Doing business in the changed retail landscape
Vancouver-area NoMiNoU and Toronto-area Soccer Maxx have retail stores and they also have ecommerce websites. They’ve had to make changes to adapt to the pandemic and to do business as the economy reopens.
About their businesses
NoMiNoU sells athletic-leisure wear that’s based on original artwork created by the late mother of company founder, Jullianna Charlton, or from commissioned work by Indigenous, Canadian and international artists.
Soccer Maxx is owned by Max Bonanno and is a soccer specialty destination with three stores in the Greater Toronto Area, selling brand names in soccer apparel, shoes, cleats, equipment, and accessories to clubs, teams, referees and fans. Most of its sales are in footwear.
Online becomes essential
The retail locations of NoMiNoU and Soccer Max were closed during the shutdown, making ecommerce a survival tool.
“The online business was the only thing that was working for us,” Bonanno says.
“But cleated shoes need to be tried on. They are a very custom fit at a high-performance level. We were getting a lot of returns.”
But Bonanno says the website is helping Soccer Maxx with branding and letting customers know what they offer before coming to his three retail locations, now reopened.
“Before people come to the store, they like to know what styles we offer because it helps them make buying decisions. We expect that the online business will grow as people get to find us and know our services and our reputation.”
Charlton says retail and wholesale had been NoMiNoU’s top performers, not online, until the pandemic.
“It’s a good thing for my business that we already had an active ecommerce site.”
Online marketing campaigns made the difference for NoMiNoU.
“Ironically, we got busier,“ says Charlton.
“We banded together and did some aggressive online marketing campaigns and we offered some promotions. The online sales went through the roof.”
Her company also started to see more and larger orders coming from the U.S. and Europe, noting that customers who have bought NoMiNoU’s wearable art tend to make collections of artists’ work.
She expects that her website will attract different demographics who want to purchase her artistic athletic and leisure wear. “I think the new normal will be people shopping online.”
What our BDC expert says
Senior Business Advisor Rony Israel says that COVID-19 demonstrated the necessity of ecommerce.
“The use of ecommerce in Canada was lagging behind and the pandemic was a wakeup call to leverage the use of technology,” he says.
“Never neglect your ecommerce platform. It will eventually be the platform that will provide value even if stores are open. It will also be the platform that maintains retail survival.”
As a result, Israel says there may be more competition in the online space for retailers over the next 12 to 18 months because there likely won’t be the same volume of traffic as before at retail stores.
That means businesses will need to invest in their websites and in online marketing, he says. Businesses will need to go beyond just selling their goods online and also put an emphasis on service and delivery.
“Highlight your service beyond just the goods that you are selling. Websites also must be easy to navigate.”
Israel also notes that businesses will be exposed to social media, for better or worse. It’s important that businesses using ecommerce get good online reviews and immediately address any bad reviews, he adds.
“You will need to focus on the social media component of your online offering because it will be more important than ever to maintain your online reputation. It takes a lifetime to build a reputation and seconds to lose it.”
Specific strategies each business used
NoMiNoU decided to pivot to making non-medical grade masks to sell online for $20. More than 6,000 have been sold, while others have been offered free with purchase.
“It’s important to identify a niche and then quickly adapt to it,” Charlton says. “We didn’t think that we would be making masks, but now it has become a new revenue stream for us.”
She also believes that sustainable, locally sourced goods will be more important than ever.
“People will be savvy about buying locally and eco-friendly goods. It was important to me that we stay made-in-Canada.”
For his part, Bonanno has made it a point to cut Soccer Maxx’s fixed costs. Merchandise is ordered based on previous sales.
“We don’t want to get stuck with inventory we don’t need,” he says. “We’re adjusting daily. We don’t want to spend more than we bring in. We are focused on the number of customers that come and the average sale number of transactions per day.”
He adds: “Some of our competitors may have to close, which would open up new territories for us and the possibility of franchising. There are not that many soccer specialty stores in the Toronto area and people do take the opportunity to visit Soccer Maxx.”
What our BDC expert says
Israel says every crisis brings challenges but also opportunities.
NoMiNoU, for example, has created masks that not only are needed during these unprecedented times but has now discovered a new revenue stream, he says. The company also recognizes the value of that consumers place on buying local and buying Canadian-made goods, he adds.
Soccer Maxx, on the other hand, has discovered that a presence in certain geographic areas is important, but the business doesn’t need to own all the locations.
“Franchising and partnering are options to consider. These options can reduce operating costs and could allow for rapid expansion,” Israel notes.
Both owners say adaptability will be key going as the economy reopens and Canadians face a possible second wave of the pandemic.
Bonnano says he’d like to get into franchising, adding there are some U.S. models that are worth looking at. He says the franchisors would be responsible for their inventory and he would license the name Soccer Maxx for a monthly royalty.
Charlton says it’s important to find a niche and adjust quickly to make it happen. “Know why our company is special and act on it.”
She also says it’s important to be able to reallocate funds and people where they are needed. For example, if there are no trade shows those funds can be pulled and used for online marketing.
What our BDC expert says
The pandemic has presented challenges to the traditional way of doing business.
The main lesson learned from these successful retailers, is that businesses need to constantly innovate and adapt to the changing needs of their clients, Israel says. Businesses can’t stay still.
“They either grow or decline.”