Sunday, 9 May 2021

When You’re a Small Business, E-Commerce Is Tougher Than It Looks

Consumers’ pandemic reliance on online ordering benefited the giants. For many independent retailers, it helped keep the doors open.

By Amy Haimerl

A chair sits in the middle of Holiday Market, a specialty grocer near Detroit, and if customers are lucky, they’ll find Tom Violante Sr. sitting in it. The 91-year-old founder still comes to work most days — and he knows where everything is in its 60,000 square feet.

“He asks everyone if they found what they wanted,” said his son, Tom Violante Jr., who operates the store with his sister and brother-in-law. “If they haven’t, he’ll tell them which aisle it is in, how many steps it takes to get there, and where it’s located, knee, head or belly high.”

That’s the type of customer service the store, in Royal Oak, Mich., is known for. So, when Tom Violante Jr. began considering offering online grocery shopping, he wanted to provide that same level of care. He didn’t expect the service to be a huge revenue generator, but he saw the future coming, as online brands such as Chewy and Winc wooed his customers away. In 2019, he assembled a team to build an online platform that could handle the store’s 60,000 items.

He was glad he had when the pandemic hit.

“When we first started, we were so busy people couldn’t get a pickup slot for a week, but we wanted to get it to within two days,” he said. “Now we’re at same-day pickup.”

On a ledger of pandemic winners and losers, Holiday Market is in the positive column thanks to online shopping, which helped push the store’s overall revenue up 20 percent in 2020 compared with 2019. In fact, e-commerce is what prevented a catastrophic year for U.S. retailing. Instead of ending in a deep trough of red, online shopping pushed overall retail sales up nearly 3.5 percent, to $5.6 trillion, compared with the previous year, according to the research firm eMarketer. E-commerce alone grew by 33.6 percent in 2020.

But Holiday Market’s success is an outlier for small merchants — the boom mostly helped big business. Ten large retailers accounted for 68 percent of all U.S. e-commerce sales last year — and Amazon alone represented more than half of all online sales. Big e-commerce businesses also absorbed nearly 60 percent of all warehouse space available last year, according to real estate analysts at CoStar Group.

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