November 26, 2020

Fearing another lockdown, New York City small businesses race to get online ahead of 2020 holiday shopping season

Shopkeepers are taking notice as rising Covid-19 rates in parts of Brooklyn will force non-essential businesses to close starting Thursday. 

 

“We have to be prepared in case we are shut down again,” Parker said.

 

All signs are pointing to this holiday season being the most online-driven in history. U.S. e-commerce sales surged 37% to $200 billion in the second quarter, according to the Commerce Department, capturing a record 15% of all retail sales. Enterprise software giant Salesforce is projecting that as much as 30% of holiday shopping will be done online this year. 

 

The stakes are high for small businesses to capture some of that spending. As many as a third of the 230,000 small businesses that populate neighborhood commercial corridors may never reopen, the Partnership for NYC warned in a July report.

 

Thousands of small businesses already moved online at the start of the pandemic—tripling the stock-market value of e-commerce platform Shopify since March.

 

Philip Chaitman launched a website for his Park Slope shoe outfitter, Good Footing, in late February using Shopify, but said business tailed off after a couple of months of online sales growth at the start of the pandemic. He is hoping for a boost from additional advertising ahead of the holiday season. The majority of sales for him are driven by locals at his brick-and-mortar store, where he is not competing with wholesalers and e-commerce giants.“We have heard from people who are searching the website to see what the business is all about before coming in to try the shoes on,” Chaitman said. ‘That has helped.”

 

But now a host of new private and public efforts are working to get holdouts online, or to expand the presence of stores already launched.

 

Gov. Andrew Cuomo’s office last week launched “Empire State Digital,” a partnership with Shopify and fellow e-commerce companies Square and Etsy, which includes free trials with the companies and online training from the state. 

 

A separate program run by Google will help 150 city small businesses set up Shopify stores and optimize how their business appears in online search results. Google will pay graduates of the nonprofit jobs training program COOP $20 per hour to work with three businesses each. Applications for the program opened at the end of September.

 

Shopify charges a monthly rate starting at $29 per month, along with a transaction fee of 2.9%, plus 30 cents. Competitor Square charges a similar transaction fee but has monthly options that range from free (for a website with Square branding) to $12 per month for a custom site. 

 

Digital storefronts don’t magically solve the challenges facing small retailers. Small businesses online are competing directly with Amazon and its millions of items that can be shipped, free, typically in two days. 

 

Cinch Market, which launched earlier this summer with the tag line “Shop Brooklyn, Not Bezos” is trying to level the playing field. Its website can facilitate same-day delivery within the borough for more than 30,000 items from 50 Brooklyn stores.

 

There are no fees for businesses to join. Cinch collects up to 9% of completed sales to cover its operating costs, compared to fees of up to 15% at Amazon. Delivery staff pick up the items from stores and bring them to customers, and are paid $20 to $25 an hour, plus tips, to do so. 

 

Maya Komerov, a Brooklyn resident who founded the company, said Cinch is working to process a waiting list of another 50 stores and expects to expand to Manhattan later this month. She said the risk of a second wave of Covid-19 cases is adding urgency to the company’s growth. 

 

“Businesses are very concerned that there is going to be a shutdown,” Komerov said. “We are working quickly.” 

Source Article