HONOLULU, Hawaii (HawaiiNewsNow) - A Yelp survey in September found that 9 in every 1,000 businesses in Hawaii have permanently closed — one of the highest rates in the country — as lockdowns imposed earlier this year shattered the local economy.
Months later, many of those that have survived aren’t sure how long they’ll remain afloat.
But amid all the economic pain, experts predict a silver lining. The twists and turns of the pandemic — from shutdowns to strict capacity limits — have forced many small businesses to rethink their strategies, dramatically dial up their online presence and woo customers anew with creative products.
Indeed, over the holidays, local retailers were enjoying something of a moment as they took advantage of “buy local” campaigns and promised customers gifts they couldn’t get anywhere else.
The crucial question, of course: Will that moment last? Here’s the story of why many think it will.
Lyle Fujikawa is one of the creators behind the state’s Buy Hawaii, Give Aloha, a website launched to help local businesses connect with shoppers during the pandemic.
As an economic development specialist with the state, he’s been at the front lines of a transformation underway in Hawaii’s retail space.
He said when the pandemic hit and the lockdowns started, there was a recognition that something needed to be done — and fast — to help Hawaii’s small businesses.
Buy Hawaii, Give Aloha was the result: A one-stop online shop for Hawaii products.
It wasn’t perfect, but Fujikawa said it was an example of what’s possible — and how businesses have adapted in difficult times. The pandemic, he said, has “given some companies an opportunity to leapfrog and realize that they have this tremendous whole world to sell to and they have a pathway to that.”
He added, “Companies have to evolve and continue to innovate.”
The Buy Hawaii website lists a directory of dozens of businesses that make more than 75% of their total product offerings in Hawaii. They include everything from local food products to restaurants to apparel.
A central focus of the program was helping business bolster their e-commerce capabilities.
Michelle Clark, of the Pacific Business Center Program, said getting online was a must in the early days of the pandemic and remains important if a business wants a fighting chance.
“I think if businesses hadn’t thought about getting online before ... that was the first thing that came to their mind when again people couldn’t show up there,” said Clark, whose center provides technical support to businesses. “They realized they have to go online otherwise they’re just sitting there.”
But just launching a website isn’t enough.
Clark and Fujikawa said businesses had to quickly learn how to market their products online.
At the corner of 11th Avenue in the heart of Kaimuki, Ten Tomorrow is a women’s clothier housed in an office space resembling a cozy home. Summer Shiigi, owner and designer, said prior to the pandemic, she had a website, but only about 2% of sales came from e-commerce. Over the next few months, that surged to about 50% — a clear indication of a shift in her customers’ shopping habits during the pandemic.
“We’re definitely putting our effort into constantly doing photoshoots, getting our product quickly and up on the website, scheduling and timing launches, so that people can know what’s upcoming,” Shiigi said.
With a cheerful persona, it’s easy to see why Shiigi values customer service as a key part of her business. But coming to grips with the reality that everything was now online and on social media, where it’s all “so fast-moving and constantly evolving,” she had to think of a new way of reaching her customers.
In August, Shiigi launched Summer Saturday Markets, trunk shows held on Facebook and Instagram. The virtual shows included other locally-owned businesses and featured 30 to 40 products each.
The initiative was so successful she launched a similar one for the holidays.
“It’s just a 100% safe way to stay in touch and still shop, so it’s nice,” Shiigi said. “It feels like I’m with you shopping and offering customer service in that way, and that’s what I love about it.”
Even though Shiigi said nothing can replace the value of the in-person shopping experience, the virtual trunk shows have become an important part of her business that she will likely keep after the pandemic is over.
“I think the pandemic has pushed all business owners to kind of go out of their comfort zone and get more creative than normal, so I definitely want to take lessons that we’ve learned and the tools that we’ve implemented and see ... what we can keep, how we can continue to evolve,” she said.
Lyle Fujikawa, of DBEDT, agreed that the physical storefront can’t be replaced. But he adds that there can be a healthy balance between having an online presence and some kind of brick-and-mortar store.
“It’s not gonna be fighting against each other, you’re not going to cannibalize sales, you’re going to supplement or support the branding and experience and sales,” Fujikawa said. “Brick-and-mortar and then the online can work more efficiently and they’re different kinds of things.”
Another local business that has seen a boost in online sales is Manuhealii, a clothing store featuring distinctive Hawaiian prints. Lori Bayot, sales associate for Manuhealii, said the business has always had a strong digital presence but introduced virtual shopping appointments to extend its reach.
“We give them a tour, we grab the clothes, the newest collection that we have, we’ll show them the different styles. We’ll have one of our girls try on the outfit to give them an idea of what it looks like,” Bayot said.
Bayot added that the store relied on its biggest purchases during large events like the Merrie Monarch Festival, May Day celebrations, graduations and baby luau, so it was difficult when the pandemic canceled everything. Being creative and reaching customers through social media has been a huge help.
“I think our Hawaiian small business, we’re remarkable. Not only Manuhealii, but all the Hawaiian small businesses out there. We have shined. You know, these big retailers are shutting down. We’re able to be resilient and get through it while still grounding us as a family-owned business,” Bayot said.
The cancellation of large events also dealt a blow to small business vendors that relied on craft fairs and festivals to sell their products.
