It’s no secret new businesses face tough odds. Fifty percent of new businesses fail within the first 12 months of operation, said Ray Mattes, president and CEO of the Retail Alliance. Nationwide, he expects more than 8,500 storefronts to close in 2017.
The Norfolk-based Retail Alliance launched its Center for Retail Excellence in January. The goal is to serve as a place where “aspiring businesses can go to learn how to run a business,” said Ray Mattes, president and CEO of the Retail Alliance.
The nine-month educational program combines online and face-to-face classroom courses in seven areas: how to start a retail business; accounting; security; merchandising; sales/advertising/marketing; management and human resources; and business planning. Each module runs for six weeks. Classes not online are at the alliance’s training room at 838 Granby St.
“We hope the certification will be part of the effort to wean Hampton Roads off its economic dependence on the defense industry,” said Mattes. In the last training module, participants present a business plan in a “Shark Tank” environment to local bankers, who critique its feasibility. For the past two years Julie Waltz has run the embroidery department at Eggleston Services Inc. She signed up for the program eager to learn more about the retail side of business.
“It helps to give me a better sense of direction as to which way to go and how to proceed instead of pulling things out of thin air,” Waltz said. “I didn’t realize, until I got into retail, how big a presence the Retail Alliance is in the community. They really are about supporting the retailer and fostering local businesses.”
By this time next year, Mattes anticipates they will have educated between 35 and 50 existing retailers through the center. Mattes shared with Inside Business details regarding a number of advances the association has made in recent months.
The alliance has been working with the Virginia Retail Federation advocacy team, which represents 10,000 storefronts statewide, in its efforts to lobby for national and independent brick-and-mortar stores.
“What we’re fighting is the need to ramp up local retailers,” Mattes said. “If they’re going to survive, they need to be sophisticated. They need online websites, marketing, branding and great customer service.”
Together, the coalition has helped expand application of state and local sales tax to online retailers who have a nexus or inventory storage facilities in Virginia.
“We feel there is an unbalanced or unfair playing field in that when you’re purchasing from out of state you don’t have to pay sales tax, but our brick-and-mortars have to collect sales tax,” Mattes said, noting it puts local retailers at a disadvantage.
State legislators Sen. Emmett Hanger and Del. Vivian Watts sponsored legislation to apply sales tax to online retailers. Gov. Terry McAuliffe backed the bill, which is projected to bring $21 million in new tax revenue to Virginia annually. While there are still plenty of online stores outside of the state that do not collect sales tax, Mattes said Congress must address that issue at the federal level. “Our lobbying efforts are about impacting an issue that impacts retailers,” Mattes said. “We go to bat for them.”
Although national retail downsizing is continuing, innovative, highly successful pockets of local retail are emerging, and Mattes said the alliance is helping business owners with strategies for the future. “If a dollar stays local it’s worth seven times more than if it’s going to a national chain,” Mattes said.
One alliance initiative has helped to keep local dollars in the community which, in turn, spurs the local economy. The LOVEVA campaign for local mom and pop businesses has grown by 200 percent in consumer usage through the app, which was initiated two years ago. “We call it the app that loves you back,” Mattes said, noting more than 14,000 app users are collecting more than 100 hearts, which equate to rewards, each day.
The buy local program has more than 300 local businesses in it. Users earn a heart for each purchase and 10 hearts give them a discount. “It’s the only one of its kind that has an app,” Mattes said. “It’s a way that we can measure the success of it.”
Started in 1903 as the Retail Merchants Association, the Retail Alliance has 16 employees who work in advocacy and membership.
“We live on a three-legged stool: advocacy, education and product/services,” Mattes said. “Our mission is to be a trusted resource for the success of local retailers and that’s really what we hang our hat on.”
See this article on Inside Business.