South Dakota retailers are adapting to the online shopping trend by enhancing the in-person experience – 71Bait

RAPID CITY, SD (SOUTH DAKOTA NEWS WATCH) – This holiday season, retailers in South Dakota are hoping to capitalize on a national trend of increased in-store shopping by enhancing the customer experience and integrating online offerings into their business model.

An annual survey by the National Retail Federation and Prosper Insight & Analytics found that of an estimated 115 million Americans planning to shop this year on Black Friday (the retail extravaganza the day after Thanksgiving), 67% expected to shop in person, up from 64% in 2021.

That modest increase could be attributed in part to reduced concerns about COVID-19 infection and a growing desire to reconnect with family and friends by doing in-person shopping at a time, according to South Dakota shoppers surveyed by News Watch share, where retailers around the world are state is taking steps to improve the overall in-store experience.

The personal rise contradicts the conventional wisdom that brick-and-mortar shopping has had a poor outlook in recent years due to the rise of digital retail giants like Amazon and many retailers shifting their focus to selling online.

“When I took this job four years ago, the narrative was the death of retail, the internet will take over,” said Nathan Sanderson, executive director of the South Dakota Retailers Association. “But we have seen for decades, even centuries, that retail is constantly evolving. What I think you’re looking at right now is a real mix of online shopping and in-person shopping. Online will continue to be with us, but that doesn’t mean it will happen without what’s happening in stores.”

Retail stores have had cause for concern as the COVID-19 pandemic has coincided with Americans’ growing interest in online shopping in recent years.

According to the US Census Bureau’s annual retail survey, e-commerce sales grew by $244.2 billion, or 43%, nationwide in 2020, the first year of the pandemic, up from $571.2 billion in 2019 to $815.4 billion in 2020.

On a level playing field for local retailers, the South Dakota v. Wayfair in 2018, which removed the requirement that a seller must have a physical presence in a state in order to be required to collect and remit sales taxes to that state. Requiring e-commerce sites to pay the same tax rate as in-store retailers has reduced some of their competitive advantage in pricing, Sanderson said.

“I don’t think the impact (of the court ruling) can be overstated,” he said. “If you don’t have to pay sales tax, that’s a 4.5% difference in the price of a product online compared to a (physical) store, and that’s significant.”

A national inflation rate of 7.75% in November helped boost sales tax receipts, but retailers are keeping an eye on the percentage increase between total sales tax and distance sales tax reported by online sellers.

According to the South Dakota Board of Revenue, sales, use, and excise tax revenues increased 13.8% from 2020 to 2021, while distance selling tax revenues increased 22.6% during that period.

Striving for balance rather than direct competition between these revenue streams is part of what Sanderson calls the “hybridization” of online and brick-and-mortar shopping.

The combination of online and in-person shopping is the latest example of changing retail trends, he said, “from outdoor markets to convenience stores and department stores to malls and now online retail and the resurgence of Main Street. There is always this evolutionary process and we continue to see that.”

Improving the shopping experience

On the afternoon of November 18, there was palpable pre-holiday activity at the Great Outdoor Store in downtown Sioux Falls. Owner DeAnn Echols moved quickly among the recently hung Christmas lights, chatting to customers and sorting through merchandise while trying to focus on a kickoff sale of outdoor winter sports that evening at the Washington Pavilion.

The outdoor specialty store operates online sales, but its website caters primarily to local shoppers unable to make the trip to Sioux Falls. Since moving into the former Rock Island Depot building in 2009, DeAnn and her husband James have focused on serving in-store for those looking for brands like Patagonia or North Face, as well as camping and climbing supplies.

“Being able to try things on, to touch and feel them, to see the exact color, to see what another person is interested in, to get ideas for gifts, all of those things you can’t do online,” DeAnn said Echols. “Many of the products we sell are somewhat technical or specific to a particular sport or activity, so it’s great to be able to speak to someone who has used that product or has experience or training in that activity. It’s about the personal touch.”

The Great Outdoor Store was temporarily closed to in-person shops for about six weeks in March and April 2020 following the outbreak of COVID-19, but it continued to allow people to shop and collect orders by appointment. The dynamic of the business — providing clothing and gear for outdoor activities — hasn’t been hit as hard as others during the pandemic as people grew tired of isolation and sought ways to explore the great outdoors.

