Digital commerce is changing America’s main streets… could it be for the better?

The past two-and-a-half years have represented one of the most challenging times for Main Street businesses across the US. The global pandemic transformed the way we work and shop. While many businesses were able to weather the storm of the global pandemic shutdowns, running a small business along our Main Streets is now more complex – with managers grappling with new workforce issues, rising inflation, and greater competition from major online retailers.

Despites these pressures, I want to make the case that small businesses can use these changes to their advantage by adapting new technologies and harnessing the power of place.

One of the big kick-offs to the holiday shopping season is American Express’ Small Business Saturday®, a day that celebrates shopping at locally owned and independent small business businesses. Small business Saturday has raised awareness of supporting local and small independent businesses more than any other initiative. With 2021 sales reaching $23.3 billion, according to the 2021 Small Business Saturday Consumer Insights Survey commissioned by American Express, Small Business Saturday is now on par with Black Friday (more than $30 billion) and Cyber Monday ($10.7 billion). At Main Street America, we have proudly served as a key partner in supporting this event as a way to drive consumer engagement in one of the few ways that truly creates community engagement and experience as part of the holiday shopping season.

The shifting consumer landscape

Prior to the pandemic, e-commerce shopping was at 10.7 percent of retail sales, which then exploded to 14 percent in 2020, and last year with the exuberance of being able to go out and shop in stores again, online sales fell back to 11.8 percent. Yet with new generations of shoppers that were born to shop online, there remains a need for Main Street businesses to have a more aggressive “bricks-n-clicks” strategy.

This transition can be a challenge for small business owners. A March 2020 survey of nearly 7,500 small business owners conducted by Main Street America revealed that 63 percent of retailers did not have an e-commerce component to their business. Of those that did, it represented only a small fraction of their sales.

In interviews with small business owners, MSA found the key barriers to greater adoption was confusion around what they needed. There are thousands of different software programs and sales platforms but nothing to guide toward a unique set of solutions. To support them, MSA developed the Main Street Online Tool, powered by GoDaddy, as a free diagnostic tool to assist businesses with understanding their unique needs for social media and digital commerce. Progress is being made, as a follow-up survey in March 2022 of nearly 1,600 small business owners showed a 10 percent increase in e-commerce usage.  

One such business owner is Amber Patitucci, owner of Firefly Boutique in Milledgeville, GA. Amber has seen the direct impact her online presence has on her sales. She notes, “Most view the inventory we have online before ever stepping foot in our store. We have to make sure they see it on the social media platforms, as this tends to motivate the customer to visit the store.”

Another development has been the rise of “social commerce,” which has significantly increased with the influx of new social media channels like TikTok.

Jon Stein, the owner of Fogtown Brewing Company in Ellsworth, Maine, is a young entrepreneur with a business geared toward a younger consumer. He uses his location in an old warehouse next to the downtown to provide a sense of community, as well as content sharing from customers.

“I find, while I use social media to promote events and stay relevant, much of my business from a younger generation comes from local influencers,” he said.

Jon Stein is the owner of Fogtown Brewing Company in Ellsworth, Maine.

The new Main Street small business generation is combining Place with “influencer marketing,” and the power of the digital version of word of mouth by having key customers upload original content to social media platforms like Instagram Reels, Snapchat, and TikTok to create more resilient and relevant businesses.

Jungle Scout’s Q3 2022 Consumer Trends Report revealed that 48 percent of consumers are likely to purchase a product directly from TikTok, while 65 percent have purchased from a streaming platform. One in four U.S. shoppers said they would leave a site if shipping options are limited or they don’t offer a buy-online-pickup-in-store (BOPIS) option.

Even as digital shopping rises, consumers still desire “Place”

Despite the influence of social media and online content on consumer shopping habits, place remains significant in the psyche of consumer experience. While online shopping continues to provide important revenues for brick-and-mortar Main Street businesses, it’s estimated that 72 percent of holiday shopping will still take place inside physical stores.

Another study by Salesforce.com suggests 60 percent of digital orders are now influenced by physical stores, and retailers with physical stores will grow online sales at a rate of 1.5 times faster than those without.

As we look ahead at the 2022 holiday shopping season and events like Black Friday, Small Business Saturday, and Cyber Monday, digital will continue to play a large role in holiday shopping ­­– but in a new way. The global pandemic revealed that an only online existence cannot replace the social and sensory experiences of shopping with friends and family while enjoying holiday lights, smells of pine, and familiar seasonal music playing throughout the stores.

Going forward, social media and e-commerce should be further embraced by a new generation of Main Street businesses and consumers alike. The data shows that Main Streets can survive and thrive when small business owners embrace new technologies and integrate them with their brick-and-mortar locations – and in doing so, create a better shopping experience.

Chief Program Officer at | + posts

Matthew Wagner, Ph.D. serves as Chief Program Officer at Main Street America. In this role, he is responsible for driving the organization's field service initiatives including the development and delivery of technical services for Main Street America and Urban Main programs, directing the Center’s research agenda, as well as the recently launched New Business Development work to focus on national partnerships, brand leveraging and new business growth areas.

Aside from his professional experiences, academically Dr. Wagner has completed his Ph.D. with a focus on economic development and entrepreneurship. He is a Fulbright Specialist Scholar, completing a teaching assignment on social entrepreneurship at the University of Hyderabad, India. He has also presented internationally on topics of economic development and community revitalization in Japan, India, Canada, and Australia. Dr. Wagner also served as part of the U.S. State Department’s Speakers Bureau program, working with the US Embassy in Lithuania as part of a five-region tour on entrepreneurship and community development.

Leave a Reply