The Future of Brick-and-Mortar: Essential Tips for Thriving in a Digital World

About the Guest:

Eric Anderson is a seasoned marketing expert and the head of AR Marketing, a creative agency known for its innovative strategies and client-centric approach. Specializing in retail marketing, Eric brings years of experience in helping both small and large businesses navigate the complexities of consumer behavior and digital transformation.

Episode Summary:

In this episode of Chamber Amplified, host Doug Jenkins from the Findlay-Hancock County Chamber of Commerce discusses current trends in retail, particularly the challenges and opportunities facing brick-and-mortar stores amid a booming online shopping culture. Eric Anderson, from AR Marketing, joins the conversation to explore consumer sentiment as we head into 2025, focusing on what small to mid-sized businesses can do to stay competitive.

Retail is undergoing significant changes as consumer demand shifts largely online, even as customer spending remains high. The episode highlights how many traditional retail locations, including large chains and supermarkets, are closing due to competitive pressures from online giants.

Key Takeaways:

• Several brick-and-mortar stores, including well-established chains, are closing due to increasing competition from online retailers despite steady consumer spending.
• The concept of "retail media space" involves large retailers using their media channels to attract consumer spending, a tactic small businesses struggle to compete with.
• Local businesses can capitalize on personalized service, convenient locations, unique product offerings, and community events to attract and retain customers.
• There is a hopeful outlook for brick-and-mortar locations as commercial real estate dynamics evolve and demand for physical space stabilizes.

Resources:

• Retail Story from LinkedIn: https://www.linkedin.com/news/story/store-closings-expected-to-climb-6550009/?utm_source=rss&utm_campaign=storylines_en

Music and sound effects obtained from https://www.zapsplat.com

Transcript

0:00:02 - (Doug Jenkins): Findlay and welcome to the show. I'm Doug Jenkins from the Findlay Hancock County Chamber of Commerce. On each episode of Chamber Amplified, we're examining issues impacting the local business community. From employee recruitment, retention, marketing, IT issues. It's really anything that can be impacting your business. Our goal is to give our members tips each week on at least one way they can improve operations and thrive in the current business environment.

0:00:24 - (Doug Jenkins): So if you've been paying attention to the news and let's face it, there's no shortage of news these days, we're talking more business news, in particular this time retail news.

0:00:33 - (Doug Jenkins): And when you see that you've seen.

0:00:35 - (Doug Jenkins): Some information about retail stores closing, brick and mortar stores closing their doors. Now this has mostly been on the national side of things. Big Lots comes to mind, but we've seen some local retail closures as well, or office closures, things like that. Something we definitely want to keep an eye on as a business community. Now here's what's interesting about this, or weird or whatever you want to call it. But customer demand remains high. Actually, people are still spending money.

0:01:00 - (Doug Jenkins): Where are they spending it at? Well, you already know the answer to that. They're going online.

0:01:04 - (Doug Jenkins): We're going to sort that all out.

0:01:05 - (Doug Jenkins): Our guest today is Eric Anderson of AR Marketing. He's going to help us look into consumer sentiment and give you some advice on what you can do as a small to mid sized business to combat some of the trends. Certainly shopping online is nothing new. We've been doing it for a while.

0:01:19 - (Doug Jenkins): But we're going to talk a little.

0:01:20 - (Doug Jenkins): Bit about what's going on right now and what's making it a little bit more difficult to small to mid sized businesses. Again, thanks for tuning in. If you're listening on Apple Podcasts or Spotify, you can rate and review the show there. It really does help spread the word. Now let's get into it.

0:01:34 - (Doug Jenkins): This is an interesting topic as we head into 2025. I feel like towards the end of 2024 we were seeing news about some of the bigger box retailers closing stores or filing for bankruptcy like your, your Big Lots and things like that. But looking at reports, consumer demand is there and I thought to get the pulse of where consumers are as we head into 2020. It'll be a month into 2025 when this podcast goes up.

