Retailers in South Dakota are Adapting to the Online Shopping Trend by Improving the In-Person Experience – Mitchell Republic

Retailers in South Dakota are hoping to capitalize on a national trend toward increased in-store shopping this holiday season by improving 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. 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.

“From open air markets to convenience stores and department stores to malls and now online retail and the resurgence of Main Street, there’s always this evolutionary process and we continue to see that.”

Echols SF Outdoor Shop .jpeg
DeAnn Echols, owner of the Great Outdoor Store in downtown Sioux Falls, is preparing for the holiday season by sorting merchandise on November 18th. DeAnn and her husband, James, have focused more on the in-person customer experience than selling online.

Photo by Stu Whitney, South Dakota News Watch

On the afternoon of November 18, there was palpable pre-holiday activity at the Great Outdoor Store in downtown Sioux Falls. Owner DeAnn Echols said the outdoor specialty store does online sales, but its website caters primarily to local shoppers who can’t travel to Sioux Falls. Since moving into the former Rock Island Depot building in 2009, DeAnn and her husband James have focused on serving the store.

“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.

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 momentum of the business hasn’t been impacted as badly as others during the pandemic because people were tired of isolation and were looking for opportunities to explore the great outdoors.

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.

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 Rapid City’s Rushmore Mall, features Bar K-9, an indoor dog play center and a beer and wine bar as part of a renovation under investment firm RockStep Capital, which acquired the mall in 2021. There’s also Happy Hills Painting, which combines “professionally guided 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.

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.

The community aspect of in-person shopping is a big reason they sometimes shy away from online purchases, Berghammer said.

“We like to go shopping because we also like going to lunch and drinking coffee,” says Berghammer, 42.

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.

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 bit more for things on a local level,” said Hop, 57. “I always think of giving back to local people because we want to keep our city great for our business people who strive to be in.” manage the world of Amazon.”

— This article was produced by South Dakota News Watch, a non-profit journalistic organization that can be found online at SDNewsWatch.org.

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