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Sunday, 26 November 2017 16:01

Q&A: William Hallan, Executive Vice President, COO and General Counsel at Michigan Retailers Association

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William Hallan, Executive Vice President, COO and General Counsel at Michigan Retailers Association William Hallan, Executive Vice President, COO and General Counsel at Michigan Retailers Association Courtesy Photo

The retail industry has been on a wild ride for 2017, both in West Michigan and nationally, as around 5,000 stores reportedly closed up shop. As such, many industry experts believe this year saw e-commerce take its biggest bite out of traditional brick-and-mortar retail. But as retailers gear up for the holiday shopping season, William Hallan with the Lansing-based Michigan Retailers Association contends the broader industry will continue to evolve. Hallan, who projects a strong holiday shopping season this year, spoke with MiBiz regarding his membership’s outlook for the rest of 2017 and beyond.

What’s the sentiment among Michigan retailers going into the shopping season, given the type of year that brick-and-mortar stores have had?

Retailers are an optimistic bunch. We survey our retailers every month, and in our most recent survey, 60 percent of retailers believe that they will have an increase in sales over last year. So, they’re optimistic, and I think consumers are optimistic too because they have disposable income available right now to go out and shop. The National Retail Federation predicts that holiday sales will rise between 3.2 percent to 3.8 percent this year, so they also are projecting an uptick in sales for this holiday season.

What other metrics are you watching?

What’s interesting is that 40 percent of the holiday sales occur in the four weeks before Black Friday. So what’s happening is that retailers are rolling out holiday sales earlier to try and get consumers in the stores. Consumers are starting earlier, so they’re not leaving everything to Black Friday or to Cyber Monday, (although) they’re certainly huge shopping days for retailers. … And then the week before Christmas accounts for about 14 percent of holiday sales. So yes, those two days are important, but really, consumers have started shopping earlier and that certainly helps.

There’s been no shortage of headlines this year touting the end of retail as we know it. How do you view the industry’s situation?

Retail is evolving. It’s certainly not dead. Everyone likes to picture that e-commerce is the death of retailers, but if you look at the hard data, e-commerce sales are still only 9 percent of total retail sales in the United States.

What does that say about the retailers who went under this year?

Retail is still strong. It’s the retailers that are able to figure out a niche in the market, or roll out technology and utilize that to their benefit that are going to bubble to the top. There’s always going to be an ebb and flow between retailers that are successful and retailers that aren’t.

What policy measures could help to slow the movement of consumers from brick-and-mortar retail to e-commerce?

Well, we’re doing a couple things. First of all, in 2015 we passed the Michigan Mainstreet Fairness Act, which requires out-of-state retailers like Amazon that have some sort of nexus with the state to collect sales tax for sales made to Michigan residents. Which really, it went pretty far in leveling the playing field. It didn’t get us all the way there, but it helped.

Similar legislation has stalled at the national level, correct?

It hasn’t passed yet at the national level. We’re advocating for its passage. There’s a Supreme Court case out of South Dakota that has been appealed up to the United States Supreme Court and a number of Attorneys General across the (country) have signed an Amicus brief asking the United States Supreme Court to take that case up. … So we’re hopeful that the United States Supreme Court will take that case up and reevaluate … and that will help go a long way toward having a national solution. But right now, it is a state-by-state patchwork for sure.

What other kinds of initiatives is Michigan Retailers Association involved in? 

We have a Buy Nearby campaign. What our campaign does is it encourages consumers to make purchases from retailers that are here in our state. You can still buy online, but buy from a retailer that has a website and a physical presence in Michigan, because what happens then is you’re stimulating the Michigan economy instead of sending dollars outside. 

What kind of results has that produced? 

We actually did a study a couple of years ago that found that of all Michigan residents, if one in 10 transferred an out-of-state purchase to an in-state purchase, that would account for a $900 million boost to Michigan’s economy and 7,500 jobs. So really, if … (you) make 10 purchases a year from out-of-state retailers, if (you) can direct just one of those to an in-state retailer, it’s really going to have a significant effect on our economy.

After the start of the new year and the holiday shopping season, we often see some retailers file for bankruptcy or go out of business. Do you expect to see any of that next year, either locally or nationally?

Certainly the fourth quarter is when retailers make or break their year. It’s a very important quarter for them. We think it’s going to be a successful holiday season, so we’re not expecting any large shifts in the retail industry. Without question, it’s an important metric and a time for retailers, for sure.

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Nick Manes

Staff writer

nmanes@mibiz.com

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