0:02:01 - (Eric Anderson): Just yeah.

0:02:02 - (Doug Jenkins): Where are consumers at? Where are they spending money? What are their thoughts on the economy? What piques your interest as we go into the the year here?

0:02:10 - (Eric Anderson): Well, from our perspective over here at AR Marketing, we've we've seen this for about the last year, you know, as well. And I think when you reached out to me today, you were, you said, hey, what's going on with retail locations? Is there, yeah, you know, is there a problem? There's. And I think last year saw around 7,000, 7,500 retail locations closed nationwide, just in retail in general. But we know from the grocery standpoint, which is supermarket space, which we service quite highly, you know, we have about 1200 retail locations that have closed down and those are, you know, pretty decently well known names. Like I was just taking some notes earlier, stop in shops, eat well, save a lot.

0:02:58 - (Eric Anderson): They're all kind of closing. And I think a lot of that has to do with a consolidation like you're talking about into bigger box retailers. And the ability to order online is getting easier and easier for consumers, even in food, you know, which seems to me quite, you know, kind of contradictory.

0:03:19 - (Doug Jenkins): It's, it's a weird dynamic and we haven't used it a whole lot. But there are times when things are so busy, we're like, whatever, just throw it on the, the grocery delivery app and let's forget about it for today. But then there's, I don't, there's just a weird. Sometimes you're going through the grocery store and you get hit with that inspiration of oh, you know what, that would be good things like that. And you miss that when you're shopping online. Which I guess isn't to say we're against online shopping, but there's just a give and take.

0:03:50 - (Eric Anderson): Yeah. You know, and namely in the supermarket space, we service a lot of restaurants and a lot of trade associations and other businesses as well. But in the supermarket space, the, the COVID Honeymoon's over. Right. They, yeah. Supermarket retailers just absolutely endured and thrived during COVID from say 2020 through 2022, really, when restaurants were closed, forced restaurants out of business. They're trying to come back. But you think of grocery retail doing anywhere between 8 and 12x profits annually from what they used to do. And it wasn't a function of price gouging or anything like that. It was a function that there was no other place to go to get food.

0:04:34 - (Doug Jenkins): Yeah.

0:04:34 - (Eric Anderson): And so supermarkets, which were only doing about half of the business nationwide at that point, most people, I mean people were spending half their time going out to eat. It all came back home. So the terms of profitability just took off for them. So that's, you know, that period's over and, and now we're finding that retailers are having a more difficult, they're going Back to like 2018, 2019 numbers and they're having a hard time staying, you know, staying open.

0:05:02 - (Eric Anderson): Even in restaurant business. Same thing. You know, they, they opened and now they're kind of easing back due to you know, higher inflation and interest rates and things like that.

0:05:13 - (Doug Jenkins): Restaurants are tricky enough as it is with the razor and profit margins that you add in some of those other asp and it becomes a challenge. You mentioned the consolidation of business of, of where consumers are going and I'll, I'll put the article in the show notes for the podcast but specifically cited where Walmart, Amazon and Costco. It just seems to be where more and more people are gravitating towards.

0:05:38 - (Doug Jenkins): If I'm a small to mid sized business, what do I do with that information?

0:05:44 - (Eric Anderson): Well, there's, there's a space that retailers or that consumer or I'm sorry, retail operators are having a difficult time competing and that's in this new retail media space. And those are the dollars that are being spent within a retailer's own environment. Right. You know, so they have their own universe of, of media. And, and what's happening is more and more CPG companies more and more larger, you know, suppliers to Walmarts and Costco and whatnot are spending their money within these contained universe, you know. You know, and Amazon's the, the lead on that. They take close to 80% of all retail media dollars are spent within Amazon. Walmart starting to get their share.

