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Internet sales, social media interactions become more important for small business profit

Facebook announces new Shops feature to help
Posted at 1:27 PM, May 28, 2020
and last updated 2020-05-28 13:27:52-04

With a lot of states forcing businesses to close their doors over the past couple months, small businesses felt the pain of little to no foot traffic.

Now, building customer relationships is more important than ever, and many businesses turned to the internet to help fill the gap in sales.

“Everything happened, as we all know, in a matter of three days the world changed dramatically,” said Dawn Johnson, owner of Mainstream Boutique Aurora and Mainstream Boutique Castle Pines in Colorado.

She’s been in business for seven years.

“The passion of a small business owner goes so much deeper than people know. It’s like a child,” she said.

Back in March, she was forced to close her doors. Her only solution was to move online.

“I would come in on the weekend. My husband would hold the camera, my daughter who is 16 she would model the clothes,” Johnson explained. “We tried things we never tried before.”

This included a virtual fashion show and a virtual selling event with one of their vendors.

With limited resources, Jonson and her staff managed to post their items for sale on platforms like Instagram and Facebook in a matter of days.

“Anything helps. Every time we get one sale on that I do a happy dance,” she said.

And the reach of the internet brought in a following from all over.

“One of the things we noticed is we had a captive audience for the first time ever,” she said.

“We are social beings and I think our limitations on our social interactions have 100 percent changed the way we do so many things,” said Melissa Akaka, an Associate Professor of Marketing at the University of Denver.

She does consumer insight research.

“Small businesses have especially had to become innovative about how they can maintain a relationship with their customers when they need to follow all of the social distancing protocols that are in place,” she explained.

Akaka said the pandemic has changed the way we buy things – and customer relationships, especially through social media, are more important than ever.

“Those who have really strong brands and really strong community ties with their customers or their followers, I think have a better chance of being able to succeed on this type of platform because they already have their customers built in,” she explained.

However, even companies with those strong ties are having a hard time.

“We have a following, but we’re still a small family business,” said Steve Weil, President of Rockmount Ranch Wear.

The company has been around 75 years, serving customers and other businesses with their clothing and other apparel. Rockmount went online back in 2001.

“That has been our lifeblood quite frankly, because it enabled us to reach the world in a…disrupted retail landscape,” Weil explained. “Since COVID, it was part of our business that continued to operate whereas retail did not.”

Long standing businesses like this, have seen hard times before.

“Everything from tornadoes wiping our factories, to the Great Recession, and now this,” he said. “The secret of survival is never forgetting that disasters happen, and we’ve been through them every 10 years for 75 years.”

Even with the help of the internet and social media, both Johnson and Weil saw a drop in sales in recent months.

“It was less, it wasn't the same. But what it was able to do is keep us going because we literally would have had no income at all,” Johnson said.

“Our sales plummeted to less than half of normal,” Weil said.

Big social media sites like Facebook and Instagram are trying to make a difference by offering a platform for small businesses to market and sell. Facebook recently announced Facebook Shops, which will allow businesses to sell their items directly on their platform, without taking them to another site. Johnson said she plans on taking advantage of that as well.

“The Facebook and the Instagrams of the world, it means a lot for companies to recognize how hard it is for small businesses. We’ll try anything to see if it works,” Johnson said.

Akaka said when it comes to small businesses, there’s a lot of room for innovation, as customer relationships and online presence becomes more important.

“Those who can figure out how to adapt and really think through solutions to not just their business problems but to their customers' problems,” she explained. “Those who can step up and be solutions for that are going to weather the storm much better.”