Despite the loss of several major retailers over the last year, Rock County’s retail spending continues to surge in a big way.
Retail spending in the first quarter of 2019 leaped by 13.8 percent over the same period last year, from $652 million in early 2018 to $742 million last quarter, according to state Department of Revenue sales tax receipts.
That’s by far the biggest jump in consumer spending in the nine years The Gazette has tracked retail sales on its Quarterly Economic Dashboard. It outpaces national averages for retail spending in the same period.
That occurred despite the store closures that have erased several hundred thousand square feet of occupied floor space and millions of dollars of inventory in Rock County—and that’s just counting the recent closures of Boston Store, Sears and Toys R Us.
The jump in local spending might seem counterintuitive, given national headlines on the purported retail store apocalypse driven by the trend toward online shopping.
Retail experts and local store managers offer one explanation, and it doesn’t have much do with foot traffic inside stores.
Actually, it’s the opposite. The uptick likely is due, at least in part, to more local stores embracing e-commerce: online ordering of items either for delivery to the home or for pickup at stores.
Pure online shopping—ordering goods for home delivery from distribution giants such as Amazon—still accounts for just 10% of U.S. retail spending, retail analysts say.
Bill Ryan, an economist and community business development specialist with the UW Extension’s Center for Community and Economic Development, said larger-scale retailers such as Target, Walmart and local supermarkets have gotten into online shopping through digital apps, which allow consumers to pick up pre-assembled orders at the stores.
Meanwhile, smaller national retail chains are becoming more nimble at playing Amazon’s game, too, he said.
Janesville-based Blain Supply, which operates a growing chain of Blain’s Farm & Fleet stores, is one local example.
Tim Madole, who manages the Farm & Fleet on Humes Road in Janesville, showed off a bevy of BOPAS—“buy online, pick up at store” customer orders—organized on storage racks in a room near the customer service desk.
There were bags of Keurig one-cup coffee maker pods, a cover for a three-burner gas grill, a selection of rechargeable, battery-powered impact drivers and drills, and a hummingbird feeder, among other online orders.
Customers at some point will walk in, pay for their items and go. Or they could have bulkier orders ready for loading into their cars at a drive-thru pickup lane at the far end of the store.
Madole said the job of balancing inventory for walk-in customers with the increasing trend of online shopping is like running a business that’s part store, part warehouse and distribution center.
“I look at sales numbers every day. Our e-commerce flow is very, very busy. Very busy every day,” he said. “The one thing about that is that you hope they’re not one-off customers. You want them in the store because we’re like anyone else. We want add-on sales.”
Here’s another phenomenon Madole has noticed: Some shoppers order their entire shopping lists on their phones while sitting in their cars in Farm & Fleet’s parking lot.
Those shoppers sometimes walk in the store about five minutes later, expecting to pick up their orders.
Madole explains to them that the store has a two-hour window between online ordering and pickup.
“It takes just a bit more lead time than five minutes,” he said.