The fight for your dollar
EDITOR'S NOTE: We are lucky to be living in communities where retail districts are still strong and vibrant; however, we cannot pretend that big online stores aren't a real threat to our local businesses. Some are finding great ways to adapt, but they can only do so much in their fight to stay open and viable. The rest is up to us — their community. We, at this newspaper, wanted to do our part in bringing awareness to the issue because once a door is closed, it doesn't open back up. So, as Small Business Saturday and holiday shopping approaches, it is important for all of us to think of our local stores first. Our dollars are just tiny drops in the bucket for big box online stores, but for our homegrown businesses, those drops are what keep our communities prosperous and full of life.
They are like the tiny bulbs of a Christmas tree, randomly and often without much warning, going dark.
Throughout the lakes area, big and small shops of all kinds are boarding up their windows, shutting off their lights and closing their doors. They are mom-and-pop shops, as well as bigger, seemingly more "shored up" corporations that just can't seem to withstand their most fierce competitors — big box, out-of-state, online retailers.
Some communities are feeling the squeeze more than others, but the fear and the warnings are all the same: If too many little light bulbs go out on that string, all will go out. What could be left is a lot of sad, dark downtowns void of the shops people have grown to love.
The 8,000-pound gorilla
Twenty years ago, local retailers were busy trying to figure out how to withstand the "big, bad" Walmarts that were invading their local communities. Some figured it out, others didn't. But those that did are finding themselves staring down the same problem, except this time it's a problem on steroids.
"Amazon. That's a tough one," said Perham Economic Development Director Chuck Johnson. "Walmart has been the 800-pound gorilla, and now Amazon is an 8,000-pound gorilla ... and they're getting bigger."
That gorilla — and gorillas like it — are proving mighty capable of smashing bricks and mortar, as businesses across several lakes area communities have crumbled.
This year, the Viking Plaza Mall in Alexandria has been hammered twice, once when JCPenney locked its doors and a short time later when Herberger's closed. These were two of the mall's four anchor stores.
In Detroit Lakes, the family-owned Norby's Department Store closed its doors after 112 years in business. It was a huge anchor store downtown.
Norby's could withstand the struggles of pioneer settlement, two world wars, the Great Depression and, yes, Walmart. It could not withstand Amazon or the roadblocks its own name-brand vendors would throw at them, including the restrictions they implemented with regards to any online business they allowed Norby's to do. After all, big brands like Nike and North Face now have their own online stores to think about, and those harsh changes meant Norby's was left out in the cold.
They weren't alone. The Detroit Lakes Kmart, Vanity and Midwest Workwear have also closed within the past year and a half. Three out of the four buildings remain empty.
Big department stores like JCPenney are gone from some of its area locations, including Thief River Falls, Morris, Red Wing and Wadena. Many of the vacated buildings in Wadena have been filled for use as office buildings, services, a church, and recently small business retail stores. The old JCPenney building is one that remains empty.
JCPenney and other big department stores like it were major draws to come downtown and walk around to see what else you could find, says Dean Uselman, economic development director in Wadena. The fewer local shops there are, the fewer people enticed to make the trip out to any of them.
"It's kind of a cancer that continues to eat away," Uselman said of online shops' ability to take away from brick and mortar.
For existing businesses like Weber's Wadena Hardware, the attractiveness of online shopping is something he hears every day.
"It does affect us," said Tom Weber, owner. "I bet I hear it a hundred times a day, 'I can get this online.'
"You can get it here, too," he reminds them.
While the store offers online shopping through its Do-it-Best website, in-store shopping is still the bulk of its sales.
Ron Greiman, owner of Greiman's Printing in Wadena, recalls looking over Wadena since the main street was torn out and reconstructed in 2003. He could think of 14 businesses since that time that are no longer operating.
If one thinks it's just the shoppers and business owners who are affected by these closings, think again.
Norby's Department Store paid more than $19,000 in property taxes last year — money that each year has helped run the city of Detroit Lakes, the Detroit Lakes School District and Becker County. That's all money lost by just one store, and while some of it may have shifted to other local stores, some was inevitably spent online and sent out of state, never to be seen in the Detroit Lakes area again.
There's also the local organizations that are directly affected when this money goes out of local circulation.
"Amazon is not donating to everything that your children are in or that you're in," said Denise Schornack, owner of Nadine's Ladies Fashions in Perham. "We all — especially in Perham because we work great together — are great at donating to community events."
Then there are the jobs. Every time a local store closes, jobs are lost. According to the Bureau of Labor Statistics, jobs in department and local retail stores have fallen by 25 percent over the last 15 years, while e-commerce jobs have soared by 334 percent. Unless there happens to be e-commerce distribution centers popping up in these smaller lakes-area communities, that 334 percent growth means nothing.
The uphill battle
In August, 100 local teens and young adults under the age of 25 were surveyed by the Alexandria Echo Press about their shopping habits and preferences. When asked whether they preferred shopping in-store or online, 74 reported they preferred the "real deal" and 26 preferred to make purchases through online retailers.
While shopping in-store still reigns as most popular among teens and young adults, it is no surprise that shopping with a screen is growing exponentially in popularity. The most common reason was simply convenience, but other reasons weren't so obvious.
Some said they preferred online purchasing to avoid the social components — buying online is less draining and causes less anxiety than facing people they may know, "nosy" salespeople and long checkout lines. Other reasons for buying online include larger selections and better sales and discounts.
"I have definitely changed how I shop over the years," said Sarah Wethern of Alexandria, who is 35 years old and rarely goes to malls or stores anymore. She says she did as a teen and even into her 20s, but now online stores make everything too convenient and full of options to resist. "As a plus-size woman, I can find better deals online for clothes I like," Wethern said. "I've never found many good plus-size options in Alexandria. I've even taken to ordering groceries and household items online via Amazon or Walmart's free grocery pickup because it saves me time."
Amplifying the challenge is that people are generally busier than they were 20 and 30 years ago. Time is valuable. Minnesota is cold. When given the choice to either go outside in freezing temperatures and pop in and out of stores to find something, or to sit on a warm couch and browse the options that are so easy to select with the click of a button, brick and mortar stores have a hard sell in front of them.
"That's a hard argument to make, I'll give you that," said Aaron Karvonen, who owns three retail stores in Perham and makes sure he remains educated on consumer trends.
The closing of Norby's just 15 miles down the highway did give him pause to re-evaluate his business models, as he was set to open up a large clothing store in Perham only weeks later. He knows what he's up against and doesn't believe for a second that a lot of people are giving any forethought into the future of their community stores when making their purchase decisions.
"It's an ultristic idea to really think that the average person is sitting there thinking, 'What if I don't have any stores to shop at in 10 years?'" Karvonen said. "They're just sitting there thinking, 'I can save $10' or "I can order this real quick on my phone,' and it's just so convenient."
Karvonen says the answer isn't to try to compete against Amazon, it's simply to be a better business.
"We have to deliver more value, and each business has to figure out what that is," he said. "If you can do that, then you start to win on a local level; you can start to convince people that there is a great alternative that is local."