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Adding Wish products to your inventory could keep your small shop open

(BUSINESS NEWS) Online retail giant Wish moves to push products through small businesses in the US since a UN shipping subsidy was cut. Could piggybacking e-commerce afford retailers a lifeline in pandemic America?

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wish goods

The $11 billion e-commerce purveyor of dollar-store value tchotchkes, Wish, was built on the foundation of cheap shipping subsidies. The Universal Postal Union (an arm of the UN that governs international shipping rates) previously provided a subsidy such that any package weighing less than or equal to 4.4 pounds could be shipped more cheaply from China than within the United States. But on July 1, the subsidy was eliminated and shipping costs doubled overnight.

Since January 2019, 36,000 small businesses in the United States and Europe have partnered with Wish to stock their items. In return for putting a few kitschy knick-knacks on their shelves, they get access to Wish’s 80 million active users. These users are generally low-income folks who either can’t afford or refuse to shell out the $119 per year for Amazon Prime membership, which affords customers oft-discounted goods and free shipping. Wish saves on operating costs for warehouses and workers, and consumers save money on the back end.

Wish hopes to increase their small business partners to 100,000 businesses by the end of 2020. That goal is ever more important given the subsidy cut that now disincentivizes their initial model. If customers want the same low-price goods they have grown used to, they will now have to pick up their parcels from a local retailer that Wish is bundling and funneling orders through. These partnerships – though they may water-down the quality of offerings by small retailers – provide an innovative solution for small business that have struggled to survive closures and capacity restrictions since the coronavirus outbreak took off in the US.

Granted, the world will keep turning without services like Wish. The website is the ultimate data-collecting scam. You can’t enter the website without logging in, and once you do, you have to select your age range and the gender you’ll be shopping for: women or men (Can’t I shop for everyone, including those in between and outside the binary? Get with the program, Wish!) Can’t they figure out my shopping habits by spying on me through cookies like everyone else?

At least they offer 10% off during your first three days of shopping! AND 50% off if you login 7 times in your first month! How’s that for a predatory shopping experience?

But I digress. If capitalism has taught us anything (as much as it pains me to put this in writing) it’s that America cannot rely on the government for nimble, holistic solutions that support the shared interests of public health and economic health. At least not for this particular public health crisis during this administration, if not always. Instead, we consistently rely on the private sector to offer us innovative solutions to our daily frustrations: transportation access (Uber/Lyft), grocery shopping (Instacart), affordable prescriptions (GoodRx), job hunting (LinkedIn/Indeed), and more. What makes this different?

Small businesses have suffered deeply from this pandemic and subsequent recession. Metlife and the US Chamber of Commerce conducted a poll of small businesses published on July 29, which found that 70% of respondents are worried about long-term financial hardship due to closures, and 58% worry about permanently closing. Retailers could pivot to set up e-commerce solutions to their brick-and-mortar woes, but the barrier to entry using that technology costs time and money that owners may not have as they fight for PPP loans, rent forgiveness, and negotiating interest rates.

The United States practically guarantees affordable manufacturing can only be imported from Asia. And so long as capitalism guarantees there will always be a class of consumers surviving on the lowest margins of our society, there will always be demand for cheap goods. Every purchase matters for a small domestic retailer to stay open and afloat. If the flow of these goods through American small businesses offers owners a way to keep their doors open and low-income consumers a way to keep purchasing – even if only by small tokens of increased foot traffic and impulse buys – it’s worth it.

Heather Buffo is a Cleveland native, a recovering Bostonian, and an Austin newbie. Heather has her Bachelor of Arts in Neurobiology from Harvard University, and is a City Year Boston AmeriCorps alum. When she's not writing for AG, you can find her pouring beers at the Brewtorium, but only one at a time.

Business News

Hobby Lobby increases minimum wage, but how much is just to save face?

(BUSINESS NEWS) Are their efforts to raise their minimum wage to $17/hour sincere, or more about saving face after bungling pandemic concerns?

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Hobby Lobby storefront

The arts-and-crafts chain Hobby Lobby announced this week that they will be raising their minimum full-time wage to $17/hour starting October 1st. This decision makes them the latest big retailer to raise wages during the pandemic (Target raised their minimum wage to $15/hour about three months ago, and Walmart and Amazon have temporarily raised wages). The current minimum wage for Hobby Lobby employees is $15/hour, which was implemented in 2014.

While a $17 minimum wage is a big statement for the company (even a $15 minimum wage cannot be agreed upon on the federal level) – and it is no doubt a coveted wage for the majority of the working class – it’s difficult to not see this move as an attempt to regain public support of the company.

When the pandemic first began, Hobby Lobby – with more than 900 stores and 43,000 employees nationwide – refused to close their stores despite being deemed a nonessential business (subsequently, a Dallas judge accused the company of endangering public health).

In April, Hobby Lobby furloughed almost all store employees and the majority of corporate and distribution employees without notice. They also ended emergency leave pay and suspended the use of company-provided paid time off benefits for employees during the furloughs – a decision that was widely criticized by the public, although the company claims the reason for this was so that employees would be able to take full advantage of government handouts during their furlough.

