EBay believes its new boot camp could boost beleaguered storefronts
When childhood friends Preston Clark and Frank Miller III started Seventh Floor Clothing in Akron, Ohio, in 2016, the new entrepreneurs quickly gained a boost from a hometown hero. One of the streetwear brand’s first products, a “Kiss the Trophy” hat hyping the championship chances of the NBA’s Cleveland Cavaliers, was promoted on Instagram by none other than LeBron James.
The small gesture helped the company sell hundreds of hats and shirts and gain an early audience. A few years later, another big name has helped the duo not only prosper, but realize their dream of opening a physical store in downtown Akron, at the city’s Northside Marketplace, this past November: eBay.
The latest assist is part of a new initiative from the e-commerce giant, Retail Revival, a nearly year-old foray into promoting small businesses and storefront retail in select U.S. cities master online sales and tap into eBay’s vast international marketplace. Active in Akron, Ohio; Lansing, Michigan; and Wolverhampton, England, the program argues that e-commerce, often portrayed as a force killing these same brick-and-mortar stores and smaller businesses—a widely cited report from 2016 suggests Amazon has cost the retail industry tens of thousands of jobs—may actually be its savior.
Preston, who trained as a graphic artist, believes the dream of opening a store featuring his designs wouldn’t have been possible without eBay’s assistance.
“They understand that small businesses aren’t thriving online,” says Miller. “We’ve reached a whole different market, a whole different status, due to the program. It’s helped make us respectable in the industry.”
E-commerce wants to be the savior of small business
In a world that seems more and more dominated by Amazon every day, it’s easy to forget about eBay, an e-commerce pioneer. But that underestimates the company’s size: According to an analysis by the consultancy L2 Gartner, eBay nets nearly 707 million monthly visits and has the second-most visits per visitor after Amazon, meaning loyal customers and sellers frequently come back to the site.
Launched early in 2018, Retail Revival has been billed as a digital bootcamp. The company provides participating retailers with a suite of classes and resources during the year-long program, teaching eBay-selling basics, strategies to best use eBay’s platform, and tools to boost business.
From classes on properly listing and naming items online to photo facilities to help create more enticing images of products, each participating business receives a break on seller’s fees and is connected with a conciergerie service that provides direct access to customer-service assistance from eBay reps.
Small businesses already earn a significant amount of their revenue online—they made roughly $3 billion during last year’s Small Business Saturday promotion in November—but often lack the time, resources, and expertise to fully optimize sales on the various platforms or their own websites. The vagaries of shipping costs and the intricacies of managing different platforms and customer service can be daunting for a small company.
According to eBay’s Chris Librie, head of global impact and giving at eBay, the company saw the opportunity to “turn it up a notch” and give a boost to smaller sellers by actively intervening in a city.
“We saw what was happening in brick-and-mortar retail—the number of store closures, the bankruptcies of major chains like Toys R Us—and felt that we needed to do something,” Librie says. “E-commerce practiced the way eBay does could actually could be a tool, a powerful addition to a brick-and-mortar retailer. That’s what we set out to prove.”
From the perspective of an entrepreneur, said Seventh Floor’s Miller, it’s a “no-brainer.” The eBay program has helped them increase sales by 30 percent since they started the program.
“A multimillion-dollar company com[ing] to Akron to help build your business sounds good to me,” he says. “We had exposure, but they had the machine. They started e-commerce.”
According to eBay stats, Akron has seen a solid boost due to Retail Revival. The 74 participating companies have seen over a million dollars in new economic activity on eBay, and a 40 percent year-over-year boost in online sales, including shipments to 64 countries. Another local firm, Five Blessings, also opened a brick-and-mortar location.
Akron’s mayor, Daniel Horrigan, says eBay’s investment in the city has been a great addition to the area’s wider economic development initiatives. It’s not a game-changer by itself, but in a world where every city is fighting for talent and opportunities, having a big name in town makes a big difference.
“I think you have to be intentional when you help small businesses,” he says. “They provide the deeper roots to weather the storm. One or two jobs at a time, that adds up. They’re more singles instead of home runs, but it’s important.”
How a small company can stand out in the everything store
Retail Revival is a direct extension of the company’s larger vision to help sellers and small businesses thrive, according to Librie. When the idea was hatched in late 2017, the company embarked on extensive demographic research to find the right location, factoring in data like employment rates and average incomes as well as existing economic activity, like Akron’s new Bounce innovation hub, and small companies with “unique points of view.”
“We know that one of eBay’s strengths has been that we provide the thrill of finding something unique and different,” says Librie. “Sure, Retail Revival helps with that dramatically, but I don’t want you to think this is just a business development move on our part. The amount of business being generated is relatively small for us. But it’s very significant to the businesses, though, and that’s the fun part.”
Librie wouldn’t give specifics, but across three cities, Retail Revival has cost eBay “well above six figures” and more than 10,000 hours of management time.
Bill Duffy, a retail analyst at Gartner L2, says the company’s investment, in addition to the great PR of assisting small businesses in the Rust Belt, helps eBay in a larger e-commerce competition. Companies like Amazon and Walmart are racing to become the “everything store,” trying to be the marketplace for whatever consumers need. At the same time, small outfits have various ways to list their goods online, from advertising on the bigger marketplaces to building their own websites and using payment systems provided by companies like Square and Shopify. In addition to adding unique products, Retail Revival lets eBay show off to other small businesses looking to list their wares.