“People aren’t just looking for shopping, they’re looking for camaraderie and engagement.”

For most retailers, however, maintaining social distancing during COVID-19 has meant expanding online opportunities for customers, whether it’s curbside pickup at major stores or expanded remote options and contactless payment at grocery stores. Businesses have learned to use social media more efficiently to be part of the community conversation and keep customers informed of updates.

Much of this progress was reflected in post-pandemic behaviors, with businesses inevitably maintaining an online presence. But attention turned to personal experience, as people began to leave their homes and return to boutiques and bookstores in search of the kind of shopping spree that a computer, for all its convenience, cannot provide.

Uptown Rapid, formerly the Rushmore Mall in Rapid City, features the K-9 bar, an indoor dog play center and a beer and wine bar as part of a renovation under investment firm RockStep Capital, which acquired ownership of the Rapid City Mall in 2021 There’s also Happy Hills Painting, which combines “professionally-led painting classes with a high-energy environment and a few drinks.”

“People aren’t just looking for shopping, they’re looking for camaraderie and engagement,” said Sandy Brockhouse, general manager of Uptown Rapid, adding that women’s clothing store Boehme offers customized shopping experiences for groups with a personal assistant. “We’re getting people to come out of the four-state area to shop and have fun on the weekend.”

Erica Berghammer and her daughter, Elizabeth Kvanvig, appreciate the convenience and value of online shopping, but also enjoy the togetherness of in-person shopping, including at Uptown Rapid in Rapid City. Photo: Bart Pfankuch, South Dakota News Watch(South Dakota News Watch)

Balance between camaraderie and convenience

On November 20, Erica Berghammer and her 15-year-old daughter, Elizabeth Kvanvig, carried bags from Bath & Body Works and upscale clothing store Francesca’s after finishing a shopping spree in Uptown Rapid.

They were in good spirits after spending a Sunday afternoon on a mother-daughter shopping trip. The community aspect of in-person shopping is a big reason they sometimes shy away from online purchases, Berghammer said. They feel freer to be on the move these days now that the pandemic has subsided, she said.

“We like to go shopping because we also like to go to lunch and have coffee,” says Berghammer, 42. “It’s something you can do together.”

But Berghammer said she often takes advantage of the convenience of online shopping, taking advantage of coupons, price deals and free shipping to save money. She can buy home goods online and collect Kohls’ Cash coupons, which offer discounts and sometimes free goods that she can have delivered or pick up at the Rapid City store.

As a girl approaching 16, Kvanvig said that the convenience and simplicity of online shopping also encouraged her to shop by phone. “You can do it at home from your bed,” she said with a smile. “You don’t have to get up and get ready to go out.”

Rapid City resident Kym Hop said she tries her best to shop in person at local stores to support businesses run by people she considers her neighbors.

“I’m willing to pay a little more for things on a local level,” said Hop, 57. “I grew up in a small town in Kansas, so I’m always thinking about giving back to the locals, and because we want to keep that.” our city great for our business people trying to navigate the world of Amazon.”

Like many people, Hop also shops online for convenience and better deals, especially for products that may be less accessible in the local community. For example, Hop said her husband recently saved money by buying her a Fitbit health monitor from Amazon.

More often, however, especially now that the COVID-19 pandemic has subsided, Hop is attempting to support Rapid City retailers by personally shopping at local stores. The social, family aspects of shopping are also big reasons Hop likes to shop in person, she said.

“We’re really getting back to normal in the way we’re getting out and getting together,” said Hop, who is married with two grown children who will be joining us over the holidays. “My husband likes to come along because we have a goofy, fun family and I love seeing people when we’re out, meeting people I don’t normally see.”

-– News Watch reporter Bart Pfankuch contributed to this report.

ABOUT STU WHITNEY

Stu Whitney is an investigative reporter for South Dakota News Watch. Whitney lives in Sioux Falls and is an award-winning reporter, editor and novelist with more than 30 years of journalism experience. Contact Stu at stu.whitney@sdnewswatch.org

South Dakota News Watch is funded by private donations and foundations and supported by several media organizations.

South Dakota News Watch journalists examine important issues, solve complicated problems and tell stories that too often go untold – stories that understand our complex world.

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