BRICK AND CLICKS: Putting customer first is key for area retailers
West Central Initiative (WCI), an organization that works to strengthen the economy in nine west-central Minnesota counties, has turned its attention recently to the region's retail picture.
At webinars in Morris and other cities it has been delivering a simple message: Small-town retail is not dead, it's just changing.
"We were finding the negative narration that small town retail is dying," said Jill Amundson, an associate planner with WCI. "I want to emphasize that that is not true."
Retail sales are a powerful driver of local economies. According to the most recent state figures, gross sales from retail in 2016 generated approximately $216.1 million in Hubbard County, a 12.9 percent increase over five years and $501.1 million in Becker County, a 20.6 percent increase over five years.
Clearly, retail is doing its part in pumping money into the community. But big-box retailers, online shopping and consumer shifts away from malls have introduced challenges to a long-stable retail scene.
Doing business the same as it has been done for years can also be a recipe for disaster. Tara Bitzan, executive director of the Alexandria Lakes Area Chamber of Commerce, has had conversations with owners of stores that have seen growth and those that have lost customers.
"The differences in the businesses are often the ones who have adapted to the new environment or have reinvented themselves," she said. "You have to be willing to grow and evolve to stay relevant."
"There is no time like the present to try something new," Amundson said.
Embracing change is one of several themes emerging in the lakes area as businesses and organizations work to keep their retail sectors strong, even as Herberger's and selected Target and JCPenney stores have closed their doors in the region. In the final part of our three-part series, "Bricks and Clicks," we explore what is being done to assist brick-and-mortar businesses, and what those shops can do to attract and retain customers.
A helping hand
A healthy retail landscape is crucial for all communities, both financially and in the jobs it creates. Small businesses employ about half of all private-sector employees, according to the Small Business Administration, and have generated 65 percent of net new jobs over a 17-year span.
With so much at stake, local governments employ various methods to lend a helping hand, from holding or promoting community events to beautifying downtowns to finding ways to create a better business climate. Within the past few years, Detroit Lakes and Alexandria have redone its downtown streets and sidewalks to make them more pedestrian-friendly, while Wadena and Park Rapids have pursued partnerships with outside groups.
In 2017, the City of Wadena Economic Development Authority partnered with the Buxton Group, a nationwide developer that has worked with more than 750 cities of all sizes on developing retail recruitment strategies. The business services firm says it can identify items that current retailers could be selling in their store and suggest new businesses that may do well in Wadena.
"I see this as a very great marketing opportunity for this community," WDA Executive Director Dean Uselman said.
In Park Rapids, the city's chamber, business and lodging associations, the county and two foundations banded together to fund a branding project. Working with a Dallas-based branding and marketing agency for 10 months resulted this past summer in a new brand for the area: Heartland Lakes. Butch De La Hunt, president/CEO of the Park Rapids Lakes Area Chamber of Commerce, said the Heartland Lakes branding has brought new opportunities to highlight all the region has to offer.
"We've got to continue to promote the region and the great assets we have and say, 'Hey, if you live here, shop local, support your local businesses. If you visit here, support the neighboring communities,'" he said. De La Hunt points out that without that support, area businesses cannot survive. "Once they're gone, it's harder and harder to re-establish them."
The Alexandria chamber is working on raising awareness of supporting local businesses in a couple of ways. One strategy involves educating a generation that has grown up with online shopping.
During presentations to high schoolers, Bitzan said the chamber shows students "how their money turns over in a community, and if you buy local that money goes into paychecks for local people who turn around and spend their money in other local places."
It seems to have worked. She heard how students changed their spending behavior based on what they learned through these efforts.
"Now that we have gotten our message across on a smaller scale," Bitzan said, "we intend to ramp up that education model and move forward with a community-wide marketing campaign."
She is referring to a "Do Business Local" program designed to encourage residents to spend more of their dollars in town. The marketing program will include print and radio advertising, signs in storefront windows, social media campaigns and presentations.
"Our goal is education," Bitzan said. "Most people don't stop to think about the impact that sending their money out of the community has on the local economy. It is convenience that they think about."