“EBay is emphasizing that they’re working well with their partners, and trying to be a friendlier place,” says Duffy. “They’re bringing the human side back to that third-party marketplace.”
Retail Revival also comes as the larger retail world shifts strategy. A blended commerce model has begun to emerge, mixing online and brick-and-mortar: as giants like Target and Walmart use extensive resources to boost their growing online sales, new online-only brands such as Warby Parker are opening retail locations. Librie believes that helping small business realize the advantages of this model—accessing a worldwide market, and using better online promotion to draw attention to their existing storefront—expands their reach without diluting their efforts.
“You need both,” says Gartner’s Duffy. “You need a physical presence for customers to engage with, and [you need to] be online so customers can buy something on their smartphone as soon as they want it.”
Some of the Retail Revival participants have realized the benefits of blended commerce. Liberty Coin Service in Lansing, Michigan, which sells collectibles, says the company was already invested in online sales, but has now seen increased sales from eBay. More importantly, according to Mark Patterson, who handles marketing for the 15-person company, lessons learned during the program have helped them raise their profile and promote different products to area shoppers.
“It’s broadening our market considerably,” Patterson says. “We’re starting to promote our jewelry sales, things perhaps people didn’t expect.”
In Akron, the niche online seller Ice Machine Discount, a specialized offshoot of a local food equipment distributor, has also benefited from the eBay program. E-commerce has been both a benefit and a challenge, according to Eric Kinnell, the company’s digital marketing manager; there’s a larger audience, but pricing has become more competitive and shrunk margins. With Retail Revival, eBay made a more challenging landscape a little easier to navigate.
“Their customer service has been extremely attractive,” he says. “I’ll work with other platforms, trying to call customer service to resolve an issue, and it becomes agonizing to the point where I’m willing to give up the new business.”
Big marketplaces chasing after smaller sellers
Other big e-commerce firms have embarked on their own efforts to support small storefronts and companies—with mixed results. Earlier this year, Etsy shut down its Wholesale program, which connected smaller makers with larger chains, like West Elm and Williams Sonoma. Even WeWork launched a WeMRKT program to sell products within some of its myriad coworking locations.
Amazon remains the biggest source of sales for small businesses, claiming that half its sales globally come from small- or medium-sized outfits, accounting for 900,000 jobs. The platform’s Handmade gift shop page, and, more recently, its Storefronts section were designed to make it easier for small companies to access Amazon’s large audience. But according to a Digiday article, many sellers feel the company, which charges more for sellers than eBay, can be less than responsive.
Shopify, the Canadian e-commerce program aimed at small businesses, recently opened a space in Los Angeles in October that offers online retail consultations, problem-solving workshops, and even mentorship sessions, with one of the stated goals to help online retailers and aspiring entrepreneurs open brick-and-mortar stores. According to the company’s vice president of channels, Satish Kanwar, Shopify LA “signifies that we are all-in on retail, and helping more merchants sell in person, not just online.”
“We’ve heard through various merchant touchpoints that the journey to sell in-person comes with significant costs, in terms of both financial and emotional investment,” says Kanwar. “We’re putting an emphasis on reducing the barriers to selling in-person by supporting our merchants with retail hardware and software.”
Can Retail Revival create neighborhood revival?
Retail Revival has emerged at a time when businesses and the bigger e-commerce platforms are all seeking new ways to expand their audiences, and small businesses battle to survive an evolving marketplace. But is it going, or can it go, beyond a slight sales boost to create real, lasting neighborhood revival?
Librie himself has said they expected the program to be seen as a stunt, but it’s a much more serious commitment. It’s not about the dollars, he says, but the reach: offering small companies a chance to benefit from an international marketplace. Already, the company plans further expansion in 2019, adding two more locations in the U.S., as well as another international one. There are also plans to open a work-at-home call center in Akron.
“Just exposing Akron’s businesses to the world, that’s been huge,” he says.
In both U.S. cities where the program is currently operating, it’s seen as a boost, albeit not a game-changing retail renaissance. In Lansing, where 49 companies have been participating in the program since August, Mayor Andy Schor believes eBay’s initiative can be a small part of a larger strategy.
“Small businesses are the lifeblood of the economy,” he says. “In Lansing, we still have GM and two hospital systems, but everyone who works here still needs retail, goods, and services. People have to take a risk, and buy a building, and open a small business. Those who will take these risks now have additional tools through eBay.”
Cori Thackery, a former teacher and founder of Lansing’s Sweetlees Boutique, is one of those risk takers. She started the clothing store in 2016, and has expanded rapidly, using a Facebook group for promotion and now employing nine and operating her own brick-and-mortar store. The customer support and assistance through Retail Revival has been great, but so far, eBay has just added up to about 1 percent of her monthly revenue.
“Is it making a huge difference?” Thackery asks. “No, but I hope that as I continue to expand the store, and use eBay’s tools, I can keep growing that presence.”
It’s also helping her build up more business at her store. The brick-and-mortar location has allowed her to reach out more to her community.
“Even if you’re across the country, I want you to be able to shop at my store, and, no matter what size you are, feel comfortable and that you’re a part of something,” she says. “I know it sounds cliche to say [it, but] small businesses really are the heart of the country.”