Entrepreneur Insight
From Offline to Online: Leveraging Digital Commerce During COVID-19
By Angela Bao
How small businesses can adopt online services to mitigate the effects of a global pandemic
The COVID-19 pandemic has upended businesses across the board. Since many cities and counties across the United States have implemented “stay-at-home” mandates, many businesses have been forced to close their physical locations and/or drastically limit their services.
With customers unable to venture out and visit brick-and-mortar shops, having a digital presence is more important than ever. It can help provide some much-needed revenue to keep operations going and staff employed during these uncertain times. Here are examples of how some small businesses have quickly shifted from offline to online and tips they have for other entrepreneurs trying to ride out the storm.
Provide services via video streaming
When Los Angeles Mayor Eric Garcetti first issued his mandate that all restaurants switch to a takeout and delivery-only model, Lynn Yu, co-founder of Trivia LA, knew that her business was going to be upended. Her company, which hosts trivia games at various bars and breweries around L.A., relied on people being able to physically occupy a space to participate in trivia nights.
“Businesses are basically moving online as much as possible,” Yu states. “So that's what we're doing—we are starting to livestream our trivia games.”
She uses a software called Open Broadcaster Software to produce the livestreamed trivia games, which they host twice a week via Facebook Live. “It took me hours to learn how to use the software. It just takes way more labor to do a livestream; I'm ironically busier now during COVID than I was pre-COVID because it's so much work to put together,” she shares. However, Yu adds that she feels the need to put in the extra effort to make their games look nicer because there are a number of other people and businesses hosting online trivia games.
While winners don’t receive any prizes, the virtual turnout has been greater than she expected, reveals Yu. She adds that one of their livestreams had 160 viewers tune in from all over the country. Although they can’t get paid for hosting livestreamed trivia games like they did when hosting at bars, Yu says they ask viewers to tip out at the end as a way of earning some revenue.
“You know, me and my business partner were expecting only like 10 percent of people to contribute, maybe even less, but we had a 30 percent tip rate,” Yu says. “I was really touched and moved by it.”
For businesses like boutique gyms and yoga studios, shifting to online can be a little trickier. At the start of the coronavirus quarantine, many fitness instructors were livestreaming workouts or routines for free on places like Instagram Live, with the idea that the quarantine would be short-term. But with local and state governments putting increasingly strict measures on public gatherings, offering free streams is no longer a viable option for business owners who still need to pay rent.
Many businesses do not have the resources to provide the same amount of services and products as they would during normal times, so it’s beneficial to retool your business to fit not only your current needs, but also the needs of the community.
Zach Golden, founder and CEO of Sanctuary Fitness, knew they had to come up with an alternative—and fast. As a small business, he couldn’t afford to go without revenue for potentially months, and he also didn’t want to lay off any of his employees. He needed a solution that would keep the lights on and satisfy paying members.
Golden and his team decided that the best thing to do was provide online workout videos, but at a higher production quality so that it could be a “value-add” to gym members. They knew that the coronavirus quarantine was likely to go on longer than expected, so they wanted their customers to feel that Sanctuary Fitness was still providing them a useful service.
“What we decided was, let’s actually plan this out,” Golden shares. “Let's try to put some production quality to it so it can be a little bit higher quality of a product that we're offering to people, and let's get two weeks’ worth of workouts done because this might go on for a little longer than just a week or two—then [our customers] at least have a program that they can repeat every two weeks and follow along.”
Filming the videos was fairly straightforward and low-cost, using just an iPhone, mic and tripod to film and posting the videos on YouTube. However, because they want their members to feel like they are getting exclusive content, they made the videos private on YouTube so that only people with active memberships can access it.
Sanctuary Fitness uses a software-as-a-service called Mindbody that allows people to book workout classes online. “We found a bridge between that Mindbody software, where someone can log into their profile and then they can actually click a link that is protected,” Golden shares. “That [gives] them access to those videos because they have permission, whereas the rest of the world doesn't.”
Deliver with third-party couriers
For independently owned restaurants, using courier services like Postmates or Grubhub can be a life-saver, says Hailey Kwon, owner of Dots Cupcakes and Dots Café in Pasadena, California. Kwon has already been on Postmates for a number of years and believes courier services like it are particularly useful for independent businesses at this time.
“Postmates is great for a few reasons. A lot of businesses are not going to even have the staffing and resources in order to do delivery, because you don’t know if it’s going to be two orders in a day or 50 orders,” says Kwon.
Many businesses besides restaurants have had to lay off staff due to costs or limit hours due to social distancing measures, which means that, even if they did have the ability to do delivery before, their resources are now even more restricted. Luckily, some couriers like Postmates aren’t just limited to the food service industry; they will also deliver groceries, convenience items, clothing and books, among others.
"Etsy and eBay are easy entry points at a time where you have to pivot quickly to generate revenue online."
