Finding Growth
Even in uncertain times, opportunity exists. Small businesses that focus on relationships, community, and customer experience are finding ways to stand out—and grow.
For years, the narrative has been that big-box retailers and e-commerce would dominate—and that small, independent businesses would struggle to compete. But that hasn’t happened. In fact, many Main Street businesses are thriving by doing what larger competitors can’t: offering expertise, personal service, and meaningful in-person experiences.
I talked to Andrew Stern, the CEO of Quilt Software, a fast-growing technology company serving over 20,000 independent specialty retailers, about why small businesses continue to attract customers, how they’re using technology without losing their edge, and what it takes to stand out in today’s retail landscape.
Rieva Lesonsky: With so much attention on e-commerce and big-box retail, what are small businesses doing right that continues to draw customers in?
Andrew Stern: I’d like to first reflect on the premise of your question: Despite the rise of big-box stores in the 80s, and e-commerce in the 90s and early 2000s, Main Street retail has remained remarkably resilient. We track the number of stores in our market (specialty retail) pretty closely, and we’ve seen a consistent—and slightly growing—number of stores for the last two decades, at least.
The reason for that? Main Street merchants provide a retail experience that can’t be replicated online or by the big players. You go to your local shop when you want to talk to someone—an actual expert—about your purchase. You talk to the local music store owner about what instrument is right for your daughter. You want to touch, feel, and try things on—like seeing how jewelry looks on your hand, or how a frame looks around your art. And you want an experience. In fact, I’ve seen studies from both LEK and PwC in the last year showing that 60–65% of Gen-Z shoppers actually prefer buying things in-store compared to online.
That’s always been true of the kind of Main Street specialty retail we’re talking about—whether that’s taking your dog to pick out a toy at the local pet store or walking through a fabric store to get inspired for your next craft project.
Lesonsky: Research shows consumers still value personal service and expert guidance. Why does that matter even more today?
Stern: Consumers have always valued personal service and expert guidance—it’s the reason small independent retailers have been so resilient through changes in the broader retail landscape.
What’s changing today is the rise of AI and the attempt to create “synthetic” versions of this experience. While AI can be a great tool and time-saver, there are many areas where consumers don’t (and shouldn’t) trust it because we don’t know what incentives are driving the algorithm. Am I being recommended this product because it’s a good fit for me, or because my results are being sponsored or shaped by large corporations?
What consumers crave is authenticity—and that’s what small local retailers provide. The staff at your local bookstore and the elderly woman at the small yarn shop work there because they have a genuine passion for what they do. When you talk to them about your next beach read or knitting project, you know that you are leaning on a real human being who is there to help you.
Lesonsky: How do small businesses strengthen their role in local communities—and why is that becoming a competitive advantage?
Stern: Main Street retailers play a huge role in their local communities. A customer of ours, a small Italian grocer called Labriola’s Market, is literally an institution in Pittsburgh, from sponsoring the local Little League to providing fresh local food to the community. We talked to people in the community who said they would not have been able to put a meal on the table during tough times without help from Labriola’s.
More broadly, we all know that small independent retailers make our communities more vibrant, more walkable, and more interesting to live in. Nobody wants to live in a town that is all bank branches and GAP stores. The quirky local shops on Main Street give our cities color and charm. We say these merchants are “the fabric of our communities,” and I think that’s really true.
Lesonsky: You’ve said small businesses win by narrowing their focus. What does that look like in practice?
Stern: It’s not about limiting your business; it’s about getting clear on where you’re genuinely strong. The retailers that stand out tend to have a focused point of view. They’re known for something specific, whether that’s a category or a level of expertise you can’t easily find elsewhere. When you walk in, it feels cohesive. The products make sense together, and the staff isn’t guessing—they know what they’re talking about because they’re the experts.
That kind of focus simplifies everything else behind the scenes. Inevitably, sourcing products becomes more intentional, training becomes more meaningful, and you spend less time trying to cover gaps that don’t really matter. From there, the role of technology is to reinforce what’s working. It helps you see patterns in what customers come back for and where your efforts actually pay off. This allows you to lean in further, instead of spreading yourself thin.
Lesonsky: How are small businesses creating experiences that go beyond just selling a product or service?
Stern: The difference we see is that small businesses are helping customers make better decisions, not just complete a purchase. There’s a level of attention and context that changes the interaction. Instead of pushing products, they’re asking questions, offering guidance, and making the customer feel more certain about what they’re choosing. That shifts the value. You’re not just buying something; you’re getting insight that’s tailored to you.
You can see it in how these businesses show up daily and invest in their communities. One example is a local fabric and sewing shop that organized a “Quilting Cruise”—complete with fabric and sewing machines on board—so their customers could go on a cruise vacation with others who shared their passion for quilting. This was a unique and creative idea that brought customers together around a shared interest in a way that goes far beyond a typical retail experience. That kind of effort reflects a deeper understanding of the customer, what they care about, how they spend their time, what keeps them engaged, and ultimately, what keeps them coming back beyond just the product itself.
Lesonsky: Where does AI fit into this? How can small businesses use it without losing the personal touch that sets them apart?
Stern: AI is most useful when it strengthens how a business already operates, not when it tries to take over the customer relationship. For small businesses, that means utilizing it behind the scenes. It can help with inventory planning, spotting trends, and highlighting which customers and products drive repeat business. That kind of support makes day-to-day decisions easier without changing how the business or experience feels to customers.
Where things tend to go off track is when technology starts to replace the human element instead of supporting it. Small businesses win because they bring judgment and context into each interaction. That shouldn’t be handed off.
The better approach is to let AI surface insights and handle repetitive work, while the owner or staff uses that information to have more impactful conversations or make stronger recommendations. When it’s done right, the technology isn’t the focal point—it just makes the experience sharper.
Lesonsky: What’s one thing a small business owner can do today to better connect with customers and stand out?
Stern: Get onto a modern system that makes your business visible where customers actually begin their search. Discovery has more or less shifted to being online. People are using search engines, including AI, to find and evaluate options before they ever walk into a store. If your inventory, business information, and expertise aren’t structured in a way that those systems can access, you’re not even in the running. It’s not about marketing more; it’s about being present at the moment of discovery.
That starts with a clean, connected foundation. Your POS, inventory, and customer data should be up to date and able to feed into the platforms where people are searching. When that’s in place, your strengths can show up early. While visibility is what gets you considered, the in-store experience is what makes it stick.
Lesonsky: Looking ahead, what will separate the small businesses that thrive from those that struggle?
Stern: The small businesses that succeed will be disciplined about where they focus and practical about how they evolve. They won’t try to match larger competitors. Instead, they’ll invest in the areas where they already stand out and continue to build depth there. That consistency is what creates trust and keeps customers coming back.
At the same time, they’ll make sure they are easily discoverable. As more of the buying journey shifts into digital channels, being hard to find becomes a real liability. The businesses that thrive will adopt modern tools to make their products, expertise, and availability visible without overcomplicating how they operate. It’s a balance: stay grounded in what you do best and use technology to make sure it actually reaches people.
My Takeaway: What stands out here is that small businesses don’t win by trying to compete on scale—they win by leaning into what makes them different. Expertise, authenticity, and personal connection are more than “nice to haves”—they’re real competitive advantages.
In a retail landscape shaped by technology, the businesses that succeed will be the ones that use it to support the customer experience, not replace it.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
