Fighting back: Local retailers step up their game as online shopping gives them a run for their money
Editor's note: There is an old saying in the newspaper industry of: "You give power to that on which you shine the light." We, at this newspaper, believe that one significant aspect that makes up a healthy community, our local business district, is under threat from big, online retailers. This is not a problem that can be fought alone, but we hope that by shining our light, we can help empower our communities to stand together and keep our local businesses open and thriving.
In the time it takes to read this sentence, a shopper is able to take their phone, quickly search up something they want on Amazon and with a simple and free "one-click" option, have that item on its way to their house with delivery promised in two days.
That kind of quick convenience is what local retailers are up against as they try to convince shoppers to stay loyal to them.
But it isn't all doom and gloom. When it comes to local retailers, many say that success is still theirs for the taking.
In part two of our three-part series, "Bricks and Clicks," we delve into what can be done to help the shops in our lakes region survive and thrive.
'Evolve or die'
Online shopping may be a bit of a growing beast in this economy, but roughly 90 percent of commerce still happens in the brick-and-mortar stores. For "mom and pop" shops and even bigger box retailers with tight profit margins, fighting for that 10 percent is still vital and could mean the difference between surviving or not.
"You have business model change occuring all across different industries as a result of consumer preferences changing," said Aaron Karvonen, owner of three retail stores in Perham. He says when business owners fail to recognize those changes in what customers want or expect, they won't last long.
"It's evolve or die," he said, adding that he believes one of the most valuable things a business can have is fresh eyes.
In Karvonen's case, it's him. The 26-year-old bought his father's furniture business a couple of years ago and has since made significant changes.
"When any person has gotten into the habit of running things for 25, 30, 40 years, you can be less reactive and less responsive to those business model changes," said Karvonen. His father was able to successfully run the business during his years, but now as commerce is rapidly changing, Karvonen says that his new perspective is what's needed going forward.
"I'm much more interested in being nimble and reactive, and I'm willing to blow up what was a norm or what was a process or what we're used to doing as a company because I have those fresh eyes," he said. It's important to be able to walk into the store and identify what used to work best back in the day but is now "garbage," Karvonen said, because of the fact that it no longer fits with consumer preferences.
This doesn't mean trying to out-Amazon Amazon—no small-town retailer is likely to build a mousetrap quite like that. However, there are concepts business owners can grab onto in their fight to stay viable.
Can't beat 'em? Join 'em
One would think that since online shopping has been a thing for several years now, retailers would be all for expanding their opportunities. However, according to Forbes, only 28 percent of small businesses are using the internet to enhance their sales. Whether it be a fear of technology, a false sense of security, a belief that their products wouldn't do well online or other perceived roadblocks, business owners may be missing out on big opportunities.
Joey McQuiston, owner of Joey's PC for 10 years in Wadena, says having a storefront and an online presence helps them with the bottom line.
"What we as small business owners can do to compete is to specialize in our field," said McQuiston, who says he makes sure to stock products he knows potential in-store customers want and need, and then sells products online that locals don't buy. "And having a knowledgeable staff to answer the customers questions is also very important; offering a more personalized shopping experience will be very much appreciated in the future."
Having the ability to service the products they sell gives small businesses an additional advantage, McQuiston said.
Marceia Andreasen and her daughter, Kelly Falk, of Alexandria are a mother-daughter duo that has now celebrated the three-year anniversary of Kindred People—a fashion and lifestyle boutique with locations in Alexandria and now Fargo, which just celebrated its one-year anniversary.
Andreasen credits much of the store's success to her daughter, who has a degree in public relations and marketing and prior to opening up the shop was a social media coordinator for a large advertising firm. Andreasen says when they chose the point-of-sale system for the store, often referred to as POS (or the cash register), they chose one based on their online store/website to sync with the system.
Falk and her mother believe that in order to successfully run a boutique such as theirs, there is a need for a social media presence. Although they rely heavily on Instagram, the store can be found on Facebook, Twitter and its own website.
"When we put our items on social media, it's fun to see the interaction and to connect with our customers that way," said Andreasen, who did add that it can be tricky to have an online store because they carry limited quantities of their merchandise. "We want to be unique and different and a place to find things you don't see on everyone else."
And, according to some business owners, expanding their footprints beyond their hometown doesn't mean they can't still get to know customers and their preferences.
"We have quite a few customers outside the area that we send boxes every week to," said Denise Schornack of Nadine's Ladies Fashions in Perham, who says she has it set up this way so that the ladies don't even have to shop.
"They just send back what doesn't work for them, and they keep what they want ... but we know them so well that very little comes back. So, we don't just do Perham, we have customers all over the place, and that's exciting."
And when it comes to technology, another Perham business owner has found that it can be used to his advantage as well. Steve Richter of Richter's Men's Store says he loves seeing how often women will come into his store and take photos of his merchandise to send to the men in their lives, who don't even have to physically be there.
"The wife will shoot like six photos to him saying I like this one, this one and this one, and then boom—I've got a sale," said Richter.
Finding that balance between store, website and social media takes energy, but if done well it can be a winning combination. Throw in some good old-fashioned expertise and it's much tougher for an Amazon-style company to compete with.
Attitude is everything
Why are some downtowns throughout the lakes region—and beyond—more vibrant than others if big box retailers are equally as available to everyone, no matter what community they live in?
One big answer, according to some experts, is attitude.
"People need to start looking in the mirror," said CEO of the Retail Doctor Bob Phibbs, a consultant who makes his living going into different communities to coach retailers on how to thrive under the current commerce environment. Ironically enough, he says the business owners who choose not to attend his seminars in the towns he visits are the ones who should be there.
"People think customers will stop by their store because they've been there a long time and everybody should already know where they are and who they are," said Phibbs, who says the No. 1 mistake businesses make is that they no longer market themselves. Another huge self-inflicted roadblock, according to Phibbs, is the parties they throw for themselves—namely, pity parties.
"They blame things on Amazon or Walmart or their landlord," said Phibbs, who says retailers that have been in the business a long time often get lazy and simply expect people in their community to support them, rather than remembering that they still need to earn people's business day after day, year after year.
"They don't remember what it was like when they first bought that store and they were really working it ... when they'd have done anything for a customer," said Phibbs, who says some retailers are now content with sitting behind the counter and waiting for customers to walk in.
As he travels, he can spot a healthy downtown by first looking at the little things.
"They'll have the flower pots around town and all those things that show they care and trying to make their downtown an extraordinary experience for people," said Phibbs, who says millennials and Gen X'ers want to shop in downtown stores, but want them to be nice and clean and appealing.
For those communities that are struggling, he believes it only takes a couple of retailers willing to lead the charge, to put a stake in the sand and to say, "We'll do better." From there, synergy can be a powerful force that can lead to bigger and better things as retailers work together instead of against each other.
"And that's when you can go to your city council and say, 'We've got a plan' or 'here's what we want to do,' and then city councils and banks are more willing to invest" in those downtown improvement projects designed to bring in more business, said Phibbs.