Convenience is often cited as a key reason consumers shop online. While e-commerce remains a relatively small part of retail sales — less than 10 percent in 2018, according to the U.S. Department of Commerce — it is growing rapidly. National sales figures show that e-commerce sales are increasing at nearly three times the rate of total retail sales.
However, this past June, a U.S. Supreme Court decision requiring sales tax to be charged on more online purchases will help brick-and-mortar retailers in their battle with online competitors.
"We've been fighting for this for 20 years," said Bruce Nustad, president of the Minnesota Retailers Association. "There's a sense that some fairness in the sales tax arena will at least level the playing field."
Some businesses have decided if you can't lick 'em, join 'em. They have expanded their markets globally by going online.
The most recent addition to Morris' retail scene is a business with an online presence and a retail store. Inherit Clothing Company had been using a website to sell modest apparel for women and children out of a rural warehouse, before opening a retail store and in September moving to downtown Morris.
"We ran out of space," owner Amy Ekren said of why the businesses moved.
Scandinavian Gift Shop has been a part of Alexandria's downtown since 1983, selling a wide variety of items from Norway, Sweden, Finland, Denmark and Iceland. They added an online presence and have developed a customer base from countries around the world.
"If we didn't have the internet, I don't know that we would be surviving," said the shop's co-owner, Heidi Bergerson.
Nustad recommends that store owners get close to their customers, who they know better than anyone.
"Those doing best are really embracing their customers through loyalty programs and providing an experience for shoppers," Nustad said. "It's not a magic bullet, but it's something they can do."
In talking with people from the lakes area region, it becomes clear there are several other things that retailers can do. One is to capitalize on community events that draw big crowds, by reeling in shoppers that may have had no reason to shop in a store before. To do that, businesses have to be open during hours when it is convenient for people to shop, and not rely so heavily on the peak summer months.
"Drawing people downtown in the off-season might require more businesses to be open then," said Kim Holder, owner of Rustic Cabin Decor in Park Rapids. "Even if we did just once or twice a month when as many stores as possible were open that would encourage people to come here."
Bill Simpson, who owns the Trading Post in Park Rapids, advocates keeping stores open at least on Fridays and Saturdays throughout the winter.
The biggest edge brick-and-mortar stores may have is in providing a level of personalized service that consumers can't get online. Deb Brown of SaveYour.Town, the group that helps West Central Initiative deliver webinars, says more consumers are seeking customer service.
"People want to be treated special. They want to have an experience. They want to know they are valued," Brown said. "They don't want the same old thing."
After all, a computer can't stretch shoes for a more comfortable fit, or hustle to a rack for a better size.
"You will never outbuy Amazon," said Jed Brazier, executive director of the Wadena Chamber of Commerce, "but you can pivot and lean into those things that you can do that they cannot, which is those conversations, that customer service, that goes so far into bringing people back into the door."
He said it can mean the difference between developing a loyal customer and chasing one away. Brazier can't forget a time when he received no welcome and even had the lights turned off on him while looking to make a significant purchase.
"That's just a great example of how it's being done wrong," he said. That's the only bad example he had to share, but it shows how just one bad experience for a customer can be their last with a business.
"Having good customer service is the most important thing. We insist on it," said Steve Sorenson, owner of Aunt Belle's Confectionery/Grandpa's Cabin shop in Park Rapids.
"I had an experience years ago putting over $100 worth of fuel in a truck and I didn't get a thank you. Guess what? I never went back," he said. "Now I tell my employees to greet everyone who comes in the store and when they leave, even if they don't buy anything to thank them for stopping. You don't know if they are coming back later to buy something."
Those bad experiences for Brazier and Sorenson were isolated incidents, with friendly customer service far and away being the rule. And as long as customers continue to have good shopping experiences, many area retailers will continue to thrive.
As Patty Dusing, who owns a women's clothing boutique and serves on the Alexandria Downtown Merchants Association, points out, how many "girls' weekends" can be done sitting around a computer?
In the end, perhaps the most effective way of taming the 8,000-pound gorilla named Amazon is to update the familiar phrase coined more than 100 years ago — the customer is always right — with a new slogan: Do what's right for your customers. Give them the kind of shopping experience that keeps them coming back for more.