Bricks & Clicks – An Innovative Approach to Growing Your Own

The Bricks & Clicks initiative was an innovative, multi-year, multi-phased, multi-jurisdictional approach to the economic development principle of growing your own. The initiative was a collaboration between the City of Harrisonburg Economic Development, Rockingham County Economic Development, Harrisonburg Downtown Renaissance (HDR), Shenandoah Valley Small Business Development (SBDC) and James Madison University (JMU).

INNOVATIVENESS Bricks & Clicks (B&C) began with the idea of utilizing the economic gardening model to assist businesses. Using the guiding concept of economic gardening - identifying and targeting new markets - Harrisonburg Economic Development and Harrisonburg Downtown Renaissance began to flesh out a multi-phased approach to growing existing businesses. How can we assist retail businesses that are established and have enjoyed some level of success and longevity? How can we help them grow their business that may have plateaued? The bottom line - how can we help them increase sales? To develop a path forward for the region, a partnership was established between the city, county, HDR, SBDC and JMU. Each partner would bring a unique perspective to answering our questions. The team outlined a four-phase approach for B&C:

Phase 1 – Undertake a regional, retail market analysis, including a customer origination survey Phase 2 – Conduct a seminar on how to grow your retail business Phase 3 – Provide expert consultations in the areas of websites, social media and in-store improvements. Phase 4 – Provide mini-grants for businesses to implement the ideas recommended by the consultants.

Phase 1 The team first needed to understand the existing retail conditions of the Harrisonburg Metropolitan Statistical Area (City of Harrisonburg and Rockingham County). To achieve this, the team received a Virginia DHCD BEE planning grant in 2017 for $15,000 and matched those funds with $7,000. With the funding, the team hired a retail consultant to undertake a regional retail market analysis. In addition, the team conducted customer location surveys in stores across the MSA to find out where shoppers were coming from and how big the retail reach extended out from Harrisonburg. The final report was presented at a community breakfast hosted at our local historic theater. The report can be found at: http://harrisonburgdevelopment.com/regional-retail- market-analysis/

Phase 2 With Phase 1 complete and the relevant retail market data collected, it was time to execute direct assistance to businesses across the MSA. In early 2018, the team again received a DHCD BEE grant. This award was a $40,000 implementation grant. Additionally, the team contributed $7,000 in cash and more than $8,310 in-kind support (design and printing expenses, facilities, JMU business librarian resources and time, JMU intern, coordination, and and outreach activities). The business community also contributed with a local bed and breakfast providing lodging for the featured speaker of Phase 2. The speaker we hosted was Jon Schallert, a nationally renowned retail consultant. Mr. Schallert is an expert in how to make your retail business a destination. Cost to attend the workshop was $50 with all proceeds going to Phase 4). One hundred forty-seven people from across the Shenandoah Valley attended the full-day workshop, which was held on JMU’s campus. Attendees were challenged to think critically about what makes their business unique and how can they make their retail business a destination in the age of Amazon. The feedback was wholly and overwhelmingly positive. Attendees were re-energized with ideas to improve their business - both online and in-store. To encourage attendance and commitment to the B&C initiative, all businesses that attended the workshop were eligible to apply for free, expert consultations (Phase 3).

Phase 3 Phase 3 of B&C was the offering of expert consultations, paid for by the team, to improve the physical appearance of a business (the bricks) or the online presence of a business (the clicks). To compete in today’s retail market, the team encouraged businesses to create or improve their online and social media presence in addition to having their physical location. The team entered into contracts with five vendors to provide consultations on website development and improvement, e-commerce, digital marketing, social media, and store product layout and window dressing. The team received 27 applications and awarded the consultations to 24 city and county businesses.

Phase 4 The 24 businesses that received consultations were then eligible to apply for a mini-grant to implement some, or all, of the recommendations made by the consultants. In mid-2018, the team received 21 grant applications and awarded 10 grants, ranging from $1,200 to $4,900, to retail and restaurant businesses (and even one children’s discovery center) in Harrisonburg and Rockingham County. Overall, the team awarded $36,700 in project grants, leveraging a total investment of $70,000 by the participating businesses.