However, the furloughs are not Hobby Lobby’s first moment under fire. The Oklahoma-based Christian company won a 2014 Supreme Court case – the same year they initially raised their minimum wage – that granted them the right to deny their female employees insurance coverage for contraceptives.

Also, Hobby Lobby settled a federal complaint in 2017 that accused them of purchasing upwards of 5,000 looted ancient Iraqi artifacts, smuggled through the United Arab Emirates and Israel – which is simultaneously strange, exploitative, and highly controversial.

Why does this all matter? While raising their minimum wage to $17 should be regarded as a step in the right direction regarding the overall treatment of employees (and, hopefully, $17 becomes the new standard), Hobby Lobby is not without reason to seek favorable public opinion, especially during a pandemic. Yes, we should be quick to condone the action of increasing minimum wage, but perhaps be a little skeptical when deeming a company “good” or “bad”.

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Business News

RIP office culture: How work from home is destroying the economy

(BUSINESS NEWS) It’s not just your empty office left behind: Work from home is drastically changing cities’ economies in more ways than you think.

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An empty meeting room, unfilled by work from home employees.

It’s been almost six months since the U.S. went into lockdown due to COVID-19 and the CDC’s subsequent safety guidelines were issued – it’s safe to say that it is not business as usual. Everyone from restaurant waitstaff to start-up executives have been affected by the shift to work-from-home. Even as restrictions slowly begin to lift, it seems as though the office workspace – regarded as the vital venue for the U.S. economy – will never truly be the same.

Though economists have been focusing largely on small businesses and start-ups, we are only just beginning to understand the impact that not going back into the white-collar office will have on the economy.

The industries that support white-collar office culture in major cities have become increasingly emaciated. The coffee shops, food trucks, and food delivery companies that catered to the white-collar workforce before, during, and after their workday, are no longer in high demand (Starbucks reported a loss of $2 billion this year, which they attribute to Zoomification). Airlines have also been affected as business travel typically accounts for 60%-70% of all air travel.

Also included are high-end hotels, which accommodate the traveling business class. Pharmacies, florists, and gyms located in business districts have become ghost towns. Office supplies companies, such as Xerox, have suffered. Workwear brands such as J. Crew and Brooks Brothers have filed for bankruptcy, as there is no longer a need to dress for the office.

In Manhattan – arguably the country’s most notorious white-collar business mecca – at least 1,200 restaurants have been permanently lost. It is also is predicted that the one-third of all small businesses will close.

Additionally, the borough is facing twice as many apartment vacancies as this time last year, due to the flight of workers no longer tied to midtown offices. Workers have realized their freedom to seek more affordable and spacious residence outside the city. As companies decentralize from cities and rent prices drop, it isn’t all bad news. There is promise that particular urban white-collar neighborhoods will start to become accessible to the working class once again.

Some companies, like Pinterest and REI, are reporting that their shift to work from home is in fact permanent. The long-term effects of deserted office buildings are yet to make themselves evident. What we do know is that the decline of the white-collar office will force us to reimagine the great American cities – with so much lost due to the coronavirus, what can now be gained?

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Business News

2020 Black Friday shopping may break the mold

(BUSINESS NEWS) Home Depot states their new plan for deals and discounts over two months, in place of a 1-day Black Friday event.

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Men shopping in an empty aisle, Black Friday to come?

Humans change and adapt – that’s just in our nature. Retail stores have struggled to maintain their sales goals for years as more and more people move to ordering online. Online prices still seem to be within customer expectations and often come with free shipping. Additionally, people that may have preferred to shop in an actual brick-and-mortar store have changed their shopping habits dramatically in 2020; it’s hard to social distance and be safe in crowded stores or in small aisles. Black Friday may be next to change.

Amazon and other big box store’s online ordering platforms have simplified getting what you need delivered right to your front door. According to Statista, “Amazon was responsible for 45% of US e-commerce spending in 2019 – a figure which is expected to rise to 47% in 2020.”

Retailers count on the holiday season, specifically Black Friday deals (the day after Thanksgiving), to bring in up to 20% of their annual revenue. It’s hard to just remove that option completely. But considering the times of social distancing, wearing masks in public, and especially avoiding large crowds, the tradition of Black Friday will need to look different this year.

It will also be interesting to see what supply chain disruptions from early 2020 will have the most effect this shopping season. We saw predictions in March that said the United States would see the biggest disruptions in about six months. Black Friday falls right on that timeline.

Home Depot has announced their plans to go ahead and give the deals over a two month span, starting in early November through December (both online and in stores with the possibility of adding some special deals around the actual Black Friday date) to help encourage a more steady stream of shoppers versus so many packing in on the same day.

The home improvement chain has actually seen a great sales year. This is likely due to people working from home and being interested in doing more home projects (and possibly having a bit more time to do them as well). As of May 2020, “The Home Depot®, the world’s largest home improvement retailer, today reported sales of $28.3 billion for the first quarter of fiscal 2020, a 7.1 percent increase from the first quarter of fiscal 2019. Comparable sales for the first quarter of fiscal 2020 were positive 6.4 percent, and comparable sales in the U.S. were positive 7.5 percent.”

Home Depot, along with many other retailers like Walmart, Target, and Best Buy have confirmed that they will be closed on Thanksgiving Day, which may not be new for all of them but has always signaled the kickoff of the holiday shopping season.

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