0:06:29 - (Eric Anderson): Kroger starting to get their share. Target are starting to get their share. But as a small independent they have to or some kind of your downtown business, they have to continue to find what makes them a little different. It's usually a service level, it's usually convenient location, things like that, unique offerings, un hours events that no one else can turn on a dime and do like a small retail establishment can do. So I think those are the things that we're always trying to get our, our clients going because we service not just supermarket but convenience stores, mom and pop hardware stores, we do golf courses, we handle all kinds of clients that are but independently owned. We like independent proprietors, we, we kind of stand up for those guys a.

0:07:21 - (Doug Jenkins): Lot to dig in there. Real quick, but real quick. If you can define the retail media space just to clarification on what that is.

0:07:28 - (Eric Anderson): So a retail media space is any media channel that is controlled by the entity. Meaning so Walmart as an example, they have in store signage, they have in store audio, they have their own you know, Facebook presence, they have their website. No one can advertise. I can't advertise in that space. They have to give me permission. So they've monetized that and they have billions of users. So it's pretty easy to go to someone like a Coca Cola and say, hey listen, we can guarantee you 16 billion impressions this week within our own network.

0:08:07 - (Eric Anderson): Good luck doing that on NBC and getting it focused on your shopper. So those are, that's what retail media is. Amazon's the absolute genius at. If you go on Amazon, oh yeah, you're getting hit with like products and opportunities and things like that. But mom and pop, you know, proprietor just doesn't have the network. But they still have one. It's just not as big.

0:08:33 - (Doug Jenkins): What's interesting with the Amazon case because that's even now in like a traditional media, that's a closed media space where you're watching Thursday Night Football. Well, I can't advertise a chamber event on Thursday Night Football where at least on Monday Night Football on espn, I can buy spots on Spectrum that go in there or something like that. But for Amazon, you're either paying whatever Coca Cola is or you're not it.

0:08:57 - (Eric Anderson): You're right. Exactly, exactly. And that's what I think is hurting brick and mortar. They're having a hard time staying open because they just don't have the advertising dollars flowing in like they used to. Especially you know, your smaller retailers. You know, even a chain of, you know, we have 150 store chain out of Texas. They're a multibillion dollar, you know, retail company. Even their numbers aren't appealing to the big box, I mean to the big PPGs because they're like, but I can go over here and get a heck of a lot more, you know, better spend on my money.

0:09:33 - (Doug Jenkins): You mentioned that in store experience and service is a way to set yourself apart and to try and keep things going. It's interesting because a lot of the comments I saw on that article were like, that's where you really have to make your bones, is to make sure that whatever's happening in your store or your restaurant or even your office space, that needs to be a top notch experience for people.

0:09:57 - (Eric Anderson): Absolutely. It's got to be the pop ups with I, I think the industry that's doing it right now, the best is quite frankly are the microbrews, the local breweries. They've developed their own network. They sell each other's product, they hold, you know, tap takeovers at their facilities and they do such a great job of kind of intertwining each other and saying, hey, listen, we're a network of like, you know, minded, like providing, you know, businesses and they happily sell another business's product over theirs. And that's the kind of thing that I think a lot of independent proprietors need to do. They need to look at like items or something that complements what they do. So whether it's a hardware store and an outdoor, you know, you know, outfitter of some sort, you know, find ways to connect and, and promote one another. And that's, I think the going to be the way that these guys are going to survive.

0:10:57 - (Doug Jenkins): It sounds like what the breweries are doing are kind of similar to what hardware stores. There's the. Was the Do it center. The great. I forget the actual. I know that the Findlay Hardware location or Findlay Village hardware location is a member of that network that helps independent hardware stores kind of figure out what to put in and get discounts and purchasing power, things like that. Most associations have something like that for businesses too.

