Yelp Becomes Barometer For Health And Wealth Of Local Business Economy

Permanent closures for retail businesses skyrocketed in the last month. Of the 26,119 closed retail businesses in July — 2,454 are permanent — representing 48% of closed retail businesses on Yelp, a 29% increase in permanent retail closures in the last month.

The beauty and fitness industries followed a similar trend. 

Yelp's Economic Average data has become somewhat of an accurate barometer to check the status of local businesses, as well as the health of the economy during the pandemic. It's latest report, released Wednesday, shows a correlation between interest in gyms, restaurants, bars and nightlife, and a spike in COVID-19 cases across hot-spot states.

The data recognizes longer-term trends and business closures, highlighting economic instability and stability, as well as geographic trends for a variety of businesses, such as nightlife, and beauty and fitness.

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Consumers are getting back to pre-pandemic activities, per the report, which also notes a sustained interest in supporting Black-owned businesses.

From May 25 to July 10, there have been more than 2,500,000 searches for Black-owned businesses on Yelp, up from approximately 35,000 during the same time period last year.

While searches for Black-owned restaurants have remained particularly popular, search terms have become more specific. Searches for Black-owned boutiques rose by 331%, compared with the same time last year, bakeries and ice cream shops rose by 56%, doctors rose by 183%, and coffee shops by 161%. Bookstores have seen a high increase in consumer interest, with searches up 1,437% year-over-year, as people look to find resources from Black authors.

Although state-by-state regulations shift weekly, Yelp’s data shows a positive shift that consumer interest will be there when businesses can reopen, whether in limited or full capacities, Tom Foran, SVP of multi-location and national business at Yelp, wrote in an email to Search & Performance Marketing Insider.

“The fact consumer interest is reaching pre-pandemic levels already is what truly shocked me the most,” Foran wrote. “While, we did expect a bounce back, it wasn’t always so certain it was going to happen this quickly. This is good news for business owners.”
Foran also explained how the data identifies a changing economy, one starting down a long, yet challenging road. Consumer interest and willingness to contribute to the economy will become a major factor in easing some of the bumps faced.

Still, for the data it’s clear, getting through the pandemic won’t be easy, especially for small businesses.

Small businesses need to diversify their revenue streams, whether by establishing a takeout and delivery service, or something more complex, such as shifting to virtual offerings. It’s important to find unique ways to engage with consumers that raise margins.

“Perhaps you can start offering DIY cocktail kits if you are a bar and have had to recently shut back down. Or, maybe you can offer virtual consultations if you are a repairman, to minimize consumer contact,” he said. “These pivots will show your consumers you are doing what it takes and by communicating these offerings, they’ll know how to show up to support you.”

The pandemic requires businesses to personalize the experience with consumers.

State openings and closures are all over the map. As some states open, others close to stop the spread of the virus. For local mom-and-pop shops this isn’t as much of a challenge, since they may only have one location and one audience they need to reach. It poses a much bigger challenge for national brands with thousands of locations, each experiencing its own set of guidelines and restrictions.

Foran suggests marketers should:

  • Communicate regularly: With things in flux, it’s essential for brands and business owners to communicate with consumers about new hours of operation, new guidelines, and more. Keep ads informative, targeting customers with new safety measures the business takes, how it plans to combat COVID-19 and what customers can expect when they interact with the business.

  • Think local:  National brands need to think about scaling their national strategies locally. It might mean running countless executions at once. Target ads based on current regulations, maybe in some states the business runs a promotion for drive-thru deals, while in others it offers in-store retail promotions. Keeping an inventory of interchangeable ads with different messages allows brands to take a national approach with local implementation.

  • Be nimble:  With COVID-19 cases going up in some regions and down in others, the rules are constantly evolving. It’s incredibly important for brands to be nimble in their advertising. What might be appropriate and time sensitive one week, can quickly seem out of touch and disconnected the next. Constantly monitor the situation and leverage platforms that can help keep consumers informed of specific location regulations, hours, offerings, such as curbside pickup and virtual services, as well as health-and-safety measures.

 

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