The team tracked baseline, interim and final data for the 10 grant recipients. That data will be outlined in the Measured Objective section. In summary, the B&C was a great success. To quote one of the program participants, “I’m really excited to let you know that we are now 3.4% up for the YEAR! And although that seems like a small percent up, the swing is quite amazing as we were trending from 10-18% down in sales. Interestingly, we started seeing the increase in sales coinciding when we started putting our grant plan into place. Coincidence? Perhaps, but I really don’t think so. I really believe it was this grant that got the ship turning in the right direction, and of course, our goal will be to continue along this path. October alone was nearly 20% up over LY! Again, thank you all SO much for investing in existing businesses! Helping them to do things to stay in business is great for the Harrisonburg economy, and I think is as important, if not more so, than only getting new ones started. Very, very wise and I really wish other towns would use this intelligent strategy.”

TRANSFERABILITY As the quote above attests, other communities could certainly benefit from the Bricks & Clicks model, and our program participants would surely recommend other communities take on such an initiative to help existing businesses. The program was such a success because it helped what is often an underserved group: existing, fairly successful businesses in the retail sector. These businesses are typically the core of a downtown. Downtowns themselves are so important because entire localities are often judged by the appearance and quality of their downtowns. It can make or break large economic development deals if a negative perception is projected by a local downtown. We would be happy to work with any other community that is interested in launching a B&C type program. With partnerships, and some grant funds, any locality can create a similar initiative.

COMMUNITY COMMITMENT AND LEVERAGE The team truly represented a community commitment – bringing together two local economic development departments, non-profits and academia. Some partners provided cash to the program, some provided in-kind resources, while all providing a significant amount of time and dedication. And of course, the commonwealth was the lead funder with two BEE grants.

MEASURED OBJECTIVES The B&C initiative was primarily focused on assisting businesses grow their sales and improve their in-store and online traffic. Unlike many economic development initiatives, new job creation was less important. However, by assisting existing business, job retention was another primary benefit of the initiative.

To track the success of the program, the team required all grant recipients to provide a baseline data report, an interim data report and a final data report. The team sought to track quarter-over- quarter success and year-over-year success. Grants were provided in June 2018. Baseline reports were received in June 2018 and the interim reports were received in December 2018. The Bricks and Clicks program finally closed out in June 2019 with the grant recipients’ final data reports.

Job data for the 10 grant recipients: 68 full and part time jobs were retained Full time jobs increased by 1 to 27 Part time jobs increased by 10 to 63 Volunteer labor increased from 22 to 75 (2 non-profits participated)

The team was most excited about the increases in sales and customer traffic numbers, as reflected in the charts below.

Base Final CY'17 Sales CY'18 Sales Q3'17 Sales Q3'18 Sales 3,284,084 3,834,229 797,710 866,802

Q4'17 Sales Q4'18 Sales Q1'18 Sales Q1'19 Sales 1,105,511 1,261,987 704,152 748,750

Year-over-year sales were up 16.8% and quarter-over-quarter sales were up an average of 10.4%!

The team also tracked in store and online traffic for each business, and again saw great success!

Base Final % of Sales From Online Store 5/1/18 % of Sales From Online Store 6/1/19 9 22

Base Final Average # of Monthly Visitors to Store Average # of Monthly Visitors to 5/1/18 Store 6/1/19

1,264 1,630

Base Final Average # of Monthly Visitors to Website Average # of Monthly Visitors to Website 5/1/18 6/1/19 1,920 2,076

SECONDARY BENEFITS Several secondary benefits were realized from the Bricks and Clicks initiative. First and foremost, a framework was created for a regional collaboration between governments, universities and non-profits. The team learned how best to plan and execute as a cohesive unit. Members of the team have continued to work together on various projects, ranging from a marketing workshop series that arose out of the business needs from Bricks and Clicks to local government cooperation in attracting international commerce.

Another secondary benefit was that the participating businesses felt seen and appreciated. These businesses can sometimes be thought of as the quiet B+ student who may not attract much attention because they go about their business without the perceived need of assistance. Often in economic development, we get caught up in landing the big deal or helping people start a business. Bricks and Clicks showed our existing retail businesses that they are incredibly valued, are vital to our community, and we do want to serve them.

Finally, the participating businesses are almost all long-standing contributors to the community. They give their time and money back to the communities they are in, whether that’s Harrisonburg’s downtown or a rural part of Rockingham County. The success of these businesses strengthens the community and the overall retail sector.