An employee cleans at the Alaska Club.
Challenges, innovations, and takeaways on navigating retail commerce during the pandemic
Matanuska Brewing Company was on the path to experiencing record sales at the start of 2020. And then COVID-19 hit.
“It was probably the best January and February we’ve ever seen,” owner Matthew Tomter says. “Then we see Seattle shutting down, and we realized this was about to happen.”
The arrival of COVID-19 led to sweeping health mandates from state and local governments that resulted in closed doors at all businesses except those deemed essential in an attempt to “flatten the curve” of the virus.
Many industries quickly shifted to a work-from-home model, relying on virtual conferencing platforms to conduct staff and client meetings. But businesses that depend on foot traffic for the bulk of their revenue, such as those in retail, hospitality, and the arts, were left scrambling as they attempted to operate from behind closed doors.
“We were faced with navigating some really disheartening decisions throughout the timeline of this pandemic that we had never once anticipated we’d have to make in nearly thirty-five years of doing business in Alaska,” says Michele Parkhurst, COO of Kaladi Brothers Coffee, which owns seventeen cafés across Southcentral and the Rustic Goat restaurant in Anchorage.
Those decisions included layoffs: an April survey of Anchorage businesses conducted by the Anchorage Economic Development Corporation found that one in three respondents had laid off at least some of its workforce or was continuing operations with a skeleton crew. Some restaurants closed temporarily for either all or a portion of the shutdown because curbside delivery and take-out, the only options permitted, simply weren’t feasible.
The closures also forced businesses to come up with innovative solutions to keep customers coming through their doors—if not literally, then figuratively—even when they couldn’t belly up to the bar for a drink or enjoy a weekend brunch with friends.
Connecting with Customers Outside the Box
With foot traffic non-existent, one of the biggest obstacles restaurants and other non-essential businesses faced was staying connected to customers, says Tosha Swan, manager of programs and communication at the Anchorage Chamber of Commerce. Social media, virtual events, and even shopping via FaceTime played a huge role in maintaining that customer base.
“The Alaska Club, F45 Training, Pure Barre, and /vīb/cycle offered virtual workouts and live streaming via social media,” Swan says. “Over the Rainbow Toys [let customers] shop virtually via FaceTime and offered curbside, non-contact pickup service; I was able to call and order a customized Easter basket for my daughter.”
Bill Popp, president and CEO of the Anchorage Economic Development Corporation, agrees that the most successful businesses were those that switched to a more online-focused business model. But he was quick to add that measuring success is significantly different during a pandemic.
“We’ve by no means seen an ability to make a profit, but at least it’s starting to mitigate some losses,” Popp says. “We’re seeing some success for some retailers who have taken a long, hard look at their business model and have gravitated to their website being a key selling tool.”
Matanuska Brewing Company beefed up its online presence as soon as the closures began, Tomter says. He increased the restaurant’s Facebook posts and joined online groups that had sprung up to support local restaurants.
“We jumped into social media, heavily touting our delivery and curbside takeout,” he says. “And we were really spreading the word about how we were doing it, really being positive about it and explaining ourselves thoroughly to assure customers that everything we’re serving is safe.”
Some restaurants trimmed their menu offerings so as not to overwhelm a limited crew. Others experimented with take-and-bake and family-style meals to entice customers—many of whom were overwhelmed themselves, juggling working from home with homeschooling—to place an order.
“Restaurants like Sullivan’s, Simon & Seafort’s, and Texas Roadhouse were offering family meals for pickup,” Swan says. “Bear Tooth was offering margarita kits with food orders.” Other restaurants offered everything from make-your-own taco kits to take-and-bake or decorate-at-home cookie kits.
Kaladi Brothers began “The Bean Drop”—a next-day delivery of whole bean coffee right to the customer’s door.
“It’s been a completely creative idea for us and something we’ve never tried before,” Parkhurst says. “This program has worked out really well all around and has been a great way we can adjust to the changes going on and continue to support and provide to our community.”
For cultural venues like the Anchorage Museum at Rasmuson Center, the closures changed the way they went about fulfilling their mission.
“It was a major shift in thinking because we always thought public service meant staying open,” says Executive Director and CEO Julie Decker. “So thinking that public service meant closing was a huge shift.”
Decker says the museum’s staff of sixty-one was fully remote within two days and began creating free digital content, including virtual tours and concerts, immediately.
“It was amazingly rapid,” she continues. “We were able to provide access to the collections and to the artwork in a way that we haven’t been able to achieve before, so I think a lot of that will continue. We would never suggest that seeing artwork on a computer is comparable, but we were heartened by the reach that we had.”
Evolving Business Practices
Although the state allowed a gradual reopening of both essential and non-essential businesses in May, it didn’t signify a return to normal. Limits on seating capacity for dine-in service, stricter cleaning and disinfecting protocols, and social distancing requirements continue to redefine business-as-usual. There is also a large segment of the population that remain uncomfortable congregating in public, which translates to less foot traffic.