Although courier services usually take a commission from their merchants, many of them have implemented programs to assist the businesses most affected by the COVID-19 pandemic. Postmates initiated a Small Business Relief Pilot program that would temporarily waive commission fees for small businesses in the San Francisco Bay Area. Grubhub is also temporarily waiving up to $100 million in commission fees for impacted independent restaurants, and DoorDash is suspending commission fees for 30 days for new and existing restaurants on its platform.
Utilize marketplace platforms
Another way for small businesses, particularly retailers, to sell online is to utilize existing marketplace platforms rather than build out their own website. Because of how suddenly the novel coronavirus outbreak escalated and small businesses had to close, it’s important for businesses to generate revenue as quickly as possible, rather than spend months trying to launch their own website.
Online marketplace platforms like Etsy and eBay are the easiest options, since business owners don’t need to design an entire website. All you need are photos and descriptions of your products, and you can quickly and easily get your online shop up and running.
“These are all easy entry points at a time where you have to pivot quickly to generate revenue online,” explains Yesim Erez, a business consultant at the Orange County Small Business Development Center.
As a platform, Etsy is focused on vintage or handmade goods and crafts, but that could range from clothing, to furniture. Although eBay has a reputation as being a place for “garage sale items,” they do offer store accounts, which are essentially official storefronts that give small businesses access to a number of different marketing and merchandising tools.
Whether you choose Etsy or eBay, it’s a good idea to take quality and detailed photos of your products that really demonstrate its functionality—but that doesn’t mean you need to hire professional photographers. These days, smartphone cameras offer high enough resolution that any business owner can take great images of their products on their own.
“You want to make sure your store feels amazing,” says Manal Richa, business consultant and e-commerce expert with the Orange County Small Business Development Center. “Remember, by buying online, customers are not in front of the product—they can’t touch it, they can’t feel it, they can’t smell it. But if you share amazing photos, if you describe elaborately what that product is about…” you can stand out.
You’re also going to want to make sure that you utilize keywords in your store and product descriptions, which could mean adjusting your business name slightly to differentiate yourself from other sellers. “Etsy is a search engine in itself,” adds Richa. “You want to make sure that your store and products stand out and are found through the online platform.”
Adjust your offerings based on what people want or need
Many businesses do not have the resources to provide the same amount of services and products as they would during normal times, so it’s beneficial to retool your business to fit not only your current needs, but also the needs of the community. Likewise, businesses that are shifting from a physical storefront to an online model might need to adjust their products and services to fit the relevant communities, in order to maximize sales.
At Dots Café, Kwon switched from selling individual items to offering affordable “family meals” in light of the statewide safer-at-home mandate. The meals consist of the necessary proteins and carbs for a balanced meal, but also include kid-friendly dishes like mac and cheese bites.
“We started doing family meals knowing that families were going to be home with their kids, since school was also cancelled,” Kwon explains. “So, we were able to kind of adjust our model that we currently have.”
Keep costs of shipping as low as possible by prioritizing lighter weight items and smaller packaging.
If you’re selling items through a marketplace platform, particularly on eBay, Erez says that it’s a good idea to see which items are selling most popularly. “Items do trend—some things sell better than others, but you can easily find out what items to prioritize for sale,” she reveals. “eBay will actually provide you a link where you can take a look at the trending items. Go on there, and see which items in your assortment for your current business make the most sense for eBay, and I would prioritize those first.”
Tips for packaging and shipping products
If you’re trying to pivot from brick-and-mortar to e-commerce, you generally want to keep the costs of shipping and packaging as low as possible.
“Keep your items light, to the extent that you can—packaging, as well,” advises Erez. The heavier a package, the more expensive it is to ship out. She adds that you also don’t need to ship goods in boxes, which are not only heavier but also cost more. Instead, you should consider using inexpensive poly mailers, which are good for many things including some types of clothing.
When you’re first starting out, order volume might be low enough that you can just pack and ship items from your own home. However, Erez says that third-party shippers are a good option if sales ramp up.
“They will have integrated shipping options. They’ll have negotiated shipping fees with the shippers out there—and those fees will be lower than what you can negotiate as a single business,” Erez shares. “So, they may offer those advantages and pass them along to you.” She adds that third-party shippers will also have shorter shipping times, better drop-off schedules and may also store your business’s inventory, although you would have to pay fees for that.
Businesses also need to consider shipping pricing strategies, which will depend on your goal as a business. There are three main strategies: businesses can offer free shipping after customers spend a certain amount, flat-rate shipping or simply just pass the entire cost of shipping onto the consumer. However, if you’re trying to entice new customers, Erez advises that offering free shipping works the best.
“If you’re your trying to increase the number or amount of purchases in the cart, think about offering free shipping when you get to a certain dollar ring,” suggests Erez. “For instance, free shipping at purchases $50 or above.”
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