In the wake of the pandemic and economic fallout, independent retailers are facing serious challenges. In a new series, FN will spotlight storeowners who are taking smart steps to weather the storm.
Like most independent retailers, Illinois-based Naperville Running Co. has had to get creative to keep business going with its stores temporarily closed.
Aside from an increased focus on online sales, which has always been secondary to brick-and-mortar, store owner Kris Hartner has launched local delivery to homes within 13.1 miles of the four stores (the distance of a half-marathon) and virtual fitting at a time when the coronavirus has forced people indoors.
“In the first 24 hours, we had 54 scheduled appointments and they’ve continued. Every day, we’re taking more and more on,” Hartner said. “And every single one of those people has made a purchase, which is pretty wild.”
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Despite consumers still shopping, Hartner admitted business took a roughly 90% hit the first few weeks doors were closed and is actively seeking assistance from the government to prevent even more damage.
Here, Hartner shares the lessons he’s learned thus far that he will keep in mind well beyond the coronavirus crisis.
On keeping his business going:
Kris Hartner: “We’re doing virtual fittings, curbside pickup and no-contact home delivery. And we are doing online sales. So we have four new modes of business. A month ago, 90% of our business was in-store, and we’re doing no in-store business right now. The other 10% was pretty much Amazon third-party stuff, and we’re still doing that. The big problem is our sales were down 90% those first few weeks, but a lot of people had the impression that because we’ve added online and virtual and home delivery and curbside that we were doing great. You just kind of assume that people would know you’re not. People would ask me, ‘Kris, how’s it going?’ And I’d say we kept our staff, and people think that’s amazing because most retail have had to cut staff, But then I would [talk about our sales decline] and they were shocked; they had no idea. So on our Instagram, you’ll see a letter I sent out to our entire customer email database. That was the hardest thing I’ve ever sent. I just wanted to tell people you’ve got to shop at your locally owned businesses because they are struggling. I said, ‘Hey, we kept our employees, but we’re losing thousands of dollars every day. So every dollar helps, and if you can shop now please do.’ That hit home for people. I’d never thought I’d be sharing that information with the public, but I thought it was good for them to hear. Go shop the local bookstore, the local pharmacy because they’re not getting traffic like they used to.”
On how retail will be different:
KH: “It will be so different unless they come up with a cure and a vaccination immediately — and even then, it will still be different. I’m kind of making an analogy to our store as being like a restaurant where [you will] have reservations and the greeter. Somebody walks up for an appointment. Oh, you don’t have a reservation? OK, our next open meeting is in 90 minutes. If you want, you could head over to the bar, there’s limited open seating. It would be kind of an open area of the store where a limited number of people could go in and get nutrition or some accessories or socks, to get shoes they know they want, that they don’t need to be fitted for. And once you’re ready, you get in line in six-foot increments marked on the floor and we’ll ring you up. Appointments will be in large area stations that keep people free from other people. Coronavirus lives in shoes for five days, so I don’t know if we’ll be spraying inside the shoes with disinfectant. I don’t know exactly how we’re going to go about doing that. We can’t just quarantine every pair of shoes that gets tried on. At this point, if we get returns, we’ll quarantine them for five days. That’s kind of the plan.”
On employee safety:
KH: “[To keep operations going], our two smaller stores have one person in them at all times, and then our main store may have three people there, but it’s 5,500 square feet, so there’s plenty of space. They’re following all social distancing rules, cleanliness, sanitizing. Our delivery drivers use gloves and masks. They call ahead, pull up into the driveway, walk up to the steps and put the shoes there. Usually the people wave or yell something out like ‘thank you.’ I did the first delivery: It was a couple who was a little bit older standing behind their glass door, and they both wave and the husband yells, ‘You have us for life.’ These people they really, truly appreciate it. The radius we’re using for delivery is 13.1 miles [the length of a half-marathon] — it’s kind of clever, one of our employees came up with it.
On what he’s learned about his business:
KH: “You should always have three months of operating capital on hand if you can. I believe Mark Cuban even says six months. I heard him say that the other day and I was like, dang, all right. I’ve learned that there is a reason for it, rainy day money or whatever. People just really couldn’t conceptualize what a pandemic would be. Very few small businesses have less than 20 days of operating capital to operate at their full levels. I will try to grow that to six months, which is a lot of money just sitting there. We know how to be efficient.”
On cutting costs:
KH: “As you grow and your business is doing better, you add things that are luxuries like groceries in the kitchen at all our stores for employees, things like that. They’re great but when the time comes to watch everything, you can pretty easily cut back because you didn’t used to do that. We know how to operate a smaller machine. We’re not cheap, but we’re very diligent in how we spend our money so there’s not a ton of fat to cut, but there are things that you learn to trim back on. And I’ve shared stuff with employees that I’ve never shared. They all know how much I make now because I said here’s where we’re cutting money. My pay and my wife’s pay is cut to zero, like a lot of places. I shared that with them, and some employees volunteered to cut; they said they didn’t really need hours, so they’re helping us save in our daily costs. We basically got things down to about half of what it normally would cost to operate.”
On seeking government assistance:
KH: “We applied for the Payroll Protection Program loan, and for a maximum loan and [we’re] waiting to hear back on that. Our application was accepted by our bank and processed but I haven’t seen the check come in. If everything goes the way it sounds like it should, we should get a decent amount of that [loan] forgiven. That will help with some of our losses. It certainly won’t help with all of them, but it will help with a decent chunk. … It will be substantial.”
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