The Midtown Mall implemented several strategies to maintain compliance with state and local mandates, says Marketing Manager Amber Musso. The mall restricted entry to two doors, down from the usual eight, installed signs explaining social distancing and mask-wearing requirements, and instructed mall security to prevent patrons from lingering in the corridors.
“It’s not a situation where you come to the mall and browse and shop,” Musso explains. “It’s more a situation where you know the store you’re going to and you go there. If the store is at capacity, you let them know you’re there and go sit in the car and wait.”
Kaladi Bros. is reopening its cafés a handful at a time and, as of mid-May, planned to offer take out only, Parkhurst says. She adds that staff have undergone extensive training in new cleaning and disinfecting protocols, in addition to the installation of hand sanitizer stations for customers. They’re also experimenting with a new bar flow at the Brayton Avenue café to improve social distancing.
The biggest challenge with reopening for dine-in service isn’t the heightened cleaning protocols, Tomter says. It’s enforcing social distancing requirements.
“We found once we started doing dine-in with all the rules, it’s easy to keep things clean, it’s easy to spray everything with sanitizer,” he explains. “Actively managing social distancing was probably our biggest challenge, but we figured it out. It’s a learned trait.”
Restaurants and retailers are also continuing to offer alternative shopping and dining options, even as they expand to offer dine-in and in-store shopping.
“People who didn’t normally do curbside are continuing to do curbside,” Musso says. “We have stores that are scheduling private shopping appointments for FaceTime shopping or texting or emailing photos [of items] to shoppers, and that’s something that they wouldn’t have done before.”
Tomter also expects to continue the ramped up delivery model at Matanuska Brewing Company.
“The population’s going to segregate,” says Tomter. “There’s going to be a population that’s going to be unable to wait to get back out there, and there’s going to be some who aren’t. Our goal is to get our beer and food to whoever wants them wherever they are. So if we have to adjust to do that, we certainly will.”
Popp anticipates a “long, painful path” for both the retail sector and the entire Anchorage economy as it attempts to recover from the effects of the pandemic, saying it could take years to achieve a significant return to profitability.
Popp believes part of that preparedness will include businesses bulking up cash reserves.
“I have a sneaking suspicion that all businesses are going to be looking at their cash on hand model for the future and are probably going to be carrying a lot more cash on hand if they possibly can for these types of shutdowns,” he explains.
At Matanuska Brewing Company Tomtar says, “There’s no money being made right now. We’re staying afloat, we’re bringing in what we spend. To be able to make it the next twelve months is what’s necessary; 2020 is going to be a survival year.”
But businesses can still use the pandemic as an opportunity to better prepare for future shutdowns, whether related to COVID-19 or some other disaster.
“I think the biggest lesson we’re learning is that, ultimately, the ongoing security and stability of a long-standing company who has been operating for over thirty years can be shaken down and impacted greatly in literally a matter of days,” Parkhurst says. “These abrupt changes have made us realize the importance of preparing for emergencies outside of the company.”
For businesses that lacked an online presence, the pandemic should serve as a wake-up call to create a website and operate an active social media page.
“We learned that businesses need to embrace technology in order to make it in the digital world,” Swan says of just some of what the chamber has learned from the community. She also anticipates that events will continue to go virtual to increase reach and participation.
The pandemic has also altered how businesses view their space in terms of health and safety concerns. The Anchorage Museum revised its emergency plan in March, Decker says, and the experience has been markedly different than when the museum had to deal with the aftermath of the 2018 Anchorage earthquake.
“There was something surreal about updating our emergency plan in March, about dealing with pandemics, conversations you didn’t expect to have,” says Decker. “We were in webinars with other museums discussing the legalities about work environments, health and safety, cleaning products, even cleaning elevator buttons. It’s a different kind of physicality we had to learn.”
Musso agrees that changes to how customers shopped during the pandemic are practices that may ultimately help businesses reach more customers in the future.
“Even when we’re not in the middle of a pandemic, there are things that make [life] more convenient, something that shoppers appreciate,” she says. “I do think changes are coming that will broaden how we shop.”
She says one of the key takeaways for the Midtown Mall is that survival depends in large part on a business’ ability to adapt.
“I don’t think that people can prepare for something like this, but there were a lot of things that people did to try and adapt,” Musso adds. “People delivering that didn’t deliver before—we had a couple of stores that mailed out when they didn’t do that before. Be as flexible to change as possible, have multiple backup plans, [see if] you can tailor your business plan in any other way to fit rapidly changing circumstances.”
In This Issue
The Corporate 100
Alaska Business has been celebrating the corporations that have a significant impact on Alaska’s economy since 1993. At the time, the corporations weren’t ranked as the list didn’t have specific ranking criteria. Instead, the Alaska Business editorial team held long, detailed, and occasionally passionate discussions about which organizations around the state were providing jobs, owned or leased property, used local vendors, demonstrated a high level of community engagement, and in general enriched Alaska.