To change and how? — question facing Homer’s small businesses
When Will Files sold Tech Connect to Craig and Gayle Forrest in 1997, it was because things were changing.
“The computer business was going into two phases: high-end networking like we have today, which was very technical and I didn’t want to get into it, and computer experts going out of style and computer maintenance in style, and I wasn’t particularly interested in that either,” said Files.
In the 20 years that followed, the Forrests hired high school students who, having learned the ins and outs of computers, have gone on to professions in the IT field. They offered internships through AVTEC, a career and educational education center in Seward. They formed a relationship with Radio Shack and began selling higher-priced products like printers, laptops and televisions. They diversified, offering computer repair, retail sales and an Internet café. They began opening at at 6 a.m. on Black Friday to satisfy sales-shopping customers. Their success grew to make TechConnect a $1 million business at one point, that growth earning a Radio Shack award.
Then came the perfect storm.
“The biggest impact happened about five years ago when the price of oil started going down and more people were going north to shop,” said Gayle Forrest. “And then about three years ago Amazon Prime really made an impact on the community. And at the same time, Radio Shack was going through their first bankruptcy and we couldn’t get product.”
Instead, the Forrests bought products from Amazon Prime because it was the fastest and surest way to get items customers wanted. The downside was having to mark up the price of the products to cover operating expenses. The Forrests committed to honoring the national price for Radio Shack products, but, while that benefited customers, it did nothing for paying the bills.
“If fuel prices had risen or people decided they wanted to buy in town instead of buying out, any one of those things would have made a difference. But we can’t fault people for wanting to get items as cheap as they can. They’re all under the same crunch we are,” said Craig Forrest.
Six months ago, the Forrests decided to put the business up for sale. June 30, the end of a three-year lease on their store space, was the final deadline. If TechConnect didn’t sell by then, they’d close the doors. It didn’t, and so they did.
The Homer Bookstore also has felt the impact of changes in the business and shopping world outside Homer.
“Amazon and eBooks decimated bookstores all over the country for awhile,” said Lee Post, one of the store’s owners. Sales plummeted, “but it’s kind of plateaued at the bottom and gone back up over the last three years in terms of us and bookstores in general all over the country. That’s the good news out of it. It’s not any worse than it was, and it was way worse in terms of going down, down, down each year,” he said.
Joy Jules of Knitty Stash is well aware some of her customers shop online.
“They come in looking for a yarn they need more of and they acknowledge they got it online,” she said. Not only do online sources offer yarns she doesn’t carry, they also make it possible to “get your yarn anytime you want it. A person who is wanting to start a project knows they can shop at 10 at night and their yarn will arrive usually in a couple of days.”
To catch some of that online traffic both in and out of town, Jules added an online store to her website. She also expanded her business by wholesaling yarns she handpaints.
“I have six stores around the state and one Outside who carry my handpainted Alaskan colors. One of the stores is in Skagway and they get a bazillion cruise ship visitors and I’ve had people shop online or come into the store from purchases they’ve made in Skagway.”
Expanding into wholesale has proven a lifesaver for Knitty Stash.
“The shop itself, if I didn’t have wholesale, would not be open,” said Jules.
During the 2016 holiday season, Karen West of Sustainable Wares developed an online store “just to expand into a broader market.” The borough’s recently changed tax code allows West to charge tax for all instate online orders.
“Anything I ship in the state of Alaska gets charged 7.5 percent, which stays here (in Homer),” she said.
West also has discovered some of her inventory isn’t carried at any other online site.
“It’s mainly body care products and clothing. People who are familiar with the brands and wanted to stick with them can get them locally,” she said
Karin Marks is the former owner of Art Shop Gallery and chair of the city of Homer’s Economic Development Advisory Commission.
“When I had Art Shop Gallery, it became obvious people were no longer buying particularly on websites. You had to have an online store,” she said. Marks developed an online store and “I would say that is one of the reasons why we stayed in business and are still doing well in business.”
Recalling objections raised when a box store considered opening in Homer, Marks said, “The fact of the matter is in my mind that Amazon.com is a big box store. It’s just not sitting on property here in Homer. And so a lot of people who said they have a thing against big box stores are still buying in one.”
The definition of “success” influences decisions confronting business owners. For some being successful means having more recreation time. Others want to take their business in a new direction or expand their inventory. Age can be a deciding factor when considering long-term commitment and investment to develop a business.
“One of the reasons that I was ready to quit my business was because I could see the next level of advanced technology and I knew in my business it would take a little more effort,” Marks said.
The city’s Economic Development Advisory Commission is currently conducting a business retention and expansion survey. The deadline is Oct. 13.
“We realized as commissioners that we needed to draw more information from all the businesses in the area, whether they’re in Homer or not, because we needed to know from their perspectives,” Marks said. “If you have any kind of business, no matter the size, complete it,” said Marks
Karen Zak, former Homer Chamber of Commerce executive director, said the local impact to online shopping is “huge.” Business owners are responding by customizing and reevaluating services, inventory and local demand. They are using social media to stay in touch with customers, advertise specials and announce new products and services.
“Over 65 percent of every dollar spent locally stays in our community and fuels our family, friends and neighbors jobs. Just think what it would be like if your favorite business closed due to the impact of shopping online, then it is too late. The local businesses have made a huge investment in our community. It is so important to support them, even if it costs a few extra dollars,” she said.
Zak recommended anyone considering starting a business in Homer explore service-based businesses that are in high demand and would fulfill an existing need or offer unique products not available elsewhere.
Recalling her Alaska childhood and the anticipated arrival of Sears and Roebuck and Montgomery Ward catalogs, Gayle Forrest laughingly observed how shopping has come “almost full circle. Growing up we ordered everything from the catalog.”
The Forrests expressed appreciation “for the people that have supported us all along.” Surrounded by boxes and empty shelving, their business concerns are now replaced by what the future holds: a 20-by-60-foot high tunnel for vegetable growing and completing work on their house.
McKibben Jackinsky is a freelance writer who lives in Homer. She can be reached at email@example.com.