in business from out-of-town customers who would likely never have visited in person, and web sales now account for about half of Milk Handmade’s business, Borden said.

Still, “we’re not Amazon,” she said.

Borden packs up all online orders on days the shop is closed, something that worries her headed into the holiday season. Shoppers concerned about crowds or whether local shops will struggle to get last-minute orders delivered on time might decide it’s easier to stick with Amazon.

“It’s frustrating big-box stores can get products to customers really fast and I can’t. We’re just trying to prepare customers and set expectations for how long something might take to arrive,” she said.

Some local business groups have launched directories to promote businesses’ low-contact shopping options. In west suburban La Grange, the website La Grange Delivers lets specialty retailers outline ways to place orders for curbside pickup or delivery and has lists of restaurants offering outdoor seating, pickup or delivery.

“A lot had an online presence, but it wasn’t a priority for them,” said Nancy Cummings, executive director of the La Grange Business Association. “That’s completely shifted.”

Still, some stores are easier to recreate online than others.

Bras Galore, a shop selling bras, intimate apparel and swimwear, has always emphasized the importance of getting an expert fit, said owner Kathy Bonifas. Even selling to existing customers who had previously been fitted would have been hard, because many gained or lost weight during the pandemic and were no longer sure what size they needed.

“That’s always been our adage: Don’t buy online or you’ll buy the wrong size,” she said.

Being limited to bricks-and-mortar sales makes the city’s 25 percent capacity limit especially challenging, she said. “How are you supposed to be at 25 percent of your sales and 100 percent of your rent, and no one is helping you out financially?”

AlleyCat Comics, in the Andersonville neighborhood, built an online store but most customers avoiding shopping in person still seem to prefer calling the store and having an employee serve as a personal shopper, said Selene Idell, who owns the shop with her husband, Nicholas.

People rarely come in search of a specific title, which makes buying online tougher, she said.

“They want to browse and look at the pictures and see if they like the art. Comic book shoppers are particular about the book’s condition. It’s a very hands-on kind of business,” she said.

AlleyCat plans to hold online-only sales during the holidays to encourage shoppers to check out the online store.

“I think it’s beneficial for us for running the business, but it’s not making any money right now,” she said.

Selling online is also extra work, especially for stores with inventory that changes frequently.

“It’s a tricky balance. It takes time to take photos, edit them, write the copy, and put it online,” said Merl Kinzie, who owns The Shudio, a shop selling plants, vintage apparel and gifts in the Pilsen neighborhood.

A big chain that will sell dozens, if not hundreds, of a particular shirt only needs to put that effort in once. Vintage or resale clothing is usually one of a kind.

The Shudio had an online store before the pandemic but it wasn’t a priority because customers drawn to its focus on sustainability seemed to prefer shopping in person.

Lincoln Park-area kids’ resale shop The Second Child is more optimistic about online sales even though it has the same challenges with one-of-a-kind merchandise.

Before the pandemic, The Second Child only sold its highest-end pieces — about 3 percent of the roughly 5,000 items in its bricks-and-mortar store — online. Now, owner Amy Helgren estimates shoppers can find 90 percent online.

Even before the pandemic, Helgren worried about competition from Amazon, a one-stop shop that lets busy parents buy whenever they have time, even if that’s the middle of the night, when her bricks-and-mortar store is closed.

“The first thing I do now when I wake up is check my phone for online orders,” Helgren said. “It has to be at their convenience. They want what they need, and they want it now,” she said.

Richard Forsythe, who owns Lincoln Square pet supply shop Ruff Haus Pets, said online sales have been growing since it launched an online store about a month into the pandemic, though the bricks-and-mortar store still generates most of the business.

He just hopes the online growth doesn’t come at the expense of sales at the store, which moved to a larger location last fall. When people come to the shop, they might pick up an extra treat or toy for their pet.

“When you’re online, it’s ‘What do I need?’” he said.

Jewelry and accessories boutique Embellish saw online sales slow once the shop reopened to customers, said owner Carrie Bowers.

She still thinks the days of getting up at 6 a.m. and working until 1 a.m. to get the online store in business were worth it.

“We’ve had a lot of new customers, and I think that’s being able to see what we’re about before you walk in,” she said. “And who knows if we’ll have to close down again? It’s something we have to have.”

Updated: 
09/30/2020 - 9:28am