At her small shop on Columbia’s Devine Street, Arden Korn is scrambling to keep up with a consumer shift toward online sales.
Korn, the owner of children’s clothing and gift shop Little Lambs & Ivy, has spent money upgrading her website and has hired a young worker to increase her store’s social media presence. Next year, she will select one or two dozen unique items – such as baby bowties – that she can offer exclusively and sell them online.
“It’s kind of like, if you can’t beat ’em, join ’em,” Korn said.
The shift online in consumer spending habits has become more apparent this holiday season, which, traditionally, can account for up to 40 percent of a retailer’s sales for the year. That shift is seeing brick-and-mortar stores struggle to keep up, as more and more shoppers are purchasing gifts online.
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The National Retail Federation’s Shop.org predicts online sales will grow 13-15 percent to $82 billion this November and December, compared with the same period last year. That continues a trend from late 2012, when online sales grew 15 percent in the final three months of the year, compared with the fourth quarter of 2011.
“It’s the power of information and technology combined,” said Marianne Bickle, department chair of retailing for the College of Hospitality, Retail and Sport Management at the University of South Carolina.
‘Trend to continue’
Several factors are contributing to the trend, Bickle said, including:
• More people are using tablets and smartphones to check prices while shopping in a store or in their homes.
• The worst recession in a lifetime has created a strong consumer desire to save money on purchases.
• Consumers are getting more comfortable paying for goods online.
“I would expect to see the trend to continue because people are getting more comfortable with the Internet and the experience,” said Curtis Simon, an economics professor in Clemson University’s John E. Walker Department of Economics. “Not going online is no guarantee of safety.”
That was underscored last week, when discount retailer Target revealed that the debit and credit card information of 40 million customers who had shopped in stores since Thanksgiving had been compromised. Those who shopped on the company’s website were not affected.
“Certainly, that’s going to hurt” in-store sales at Target, Simon said.
‘Becoming more aggressive’
Meanwhile, retailers like Korn are finding ways to stay relevant in an increasingly digital world.
Korn said she has seen her sales rebound from the recession. She has had about 1,000 more customers so far this year than during the same period last year. But they are spending less. Her average sale is down by about $5.
Korn thinks part of the reason for that dip could be that more people are shopping online so they have less money to spend in her store.
Her nascent online efforts are beginning to pay off, though. When she posts new products on her store’s Facebook page, for example, she gets calls from people wanting to buy the items.
“We’re shipping to more places,” she said.
Retailers also are using technology to turn sales in their favor, sending coupons to consumers’ smartphones or sending them messages that they are eligible for an upgrade or their warranty is expiring, USC’s Bickle said.
“They’re not relying on the consumer to come into the store; they’re actively encouraging … the consumer to come into the store,” Bickle said. “We have not seen that with the exception of car dealers in the past.
“They’re becoming more aggressive.”
‘We’ll be able to do better’
Beyond pushing online sales and reaching out to consumers via technology, brick-and-mortar retailers can create an appealing in-store shopping experience that will keep customers coming back, Bickle and Simon said.
“We’re doing all sorts of things so that this becomes not just a toy store but a family’s toy store,” said Deedra Senter, co-owner of The Learning Express toy stores in Irmo and Lexington, now in their seventh year in business.
“We’ve just always done it because we feel like it’s more than a place to buy toys,” Senter said. “We want (customers’) children to run around and have a good time.”
Learning Express tries to keep customers coming back by offering special touches, such as free gift wrapping and personalization, as well as call-ahead and curbside service.
For example, a child can register for birthday gifts by going to the store and filling up a bucket with items from their wish list. A party guest then can call the store, ask for something from the bucket in a specific price range and have the toy gift wrapped and delivered to them in the parking lot on the way to the party.
The store also offers parents’ night-out events and Rainbow Loom classes to teach children how to make crafts on the ubiquitous craft toy.
Those efforts, along with a rebound in the economy, seem to be working.
The Learning Express saw its sales dip 20 percent to 30 percent from a normal year during the recession. This year, however, sales are up 20 percent to 30 percent from that baseline normal year, Senter said.
“We definitely feel the online shopping,” said Senter, who sees customers pulling out their smartphones and tablets to compare prices – a phenomenon known as showrooming. “We’re not going to be able to beat them every time. (But) sometimes, we’ll be able to do better.”
The personal service and extra touches, such as the ones that Senter’s store offers, are what it will take for retailers to be successful in the changing consumer landscape, Clemson’s Simon said.
“The people that are left with showrooms are going to have to have something in there that draws people to that showroom,” he said. “If you can deliver that, I think you’re going be OK.”