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James Hallan James Hallan COURTESY PHOTO

Q&A: James Hallan, President and CEO, Michigan Retailers Association

BY Saturday, August 04, 2018 03:51pm

A new report by Lansing-based research firm Public Sector Consultants Inc. determined that Michigan consumers sent $18.5 billion out of state with their growing use of e-commerce. The report, commissioned by the Michigan Retailers Association, was released in conjunction with the debut of the group’s Buy Nearby campaign that aims to educate consumers on the benefits of shopping locally. The PSC report found that if consumers switched just one out of every 10 purchases to a local retailer, Michigan would stand to gain $1.2 billion annually in increased economic activity and 10,600 new jobs in the retail industry, which already employs one in five Michiganders. MRA President and CEO James Hallan spoke with MiBiz about the trade group’s focus on the benefits of shopping locally.

Why should retailers and consumers pay attention to the Buy Nearby campaign?

The purpose of the study is to try to get consumers to think before they click. Making an online purchase can send money remotely to another state. When we do that, economic activity is lost in the state of Michigan. The purpose is to try to put some dollars to the message that it is important to keep dollars in the Mitten. Dollars in (Michigan) cycle periodically and it benefits not only retailers, but consumers and neighbors and those that invest in activity. We can’t grow Michigan if the dollars are being sent elsewhere.

E-commerce continues to grow quickly based on a number of factors. Do you envision this study and the related campaign can do much to stem that flow?

I think education is the key. Certainly, buying patterns are one thing, but the purpose of the study is to say that if consumers just change one out of ten purchases (to) a local store, that would generate an additional $1.2 billion annually in economic activity in Michigan, create 10,600 new jobs and an increase in wages of about $350 million. Retail is really the fabric of the local community. It’s important for the local school, local charities. … Certainly online shopping has its place. It is going to continue to grow. The thought here is just to remind people that once in a while, we have to support our neighbors and those that have invested in local communities. This study puts some numbers to that general premise that investing in Michigan is a good thing.

This report highlights the power consumers wield with their buying decisions. What do you think it should say to the retailers themselves?

Retailers certainly need to do their part, too. They can do that through window decals, through merchandising, through in-store shopping specials, and through merchandising of products that are unique, Michigan-made, and made domestically. Try to put that message consistently out there. That’s the importance of buying local. The other important component is to remember that local sales tax is collected. A great portion of that goes to support the school system. Again, with purchases made remotely, public education can suffer (from the loss of) that income stream.

With the convenience of e-commerce and as delivery times get shorter, how do you envision traditional retailers competing?

That’s really the beauty of the marketplace. Consumers have so many different options. They can hop in their car and they can experience local ambience or the customer service that a retailer provides. (They can) exchange or return goods if something doesn’t fit, rather than have to return remotely. Clearly, remote selling online has its place in the market and that will continue and consumers are very fortunate to have that wide array.

Were there any surprises in the study’s findings?

A lot of it is just common sense. Step back and think about it: If you are making a purchase online [from] somebody who’s got a store in Colorado or wherever that may be, that is going to impact someone down the street. It can also impact the local retail community. Good retailers have a presence in both formats. They have a storefront and they have a website. The website has helped retailers because their audience and consumer base is no longer five miles, or ten minutes — it is now the world. It cuts both ways.

What dangers do you see ahead as consumers move more to e-commerce for their shopping?

(Retail) really is the fabric of the community. It’s the heart, it’s the culture … and as that starts to drip away, it could affect that core of what we have all struggled to build locally. We have to be cautious that the fabric does not unravel.

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