Purdue consumer science researcher: Downtown small businesses create vibrant large communities

Rodney Runyan, Purdue University professor of retailing and associate department head in consumer sciences, checks out Rose Market in downtown Lafayette. From his decades of research, Runyan said shops like Rose Market help fuel the downtown brand of small cities like Lafayette. A vibrant downtown usually means a vibrant community.Tim Brouk

Written by: Tim Brouk, tbrouk@purdue.edu

Locally owned downtown businesses do much more than just sell goods and services to customers — they sell the city or town, according to Professor Rodney Runyan. From Oklahoma to Michigan, Texas to Indiana, the Purdue University associate department head for the Division of Consumer Science in the College of Health and Human Sciences has researched for decades how small businesses affect communities.

“If the downtown is vibrant, if the downtown is walkable, if the downtown is healthy, you get a feeling of the whole community being that way,” said Runyan, who works within the White Lodging-J.W. Marriott Jr. School of Hospitality and Tourism Management.

Runyan has studied small business strategy, entrepreneurship and community branding throughout his career. He has worked boots-on-the-ground with communities. For example, small businesses in Ludington, Michigan, were rattled when a Walmart was announced to be built there. Through research of local consumers’ behaviors and development of an economic impact study, he found the retail giant and the small businesses in the Lake Michigan town of about 8,000 can coexist if the local businesses adapt and make some changes.

The Michigan businessowners had to figure what they could offer that Walmart couldn’t. This consisted of expertise, customer service and experience along with inventory that the big box doesn’t carry or specialize in.

“You have to do something different,” Runyan said. “You have to have some type of differential knowledge. For example, an Ace Hardware would have 15 people ready to help me. You need to think — why do people come to your store?”

Ripple effect

Runyan believes a vibrant downtown business district is crucial in luring new hires and even new industries.

“When you bring a new person in for any interview, where do you take them? Downtown,” Runyan said. “If you don’t show them the downtown, there’s a reason why because the downtown gives someone a very quick flavor of the community as a whole.”

Communities can build their brand around their downtown. Do the arts play a strong role? Is the dining scene worth shouting about? Is it focused more on tourists, college students or the city’s full-time residents?

“One of the most important drivers of business is the downtown brand,” Runyan explained. “It’s not an individual thing. It has to come together as a group. It needs to be driven from a downtown development authority/Main Street organization from a leadership perspective. These are examples of leadership groups who can drive cohesive brand development.”

Pandemic survival

Runyan is part of a research study expected to be published in the fall that explores how fear during the COVID-19 pandemic affected consumer behavior. In 2020, the pandemic turned everything upside down. Small businesses in the United States were pummeled in the pandemic’s first year. About 100,000 closed, according to Yelp data.

Runyan and his colleagues concentrated on the impact of fear on consumers’ purchase behaviors during the pandemic. Did customers continue to shop in-store, or did they switch to/increase their reliance on curbside pickup and/or delivery? One interesting outcome of their study was consumer reactions to business-owner behaviors. The data show consumers were more likely to purchase from retailers who took clear steps to ensure consumer safety, regardless of mode (i.e., in-store, pickup or delivery). It seemed overt efforts by retailers to mitigate COVID-19 dangers was well-received by consumers.

“What was the message that you were sending to potential customers in terms of how you were making it safe for them?” Runyan asked. “You didn’t want the customers having to ask, ‘What’s your procedure?’ It should be ‘Here’s what we do.’ First thing: ‘Here’s what we do.’ It was certainly a lesson for anything in the future.”

Two years later, the fear factor is still there for many, Runyan said. Small businesses must still work hard and practice and display safety to get those cautious customers back through the doors.

From websites to e-commerce to drone delivery

Being early adapters of technology is a small-business survival tool that has stayed true through the decades. In the late 1990s, Runyan remembered having to convince community business groups to build websites and city governments to add local businesses on their sites. Today, almost every business in the U.S. has some web presence.

Twenty-five years later, Runyan was tapped by Purdue as a consultant for the University’s work on the next big technology step for small businesses — drone delivery. His knowledge on retail and community has come in handy with the team of mostly Purdue engineers. A grant for research and development is expected to be written by the end of October. Runyan sees drone delivery as a possible necessity for small businesses in years to come.

“The idea of drone delivery, to me, is the same as websites, as e-commerce,” Runyan said. “It’s going to happen eventually. You can get on board or not get on board.”

Hoosier business check

Runyan’s Purdue career is not quite a year old. He is still gathering insights on the plight of Hoosier small businesses. He recently visited Rose Market in downtown Lafayette and liked what he saw. Despite the pandemic still lingering and inflation causing havoc with consumers’ wallets, the downtowns of small cities and towns of some size around Indiana seem to be coming out of the pandemic well. However, there are some small towns with more vacant buildings than ones that are occupied by businesses, Runyan said.

“Most of them — in my lifetime — won’t recover,” he continued.

Rose Market features items that can’t be found at most chain businesses, such as vegan and gluten-free doughnuts and craft nonalcoholic beer. This falls into Runyan’s small business survival guide. The shop’s choice to offer items with a local spin that aren’t as prevalent in big box stores helps make it an attractive piece of the downtown retail scene, which reflects well upon the entire downtown and the whole community.

“(Shops like this one) keep people coming downtown. It keeps them spending money here and at other businesses,” Runyan said. “It keeps the doors of the businesses downtown open.”