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Category: Retail / Small Business / Community and Society

'People die when I tell them how much I spent': How closing down can open new doors

03:21 UTC+8 April 28, 2017 | Rebecca Hyam

Almost half of all retailers open in June 2012 had closed within four years, according to the ABS. (Flickr: Garry Knight)

When you've found a gem of a local business in your neighbourhood — be it a funky clothing boutique, a bookstore, or a hand-crafted furniture studio — it can be pretty devastating to see them close down.

Think of that one shop where you'd always find something original and distinctive, and where you felt good knowing your hard-earned cash was supporting someone in your community and contributing to the overall energy, look and feel of your suburb.

But then it closed, replaced with a chain store or perhaps staying vacant for months. Your go-to shop was gone and your suburb seemed poorer for it.

According to Australian Bureau of Statistics figures, nearly half of all retail businesses open in June 2012 had closed by June 2016. So how do you shop local if your local shop shuts down?

For some small business owners, going 100 per cent online is a way to sidestep rising costs and stay alive.

Chris Smalley opened jewellery design shop Etelage on King Street, a popular shopping strip in Sydney's inner-west, in 2005.

The interior of Chris Smalley's jewellery design and bead store, Etelage in King Street, Newtown. Photo: The Etelage store traded for nine years before closing in 2014. (ABC News)

"The traditional bricks-and-mortar store worked really well for us because the product that we sell is such a touchy-feely product," Ms Smalley said.

The shop sold beads and hosted workshops where customers learned to make their own accessories. But the killer location came at a cost.

"People die when I tell them how much I spent on rents over the years. You do pay a premium to be in a destination strip shopping kind of area. I've spent well in excess of $1 million in the time I've been in business," Ms Smalley said.

Ms Smalley shut the shop three years ago.

"Our profits were going down quite significantly for a few years, but what I did notice in the year before we decided to close was that our online sales had trebled," she said.

Those sorts of crippling rents and expensive overheads also convinced custom footwear maker Shoes of Prey to launch its business solely online eight years ago.

The website prompts customers to choose the design and material for their shoes, which are then manufactured and delivered within two weeks.

Within two years, the business was earning millions of dollars.

Shoes of Prey opened a concept store within David Jones in Sydney in 2013, then expanded into the upmarket US retailer Nordstrom in 2014.

Customers design their own shoes inside one of the Shoes of Prey concept stores. Photo: Shoes of Prey said shoppers no longer needed to see an item in the flesh before they made a purchase. (Supplied: Shoes of Prey)

But co-founder Jodie Fox said branching out into bricks-and-mortar turned out to be the wrong move for her business, which recently returned to its online roots.

"Less and less and less do we ever hear these days 'I want to know what it looks like in real life', which was one of the key insights that drew us into opening a store," Ms Fox said.

"So that's a big indication for me that there is definitely a level of comfort now around shopping online that wasn't there before."

Ms Fox said the lessons learned were invaluable. All Shoes of Prey staff would do shifts in the bricks-and-mortar Sydney store to learn first-hand from real customers.

"All of a sudden [an] engineer is standing in front of someone who's been clicking around on the site, and they're hearing them explain what they need and helping them to find it. The education that we got from it was extraordinary," she said.

That personal interaction with customers is what Ms Smalley misses most about her Newtown store, but she said she had found other ways to connect with people.

Women attend a jewellery-making hens' party event hosted by Etelage. Photo: Etelage continues to offer jewellery-making parties for special events. (Supplied: Etelage)

"We hold pop-up events, we still have workshops and we have 'meet the maker' nights where we hold events in the stores of the stockists of our jewellery," she said.

"We've also had workshops in gallery spaces, and people love that because there's something very intimate and special about being with the designer and learning from them, as they're creating their art in a gallery."

Ms Smalley said that in order to survive, many businesses just needed to acknowledge that times and habits were changing.

"I think more and more people are choosing to spend their money online and my observation is now we kind of stay home and shop and we go out and eat, which when I grew up it was the complete opposite," she said.

"Once you've had … a great online experience, I think you're quickly converted to 'well it's easy, I'm time-poor', it just makes sense to the average consumer today."

Close-up of leopard print swatches and an iPad with a shoe design. Photo: Shoes of Prey has returned to its online roots after a foray into bricks-and-mortar stores. (Supplied: Shoes of Prey)

And for a business owner struggling to stay afloat, Ms Fox had some advice:

"Sometimes you just have to decide which corner you're going to stand in and really put your bet on."

Even if the corner you choose is no longer a corner store.

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