May 13, 2020
by Jean Spencer, Managing Editor at Zenefits
This story is part of the Zenefits Business Unusual series. Each week, we share real stories from small businesses and how they are adapting to a new world of work.
Not all businesses are shuttering during the COVID-19 crisis. This Fort Collins-based teahouse is one example of a company that’s using pandemic-related challenges to drive innovation and growth.
Happy Lucky’s Teahouse is a 10-year-old teahouse that once operated 2 Main Street brick-and-mortar tea shops, as well as sold Colorado’s largest supply of loose leaf teas — both wholesale and direct to customers.
“WE HAD TO CHANGE OUR ENTIRE BUSINESS MODEL.”
Deemed an “essential business,” the shop was permitted to stay open with marked public restrictions when the coronavirus took hold. But owners Kari and George Grossman also moved swiftly to adapt to the business’s core operations and marketing strategies to carry forward in a post-pandemic paradigm.
The owners of Happy Lucky’s Teahouse thought quickly to continue operations as the COVID-19 pandemic brought walk-in business to a grinding halt. Image courtesy via Facebook.
“We had to change our entire business model,” George Grossman said in a Zoom interview. Watch the full 8-minute video here to learn about the operational and marketing changes the Grossman’s have made to weather this storm with their own word, including:
- Reducing staff and overhead costs
- Encouraging online ordering, store pick ups, and delivery
- Galvanizing marketing programs that focus on sharing their struggle, and finding positive impacts of the coronavirus
Operationally, the company first closed one of their two community tea shops. They put a damper on all in-person community gatherings. They laid off some employees. And in the end, they found ways to cut expenses by more than 50% of original operating costs. Hard decisions, but necessary to keep the business afloat.
While sales plummeted by 50% — costs were curbed more.
Then, they introduced new marketing efforts.
Online community events, digital referral programs, and leveraging email marketing campaigns to share promotions were all launched as either net-new programs or revitalized efforts.
EARLY MARKETING SUCCESSES LED TO LARGER ONES, AND, RECENTLY, AN EMAIL MARKETING BLAST RESULTED IN THE BUSINESS’S SINGLE LARGEST ONLINE SALES VOLUME DAY — EVER.
Early marketing successes led to larger ones, and, recently, an email marketing blast resulted in the business’s single largest online sales volume day — ever.
“Yesterday’s email went out at 7:30am and by day’s end we had our biggest day of the pandemic, and our biggest day ever online,” Kari Grossman said. “Beating Christmas sales volume!”
That could be because many consumers are increasing their online information consumption. According to Statista, an online statistics publisher, the average daily in-home data usage in the United States has increased significantly amid the coronavirus outbreak. Compared to the same time in March 2019 the daily average in-home data usage has increased by 38% to 16.6 gigabytes, up from 12 gigabytes in March 2019.
Happy Lucky’s Teahouse started a YouTube channel to bring their in-house tea tasting experience to customers virtually. Image courtesy via YouTube.
But even without the statistics to validate their efforts, the Grossmans continued to look for ways to innovate authentically and bring their tea community both online, and ultimately into sales. For example, Kari says their sales approach has always been experiential and sensory.
“I HAD NO IDEA THAT YOUTUBE WOULD BE SUCH A GOOD TEA SELLING TOOL! THE RESPONSE HAS BEEN AMAZING.”
“When people come in they can smell the tea, taste the tea, discuss the tea, and that’s what sells the tea,” she said.
So they started a YouTube channel to bring their in-house tea tasting experience to customers virtually.
“I had no idea that YouTube would be such a good tea selling tool! The response has been amazing.”
If Happy Lucky’s Teahouse can continue operating with greater revenue than costs, they will pull out of this economic struggle intact, and may have an even stronger model with which to drive forward.
While most businesses could never have predicted a pandemic, those that are able to evolve models, keep cash flow, and adapt will have a better chance of survival.