Statesboro retail trending upward despite national inclination

STATESBORO--The Bulloch County region and Statesboro in particular are defying the tendency towards shopping online that has spurred the bankruptcy filings and store closures of major national retailers over the last five years.

According to the Business Innovation Group, a downtown Statesboro branch of the Georgia Southern University College of Business Administration, retail jobs in Statesboro are expected to increase by 5.8 percent over the next three years. The research specialist for the BIG, Benjamin McKay, said this can partially be explained by the upcoming changes in the local market.

“There is a shift taking place in the Statesboro real estate market,” McKay said. “We’re seeing a lot of services that are being added to the market that are a lot harder to be found online.”

McKay said these include dentists and doctors’ offices, restaurants and other businesses that require a physical customer presence. According to BIG data provided by McKay, the rate of expected growth in retail jobs in Bulloch County is nearly two percent more than the rate in Georgia, and double the 2.9 percent expected growth rate in retail jobs across the United States.

The data from BIG shows that currently, retail establishments are 16 percent of all businesses in Bulloch County. The total number of retail establishments in the area in November was 261, compared to 1,592 total establishments.

Bulloch back story

Statesboro is a destination point for shoppers from surrounding, smaller towns. The retail stores, both small business and public corporations, get much of their business from customers who live in nearby towns.

“The thing that people don’t realize about this retail market is that we are a local hub for every other place around here,” McKay said. “Metter, Swainsboro, Sylvania, they have a choice to either drive here or Savannah or Pooler. Some of them are tending to drive here because they don’t want to deal with the crowds.”

The draw of Statesboro’s retail scene includes shops in the Statesboro Mall like JCPenney. Elena McLendon, office manager at the Downtown Statesboro Development Authority, noted that JCPenney gets much of its business from GSU business students required to buy suits to wear for class presentations.

“I think that’s where they’re hitting their market,” McLendon said.

Overall, JCPenney’s stock price has dropped from more than $10 per share a year ago to $3.50 per share now. According to its most recent SEC filing, the company reported a net loss of $242 million in the fiscal year that ended in July 2017. It reported having $7.7 billion in liabilities, or money owed.

Small, privately owned businesses in Statesboro also pull customers from surrounding towns, including Frills by Scott, a renowned formalwear shop downtown widely used for proms, homecomings and other formal events.

“Frills by Scott has a regional impact in prom-wear, in the beauty contests and the pageants; he sponsors those at a statewide level,” McLendon said.

National big-box shift

According to the National Retail Federation, 21 percent of consumers make more than half of their purchases solely online. Reuters reported that Cyber Monday raked in $6.6 billion from online shoppers this year, the single largest online shopping day ever by $1 billion.

The long list of retailers to file for bankruptcy in 2017 includes Toys R Us, True Religion, RadioShack and Gymboree, according to Business Insider. Many blame Amazon for much of this downfall, but sources agreed that Amazon only bears partial responsibility.

In a piece entitled “What to Do with Dead Malls,” the Wall Street Journal reported a projected 8,600 brick-and-mortar retail store closures for 2017. In the Atlanta Journal-Constitution, Leon Stafford reported that Atlanta-based Home Depot’s Henry County, Georgia Warehouse is ten times the size of any actual Home Depot store. Its sole purpose is dealing with online sales. Major corporations are shifting online with the consumer base to stay successful.

A GSU associate professor of marketing, Jin-Woo Kim, Ph.D., pointed out that Walmart has done an exemplary job expanding its online presence, developing special deals and strategies to retain online shoppers. Kim called Walmart a true “bricks-and-clicks” operation.

Sandra Hodges, co-owner of Frills by Scott, said some big-box retail stores need to change their approach to increase the quality of their customer service.

“I get very frustrated going into a place like K-mart because you can never get waited on,” Hodges said. “Nobody checks on you, nobody offers to bring you anything and you’ve got to chase somebody down just to find something.”

Marketing musts

Jackie Eastman, Ph.D., another professor of marketing at GSU, said that most large retailers realize they need to establish a robust online store.

“Physical retailers recognize they have to have an online component or else they’re going to lose sales,” Eastman said. “Ideally, they like to get those people to pick up in store, because the research has shown if someone buys something online but they pick it up in the store, they will physically buy something else.”

She added that this process is called an add-on sale, and it is part of what drives businesses large and small to grow their online presences.

Hodges, from Frills by Scott, agreed with Eastman’s assertions that a major purpose of online selling is to drive people to the physical store.

“We try to make sure that [the website] just drives people to our store, to our physical location, which is the experience of coming into a brick-and-mortar store,” Hodges said.

Hodges added that “finding a niche” is the key for a business o f any size in this area, as evidenced by JCPenney’s business suit sales and Frills by Scott’s success in formalwear.

Kim asserted that major corporate physical stores need to focus on driving customer loyalty by improving customer service.

“These companies should increase customer satisfaction and loyalty,” Kim said. Satisfied and loyal customers are more lucrative than one time consumers.”

Even so, Kim, Eastman and McKay agreed that being a college town makes Statesboro a tough location to open a retail store. Many GSU graduates have business ideas that go awry after a year or less simply due to lack of staff or being overworked.

“They open up a retail store and then they go ‘Huh, that’s a lot of work. Forget that,’” McKay said.

But the numbers provided by McKay and BIG should give aspiring retail business owners some hope that if they find a niche, they may be able to survive and thrive in the Bulloch County economy.