Retail looks to retain local money

By Carlie Kollath/NEMS Daily Journal

Lee County’s retail landscape already has started to change shape, driven in large part by the struggling economy.
And over the coming years, other factors, such as changing demographics and shopping habits, will combine to challenge retailers even more.
But it starts with the buyer.
“The consumer that went into the recession is a considerably different consumer than the one that came out,” said State Economist Darrin Webb.
Those changes will have an impact locally.
According to the Community Development Foundation, more than 7,400 people worked in Lee County’s retail sector in 2009 – a figure that is more than the entire population of Amory (7,316).
In 2009, Tupelo recorded $1.3 billion in gross retail sales, according to figures from the Community Development Foundation. Retail for the entire county is a $1.8 billion industry spread across more than 500 retail establishments.
So, how will those numbers hold up as consumer habits and market forces shift?

The shifting demographics
The demographics will play an important role in several areas.
First, Webb predicts a change in the makeup of the retail work force.
In the past, a teenager working a cash register was a common sight. However, Webb sees the work force getting decidedly older in the near future.
More retirees, he said, will take the entry-level jobs to make extra money.
As the retirees man the cash registers or the drive-through windows, teenagers will find it difficult to compete for jobs.
“The numbers are with the older work force,” Webb said.
It’s going to be a problem for some rural areas of the state, he said, where the only jobs are retail.
Teenagers, he said, during the upcoming crunch will start going into entry-level jobs that are physically strenuous.
And, as Webb noted, the people doing the buying will do so in a different way than before.
“A frugal consumer is with us for a pretty long time,” he said. “I don’t see the consumer driving the economy as he has in the past.”
E-commerce also poses a huge threat for today’s brick-and-mortar stores. Consumers’ retail dollars are increasingly being spent online. E-commerce sales in the U.S. climbed 9.8 percent in 2010 from 2009, totaling $142.491 billion worth of merchandise, according to Web measuring company ComScore.
According to ComScore, 84 percent of Internet users made at least one purchase online during the 2010 holiday season. That figure is up 15 percent from 2008.
In the future, more shopping is expected to be done via mobile commerce, which is shopping via a web-enabled smartphone, according to trade information site InternetRetailer.com.
The region’s response
The questions aren’t without at least some suggested answers.
Consultant Tripp Muldrow has recommended that Tupelo retailers work together to promote the entire town as north Mississippi’s complete shopping destination in an effort to help the city boost its market share.
The Downtown Tupelo Main Street Association hired Muldrow to do a market assessment for the group. Muldrow found that Tupelo retailers are losing shoppers to retailers outside of the trade area.
Jeff Snyder, the general manager at The Mall at Barnes Crossing, looks at retail leakage as a challenge to conquer. Before the mall opened 20 years ago, it was commonplace for residents to drive to Memphis, Birmingham or Jackson to shop.
Sales retention continues to be the focus at the mall and in other areas of town, including downtown.
“It’s going to become even more important,” Snyder said. “You either have it or they’re going to go to another area to buy it or they are going to go online.”

Supporting new businesses
With the development of Toyota Motor Manufacturing Mississippi near Blue Springs, it’s likely that more stores, gas stations and eateries will open north of Tupelo to cater to the influx of people.
The question will be whether the population growth can support the new businesses, said David Rumbarger of the Community Development Foundation.
Either way, he doesn’t see Sherman or Blue Springs becoming the Barnes Crossing shopping district of 2020.
“I think the city limits of Tupelo will be the retail hub,” he said.
To keep the dominance, Snyder and other retail veterans said businesses must stay on top of the shopping trends.
The Mall at Barnes Crossing has been focusing on recruiting more upscale stores, and Snyder said that trend will continue for the the next decade.
In addition, he said, specialty stores will continue to grow in number and importance. Specialty stores are retailers with a more defined audience, such as American Eagle, as opposed to department stores which aim to cater to a wider audience.
John Glascock, professor of real estate finance and director of the Real Estate Center at University of Cincinnati, went a step further, saying, “Department stores are dying in the U.S. and have been since the 1960s. They just don’t know it yet.”
During his presentation at the 2011 Northeast Mississippi economic forecast conference, he said retail stores will have to focus more on entertainment as a means to compete with e-commerce.
Snyder sees a big future for brick-and-mortar stores, but agreed that more stores are emphasizing entertainment and value to get customers off websites and into stores.
“Book stores are doing a good job of hosting events in-store,” he said. “You can’t meet John Grisham online and get a signed copy of his book. … Instead of just going for a transaction, you’re going to an experience.
“Specialty shops have made themselves more theme shops. I see in the next 10-15 years more of that,” he said.