0:11:24 - (Eric Anderson): Yep, for sure. Trade associations often have those, you know, you talk about again, you know, retail space and you know, trade associations. We represent a lot of trade associations in Washington D.C. they offer those types of connections and networking opportunities within their members. But additionally, you know, D.C. finally they're getting back to work. And that's one of the, one of the. They have to go to work. And from a real estate perspective, you know that I was reading a lot of articles on real estate and we're in commercial real estate as well, is, you know, cap rates are going way up, not way up, but they're climbing and meaning it's harder and harder to make money on a, on a commercial property.

0:12:08 - (Eric Anderson): So, you know, kind of forcing people to get back to work is going to be very helpful for the brick and mortar owners. And I think that's some of the good news that we see coming at us. But when you talk about trade associations, there are people in D.C. who haven't been in the office in four years and they have to go back to an office. And you know, and not only government workers, but now that's going to help. Trade associations, lobbyists, legal groups are all going to have to kind of be there together and collaborate again, which is going to be refreshing. And so I think that's going to. And that's all going to trickle down to we've got to, you know, we've got to be there. And it's going to help brick and mortar owners too.

0:12:50 - (Doug Jenkins): We Certainly hope so. I think what I found interesting about this article and kind of where we're at is a lot of the discussion was on larger chains that have been closing locations. Again, the, the Big Lots example, stores like that even, I mean we've talked about like the anchor stores for malls for years that have been struggling. It didn't really delve into the local brick and mortar stores, things like that.

0:13:16 - (Doug Jenkins): I had someone from the Ohio Restaurant association on a few months ago and we talked a little bit about different decisions being made for a Big Lots to keep a location over than a locally owned and operated store to keep their doors open. And sometimes it's investor value on that higher end where it's just, hey, can we stay open or not? Or is this worth our time or not? When it's more on the local side.

0:13:39 - (Eric Anderson): And if it's like Big Lots is a good example of it. They're a limited assortment format. Right. And Save a lot, which is on the food side. Limited assortment format with things that aren't necessarily highly perishable. And it's really easy to order that stuff online. That's where Amazon's just, They're the. Amazon's the killer, the cat. The category killer starts with like dog food. Then it moves over to cosmetics and then moves over to paper goods. And next thing you know your washing machine's ordering its own detergent, you know, and stuff like that. And your refrigerator is doing, you know, it's its own reordering as well. Right. For perpetual inventory.

0:14:17 - (Eric Anderson): So I think if you don't have a product that's, that's, you know, highly necessary now, you know, whether it's medical related or something along those lines or highly perishable, it's going to get harder and harder and harder. I mean, Bed, Bath and Beyond, prime example. They're done. I think they closed the door finally, finally last year, 2023, you can order all that online. It's, it's. Who cares if it takes a week to get there or three days or a month, it's not going bad.

0:14:47 - (Eric Anderson): Yeah, a gallon of milk or a fresh poultry.

0:14:51 - (Doug Jenkins): And again, going back to the experience, I know if I would. Not that I play guitar because I think I'd be horrible at it. But if I go to the guitar center here downtown, the guitar ranch downtown, some expert is going to talk to me about like, hey, here's how you get lessons and maybe you won't be that awful at guitar. I don't think it would help me but. Or that. Or if I go to rhubarb. I know that, that they're going to like, hey, I'm looking for something for my wife. They're going to walk me through that and everything like that. Which I'm not going to get that experience at, on Amazon, not even at Costco. And I love a good Costco trip, but I'm not going to get that experience where someone is going to walk me through it. So it's almost like you need to align your product line with something that helps you give that experience.

0:15:31 - (Eric Anderson): Right? And it's you named, you know, you just said it with like the car to cart the tar ranch or, you know, your, your local guitar store, you know, with your sausage fingers, they're going to tell you this is the neck you need. You know, this is.

0:15:44 - (Doug Jenkins): You should play bass, put the stick.

0:15:47 - (Eric Anderson): To bass or ukulele. So. But you're absolutely right. Without that, that, you know, that local knowledge. And again, that's the local knowledge. It's the crossover of other products that make a lot of sense and that's where, you know, those guys are going to survive. I think that's why Ace Hardwares are doing so well. Believe it or not, that, that that business is doing really well. A lot of closed here locally, but a lot of Ace Hardwares are popping up, especially East Coast.

