As the pandemic drags on, retailers like Amazon, Walmart and Target are raking in digital sales, while thousands of small businesses struggle to keep the lights on. With Main Street falling far behind, one company has come up with a solution to help local stores compete with the online giants.
“Nearby" is an online storefront that handles marketing, orders, fulfillment, and shipping for local businesses. The company's founder, April Underwood, used her experience leading product design at tech giants like Slack and Twitter — and hopes Nearby will help beloved neighborhood businesses keep up.
More than 160,000 businesses have closed since the pandemic began, according to the latest available data from online review site Yelp.
“There is no website or app you can go to and buy things from the shops in your own local hometown, and get them delivered to your doorstep just like you might from Amazon, or some big e-commerce player. And that's what we're building,” Underwood told NBC News.
She piloted the program with a website called “Keep Oakland Alive," which features 40 small businesses. Now, she is expanding nationally — the cities of Austin and Charleston are next.
The company retains a 5 percent fee in Oakland to cover credit card fees, sales tax, and delivery costs.
Underwood said that Nearby offers what a small business otherwise couldn't afford: people to make the deliveries, content writers to craft an online presence, and digital marketers who can find paying customers online. And because the pandemic has forced so many small businesses to rapidly move to e-commerce, those businesses suddenly have the digitized inventory systems in place that make it possible to pull stores together into an online marketplace, something that was missing in online "buy local" efforts of the past.
“Those big e-commerce players — Amazon, Target, Walmart — they have created expectations where people believe that they should have access to unlimited selection at the lowest prices, and it should all arrive within a very limited amount of time," Underwood said. "We’ve been led to believe that that is what we should expect, and that that’s actually sustainable, and that every other retailer, small or large, should rise to that level,” she said.
Erica Perez, co-owner of Oaktown Spice Shop, said she feared her store would have to completely shut down at the start of the pandemic. However, a collaboration with Nearby, and a fee of just 5 percent — which is only collected when the retailer makes a sale — made it possible for them to grow their e-commerce business.
There has been a resurgence in consumers wanting to shop local — which suggests that smaller stores could do better once the virus is under control and things start to normalize.
“When we started the shop, we set our prices thinking we were going to be selling things: people coming in the door,” recalled Perez. “I think that the world has changed forever, and we are going to be selling things online at a greater degree than we ever have before. And we’re learning how to do that. We certainly aren’t set up here to be a fulfillment center out of a retail shop.”
Iguehi James, CEO and designer of Oakland-based clothing brand Love Iguehi, says the new platform has enabled small-business owners to show what sets them apart from a big box store.
“I’m hand-making everything here or getting [apparel] produced here in Oakland. And so it’s slower fashion. But what I like to say is that a lot of quality, a lot of care is put into every piece that we make,” James said.
While she misses meeting and styling her customers in person, James said “Keep Oakland Alive” has made it possible to fill customer orders relatively quickly. “If someone wants a mask and they want it tomorrow, that service is there so that they can still get the quality goods, they can still support small businesses, but they can also get it pretty quickly,” she said.
Nationwide, many consumers are still visiting just one or two stores and doing most of their shopping there to reduce potential exposure to the coronavirus, Neil Saunders, managing director of GlobalData’s retail division, told NBC News in an email. “However, it is not all bad news, as there has been a resurgence in consumers wanting to shop local — which suggests that smaller stores could do better once the virus is under control and things start to normalize,” Saunders said.
Underwood is betting on that “shop local” trend.
“I think of local shopping as, frankly, the smallest but most pragmatic way that you can be an active participant in your community,” she said.
“But, that fuel is going to run out if it’s not easier for consumers to do, which is where Nearby is taking up the mantle to actually address that.”