About 25 years ago, the non-profit Waianae Economic Development Council developed Made on the Waianae Coast, a marketplace where vendors — from artisans to food to entertainers — could sell their work. One of the primary ways of promoting their products was through festivals.
But when COVID-19 hit, Made on the Waianae Coast had to solve the very complex problem of how to bring an event of such a large scale to people’s homes. A team of volunteers got started on the problem.
They launched three online events, including Christmas festivals — complete with pre-taped entertainment and livestreamed vendors selling products on Facebook Live.
“The pandemic really made us have to turn ourselves inside out,” said Carol Pelekai, of Made on the Waianae Coast. “We came up with the idea of the online marketplace. We had about three months and the excitement was great, but the reality was like, we had to stumble and fall and get up and try to figure out.”
The creators of the Made on the Waianae Coast said they don’t anticipate returning to in-person events until at least the second half of 2021, but there are unforeseen benefits to doing them online anyway, including being able to use resources and money in different ways.
Additionally, businesses are able to promote products all around the world.
“You’re not in the situation where you’re renting tents or worrying about sound systems or security or parking, some of the other costs that are associated with in-person types of events,” said Joseph Lapilio, president of the Waianae Economic Development Council.
Overall, Lapilio said the pandemic was the “good kick in the pants” that they needed to finally get their operations online and move forward with the times.
“I think the biggest thing that’s probably happening and might be more immediate is people are a little aware of the fragility of business and how, on a dime, events can turn on you and the need for you to be entrepreneurial,” he said. “The need for you to be creative and adapt. I think that’s probably one of the bigger changes that are happening for a lot of business people.”
Even beyond using social media and technology, some business owners have tested the waters with new ways of shopping at a time when customers couldn’t come into stores.
When malls shut down and their tenants took business online following stay-at-home orders, that also meant dressing rooms were off limits.
That was a problem that Allison Song — owner and designer of Allison Izu, a women’s clothing store in Ala Moana Center — had to figure out when the mall first closed.
“Clothing is just a hard thing to sell online just because if you’re new to our brand, you don’t know anything about it,” Song said. “You don’t know what a size small looks like, or fits like, so that definitely is the hardest part.”
To fix that issue, Song came up with “Izu/Tri Before You Buy,” an option that allows customers to try on up to six items (at a value of up to $649) that are shipped to their home for a deposit of $50.
That deposit will be applied to the items the customer decides to keep. And if the customer decides to return anything, Allison Izu will send a free return shipping label.
Song said Izu/Tri has been successful so far, even after malls have reopened. Many people are still hesitant to go to the mall, she said, so it’s an easy and safe way to shop.
“It’s definitely something we’re going to continue,” she said. “That is the future of retail, too. We’re getting busier. A lot of people aren’t able to make it to the mall, sometimes the whole online shopping, you’re putting like five things in your cart and it’s like $700.”
On a recent December day, Ala Moana Center is quieter than usual during what would typically be a busy holiday shopping season.
The thin crowds are a reminder of just how hard hit retail has been amid the pandemic. Closed storefronts are another one.
“It’s not easy, the operating environment is constrained and we have a lot of employees at the shopping center who are doing the very best they can to manage through difficult situations and really, that’s been why our focus has been on the health and safety of the community,” said Jake Wilson, Ala Moana Center’s general manager.
Allison Song knows the stakes and is doing everything she can do to keep customers coming back, in person or online.
She’s even been hopping onto the store’s Instagram account with daily Stories, posting style tutorial videos that show viewers how to wear different outfits.
She admits that for herself and other entrepreneurs, it took a pandemic to step outside her comfort zone and try something completely out of her element, but embracing change is essential to growth.
“We’re kind of pushed to the end point or like put under pressure, that’s kind of when the ideas and the creativity come up,” Song said.
“It really gave us an opportunity to reassess what’s working, what’s not working, where can we focus more, and where can we innovate? And that’s always something that excites me as an entrepreneur.”
Wilson, of Ala Moana Center, said that he’s noticed that businesses in the mall are focusing on what they can control — by figuring out new and innovative ways to manage through this.
“All businesses, all industries are adapting and I believe in the entrepreneurial spirit, I believe collectively what we can all achieve together, so I just think it’s going to be an evolution and excited to see and be a part of the future,” he said.
For Song, there’s something special about doing business in Hawaii that she said has saved her during the last few difficult months.
“We’re so lucky to be in Hawaii because our community really supports us, and being a small business, I feel like that’s why we’ve been able to survive,” Song said. “They’ve really made an effort to support local and small business, that’s a really amazing thing that is attributed to the Hawaii community.”
Others in the industry agree that, in many ways, the pandemic has helped shine a spotlight on local businesses because Hawaii is such an inclusive place, where people come together to lift each other up.
“You can see that people are, they care a lot, and Hawaii is always about community and really wanting to contribute back to the economy,” said Lyle Fujikawa, of DBEDT.
“I think people realize that and they’re really doing their best to help Hawaii’s economy to strengthen and hopefully keep going, and I think this is a model for going forward. It’s never going to go back.”
Fujikawa said that in many ways, the pandemic has also reshaped and given new meaning to buying local.
“It’s been a tremendous crisis, and we’ve had tragedy, and we’ve had a lot of difficulties and challenges, but out of that, some companies are really succeeding, some are thriving, and hopefully we can create new ones that will make more success for everyone,” he said.