0:16:14 - (Eric Anderson): We do a lot of work with Ace as well. But it's that local knowledge that, you know, have what they need. I need it now. I can't wait, you know, three days for it to show up from Amazon. I, you know, I need to replace this part now. And so I think, you know, those sense of urgency, expertise, perishability, those types of things are going to keep retail going. And a lot of the smaller size, at least the big guys, I mean, they're running into issues with crime. They're in food deserts or they're in desert areas. I mean, there's some real concerns and you know, with, with those retailers and they get a bad rap when they leave, but the shrink is so high and they can't afford to keep the doors open due to theft and, and other things, vandalism. And it's, you know, I'm never, I'm never like rooting for the big guys, but I do feel for them when. Right over, so.

0:17:06 - (Doug Jenkins): Well, yeah, at a certain point there's, you have to figure out if it's worth your while to have the doors open and. Right, that's from the smallest business on to the largest. It's. It's not a charity, so.

0:17:17 - (Eric Anderson): Springfield, Ohio, is going through that right now. We were asked to drop a store in Springfield and we said no because we were just too worried about it. And now look what's happening. I mean, it's, you know, Kroger closes, somebody else tried to come in. They've closed it. They just, they can't handle it. It's not working. So there's going to be those instances, too. We're going to have to contend with.

0:17:38 - (Doug Jenkins): All things to keep an eye on here in 2025.

0:17:41 - (Eric Anderson): Absolutely. Absolutely.

0:17:42 - (Doug Jenkins): Eric, I appreciate you joining for us for this especially. I know you've got a loaded afternoon here. After we get done with this, if.

0:17:48 - (Doug Jenkins): People would want to reach out to.

0:17:49 - (Doug Jenkins): You and talk a little bit more on this topic or anything else. When it comes to advertising or marketing, what's the best way to get in touch with you?

0:17:55 - (Eric Anderson): Well, they can always go to ar marketing or a-r marketing.com or you just put in ar marketing now or the we're up top. You can always call me here at the agency. We'd love to help you out and, you know, learn more about a business. And we represent everyone from big to small and we love what we do and doing. Doing a pretty good job at. We're in our 16th year this year and. And it's kind of exciting.

0:18:21 - (Doug Jenkins): All right, Eric Anderson, thanks for joining us on the podcast once again.

0:18:24 - (Eric Anderson): Thanks, Doug.

0:18:26 - (Doug Jenkins): Now, one thing I don't want to do is turn this into a local versus national chains type of thing. Obviously, local businesses are great for the community. They really give community its flair. They give it a personality. They give back to the community. But let's not shortchange national chains either. They actually contribute quite a bit to Findlay and Hancock county as well. And it's not really a this versus that type of thing. It's more of an update on where your potential customers and clients are going.

0:18:50 - (Doug Jenkins): Going, why they're going there, and then.

0:18:52 - (Doug Jenkins): How you can work to remain competitive. Something to keep in mind as you're looking to do business in the area. Chamber Amplified is a free podcast for the community thanks to the investment of members from the Findlay Hancock County Chamber of Commerce. Because of our robust membership, we're able to focus on providing timely information to the Findlay and Hancock county business community, run leadership programs for adults and teenagers, and be an advocate for the area while also providing tools to help local businesses succeed.

0:19:19 - (Doug Jenkins): And if that sounds like something you'd like to be a part of, just let me know and we can talk about how an investment in the Chamber helps strengthen the community. That does it for this week's episode. If you have ideas for topics you'd like to hear covered in the future, send me an email. Djenkinsinlayhancockchamber.com thanks again for listening. We'll see you next time on Chamber Amplified from the Findlay Hancock County Chamber of Commerce.