Can Neighborhood Goods’ platform help brands hurt by the pandemic?

Discussion
Photo: Neighborhood Goods
Apr 17, 2020
Matthew Stern

Before the coronavirus pandemic, physical showcases featuring revolving lineups of indie brands that might have difficulty finding shelf space on their own were gaining popularity. Now, as many indie brands are faced with uncertainty and potential extinction, one retail showcase wants to help some weather the storm.

Neighborhood Goods is launching a platform called The Commons, meant to help indie brands that have experienced disruption from the coronavirus pandemic make sales in the aftermath, as described on its website.

The platform is open to brands — local and national — that have been affected through the cancellation of wholesale relationships or have experienced other financial hardships. Neighborhood Goods will give selected brands shelf space in its physical locations, forgoing its usual fees and commissions on sales. Neighborhood Goods has three physical locations in Austin, TX, Plano, TX, and New York City. The retailer also plans to help restaurateurs, musicians and artists in different ways through The Commons.

The website mentions that The Commons may go live online first, then launch physically as state and federal laws allow for the reopening of non-essential retailers.

Were The Commons to open online first, this would give participating indie brands a new channel for e-commerce sales, which could be good news if a recent study published on PYMNTS is indicative of a trend. The study reports a dramatic jump in online fashion sales over the past two weeks after COVID-19 caused sales to crater at the end of March.

Like most forms of physical retail, the showcase model has been put on pause as social distancing to prevent the spread of coronavirus has demanded that people stay away from public places.

Pioneers in the field of the retail showcase like B8ta have not fared well in the past month. That retailer, which is owned in part by Macy’s, announced a furlough of retail employees and laid off a large part of its corporate staff, according to Women’s Wear Daily.

DISCUSSION QUESTIONS: What do you think of Neighborhood Goods’ approach to helping brands affected by COVID-19? What other creative partnerships might help indie brands survive the pandemic?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Neighborhood Goods = good neighbor."
"This can help the brands and also give Neighborhood Goods great data for its physical locations to leverage when stores can re-open."
"The best solution for brands (indie or otherwise) in the long run is to foster a direct relationship with their consumers and reduce their reliance on wholesale channels..."

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10 Comments on "Can Neighborhood Goods’ platform help brands hurt by the pandemic?"


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Ben Ball
BrainTrust

While the pandemic has evidently inspired Neighborhood Goods — this isn’t a new concept as Matthew points out. And the drop in fashion spending is more due to the overall pullback in discretionary spending, a natural consumer reaction to uncertainty, than to the lack of availability. Online fashion “sales” are popping up multiple times a day in inboxes across the country. If this concept takes off, and I hope it does, it will be due to a renewed interest in supporting local and small businesses. An outcome of this event that I hope we do see. Not because it solves a current lack of availability.

Suresh Chaganti
BrainTrust
Suresh Chaganti
Co-Founder and Executive Partner, VectorScient
5 months 11 days ago

Ironically, the concept of helping brands impacted by COVID-19 itself getting impacted. The reality is, there is no dearth of showcasing platforms – online marketplaces, YouTube, Instagram, etc. Limitations of physical space isn’t a great barrier either. This appears to be a solution in search of a problem.

Rob Gallo
BrainTrust

I applaud companies that are doing their best to help out. COVID-19 has presented all sorts of challenges and has shown a spotlight on folks that are thinking differently. This is a fulcrum moment when people and companies can deepen connections, relationships and loyalty. Not everybody can turn their manufacturing prowess to making masks. Neighborhood Goods does a great job of showcasing brands, so they’ve leveraged that to help out brands that are struggling now. This can help the brands and also give Neighborhood Goods great data for its physical locations to leverage when stores can re-open.

Dave Wendland
BrainTrust

It is my prediction that creative partnerships will be key in the aftermath of this unprecedented time in retail. We are already seeing incredible ingenuity — Hy-Vee’s announcement of footwear pickup in its stores in partnership with DSW is one such example. I also applaud H-E-B’s connection it has made with local restaurants to serve up their prepared meals through their store locations.

For Neighborhood Goods, I see this platform as a terrific way to connect consumers with brands and displaced brands with new market opportunities. We may also see local products aligning more closely with retailers to support direct-to-consumer, curbside pick-up, etc. This shifting landscape requires brands and retailers to remain agile, inventive, and open to new ideas.

Jeff Sward
BrainTrust

Neighborhood Goods = good neighbor.

Richard Hernandez
BrainTrust

As I mentioned yesterday, a lot of these indie businesses are getting into the fashionable mask business. That along with an increase in online sales are a good jumping off point to help keep these businesses afloat during this time of uncertainty.

Lee Peterson
BrainTrust

The concept (which includes Showfields in NYC) could help indies, but there’s two factors that belie that effort. 1) they’re stores and 2) there’s only 2-3 of them. Both of those are pretty huge. Having said that, if the concept plays out (which is still unproven) and several players open in key shopping areas, it could make a difference.

Ryan Grogman
BrainTrust

As Matthew noted in the opening of the discussion, the rise in these retail “food halls” has been gaining in popularity as a way to showcase local, independent businesses. And like all retail businesses outside of grocery, they are suffering during the current pandemic. So even though this isn’t a terribly unique platform they’ve launched, they certainly should be applauded for waiving their fees to help get these local businesses’ products on shelves. In addition, per their website, they are donating up to 10% of their sales to the COVID-19 response.

Every little bit helps up and down the supply chain, and it’s nice to see this organization doing their part. In addition, the rise in community spirit which the quarantining seems to be brining out in local neighborhoods will only serve to reinforce the shop local, buy local philosophy.

Martin Mehalchin
BrainTrust

Every little bit helps during a crisis like this and the Neighborhood Goods initiative certainly seems inspired by the right motivations. However, the best solution for brands (indie or otherwise) in the long run is to foster a direct relationship with their consumers and reduce their reliance on wholesale channels altogether. One idea for the Shopifys and the Etsys of the world would be to create virtual spaces to shop local: an online showroom that merchandises indie brands specific to the local areas of different consumers.

Ananda Chakravarty
BrainTrust

The importance of locality will begin to grow as more and more brands and retailers start driving towards hyper-local retailing. Geographic location automatically brings together many folks with similarities from clothing styles to art. It’s great to see this happening with neighborhood goods, despite the fact that we are in a crisis. They were engaging the local community long before Covid-19.

wpDiscuz
Braintrust
"Neighborhood Goods = good neighbor."
"This can help the brands and also give Neighborhood Goods great data for its physical locations to leverage when stores can re-open."
"The best solution for brands (indie or otherwise) in the long run is to foster a direct relationship with their consumers and reduce their reliance on wholesale channels..."

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