COVID-19 pushes small retailers toward e-commerce

Shane Hartke had just started dipping his toe into the e-commerce pool when COVID-19 came along and pushed him in.

Hartke owns Addendum Gallery, a high-end gift, jewelry and home store with locations at the Fashion Mall at Keystone and Carmel City Center. He’s been in business for 16 years, and he has a website—but until now he hasn’t sold his goods online.

“I just didn’t really feel a need for it before,” Hartke told IBJ Wednesday. “It’s the wave of the future, and I’m going to have to.”

Hartke is working to add an e-commerce component to his website. But for now, he’s selling online via a retail website developed by his landlord, Carmel-based developer Pedcor Cos.

For Hartke and some of Pedcor’s other Carmel City Center tenants, the site is providing an entry into a whole new world of retail.

Pedcor mainly develops apartment complexes, but its properties also include Carmel City Center, a mixed-use development at the corner of 126^th Street and Rangeline Road that includes more than 25 retail tenants. The nearby Indiana Design Center at 200 S. Rangeline Road, which houses interior design showrooms and retailers, is also a Pedcor property.

Pedcor rolled out its e-commerce site, shop.carmelcitycenter.com, in 2017 as an employee rewards site. Pedcor gives its employees a Carmel City Center gift card each year as a perk, and the e-commerce site allowed the company to expand this perk to employees at its out-of-town apartment developments.

“It was intended as a way to introduce our businesses to those employees,” said Jimia Smith, a vice president and marketing director at Pedcor.

The company had intended at some point to start marketing the site to the general public, Smith said, but the arrival of COVID-19 accelerated those plans.

Carmel City Center’s retail tenants are independently owned shops, some of them without an e-commerce platform of their own, Smith said. So when local and state stay-at-home orders forced the stores to close their doors, Pedcor saw its online shopping site as a way to help its small-business tenants.

“I think they’re the heart of the economy right now, and we want to do everything in our power to support them,” Smith said.

Smith declined to say how many Carmel City Center tenants have asked for deferrals or other rent concessions to date.

Though the bones of the website were already in place, Pedcor and its web developer had to work for about two weeks to make sure the site could handle an increase in traffic. Pedcor began marketing the site to the public late last week.

The e-commerce site is opt-in, Smith said, because participants must manage their own online storefronts, including selecting merchandise, uploading product photos and writing product descriptions. To date, 16 tenants, including Addendum, have signed on to the site.

Among the others is women’s boutique 14 Districts, which until now didn’t sell any of its merchandise online. “I don’t even have a formal website set up at this point,” owner Rebecca Hanson said.

Over the past seven weeks, Hanson said she’s shifted her focus online, reaching customers not only through the Pedcor site but also via Instagram, Facebook, emails and text messages. She has a background in marketing which she said has helped her make the transition.

Though the new focus has required 15-hour work days and a flexible attitude, Hanson said she’s picked up new customers from Hawaii to the East and West coasts. She’s had particular success with Instagram. “I gained probably 500 Instagram followers in a two-week period, and that has had a very significant impact on the business.”

Hanson declined to say how much her sales have dropped because of COVID-19, but said she’s been holding her own over the past seven weeks.

Addendum hasn’t seen as many of its sales migrate online, but Hartke said the Pedcor e-commerce site has “been a great help to us.”

About 30% of Addendum’s sales now come from the Pedcor site, with the remaining 70% coming from customers who call or text the store. Customers can receive orders via mail or curbside pickup.

Hartke said he can’t put his entire inventory on the site, partly because of vendor restrictions on which items he can sell online. So far, candles are among his best-sellers online.

Hartke declined to say how much his sales have dropped overall, other than to say, “we are trying to survive here in Carmel.”

Addendum’s Fashion Mall store has been dark since Simon Property Group closed all of its malls March 18. Hartke has furloughed all 14 of his employees and is running the Carmel shop by himself.

Another Carmel City Center tenant that has opted in to the Pedcor site is Rusted Window, a floral, home décor and gift shop at the Indiana Design Center.

The store’s website was already set up for e-commerce, owner Stacy Molandar said, but until now only about 10% of her sales happened online. Most of those were floral orders.

Now that her shop has been forced to close, Molander said, sales have dropped about 80%, from an average of $5,000 a week down to $1,000.

But she has seen a shift to online. Now, she said, at least 70% of her sales originate online, with the other 30% coming from phone-in orders. “We’ve been working really hard to get as much product on the website as we can.”

So far, Molander said, her best online sellers are stuffed animals that make a farting sound when squeezed.

“It’s just something, I guess, to make you smile—and we need it right now.”