Birmingham-based Shipt has added same-day delivery service for office products giant Office Depot Inc. The new services reach more than 200 markets and more than 60 million households.
The brainchild of Birmingham serial entrepreneur Bill Smith, Shipt was born in 2014 as an app-based delivery service, concentrating on products from Best Buy and Home Depot. Within the first few years, however, the focus shifted to groceries and the business flourished.
Shipt’s success caught the eye of retail giant Target, which bought Shipt for $550 million at the end of 2017. Part of the deal was an agreement that the headquarters would stay in Birmingham, where the Shipt logo helps light up the skyline.
Shipt operates today as a wholly-owned subsidiary of Target.
Customers pay an annual fee of $99 for delivery services, with lower introductory rates available to new customers.
With the addition of Office Depot to the product mix, customers can order from a mix of groceries, alcohol, kitchen goods, pet supplies, health care products and now office products.
“Our vision at Shipt is to deliver the products consumers need so that they can spend their time doing what matters most,” said Shipt CEO Kelly Caruso.
There’s no time for retailers to dawdle this holiday season — Thanksgiving falls late in the month so the magical period from then until Christmas is six days shorter this year than last.
Despite that, the Alabama Retail Association predicts consumers in the state will buy more than $12.4 billion in goods, which would be a 3 percent spike over last year’s $12 billion mark. Retailers are using a variety of Christmas promotions, discounts and free shipping offers to whet consumer appetites as quickly as possible.
The association’s 3 percent holiday growth prediction is for all holiday taxed sales, including those from remote sellers.
The national holiday forecast, based on such alchemy as a well-performing economy, low unemployment and consumer optimism, calls for growth between 3.8 and 4.2 percent.
The Alabama Retail Association, formed in 1943, represents retailers before state and national lawmakers. It has 4,300 independent merchant and national company members.
Brick-and-mortar retail outlets must often feel that news of their death has been greatly exaggerated.
Take Books-A-Million, which recently did a complete redesign of its store at the Shoppes at Eastchase in Montgomery. It’s been updated with new product lines, fresh layout and an all-new Café BAM, because hot beverages and reading are forever intertwined in civilized culture.
“That’s what people don’t get online, the smell of beverages, holding a warm cup of coffee in your hand and sitting in comfortable seating,” says Melanie Smith, senior director of BAM marketing. “We wanted to create a customer experience.”
And they had some fun doing it, she says. At the Montgomery store they’ll be bringing in pastries and sweets from Vintage Café to get local flavor in the coffee shop. They’ve added some softer product lines, such as apparel and cozy items like socks and sweatshirts.
“We want people to hang out in the bookstore,” Smith says.
In a nod to digital culture, there are recharging stations for phones, computers and tablets throughout the café. The new presentation is only available at a few BAM stores currently but will be rolled out to other stores one by one.
Birmingham-based Books-A-Million was founded in 1917 as a street corner newsstand in Florence and has grown to become the premier book retailing chain in the Southeastern United States, and the second largest book retailer in the nation. It operates more than 260 stores in 32 states and the District of Columbia.
Retailers across the state were honored in October during the Alabama Retail Association’s 20th annual awards ceremony. The association recognized 17 businesses with operations in 23 cities. These businesses employ a total of 791 people at 51 locations in Alabama. More than 70 businesses were nominated for the awards.
“It is an honor to be able to recognize such an outstanding group of retailers. Each retailer honored is a credit to their community and the retail industry,” said Rick Brown, president of the Alabama Retail Association.
Three retailers were honored for their longevity. The Centennial Retailers are Capitol’s Rosemont Gardens, Anders Hardware Co. Inc. and Metzgar’s.
Capitol’s Rosemont Gardens, founded by William Burns Paterson in 1892, is one of Alabama’s oldest continually operating retailers at 127 years. Rosemont Gardens stayed in the Paterson family for 94 years before it was sold to Jimmy and Myra Thompson in 1988, who renamed it. Their children, Lamar Thompson and Martha Moore, are the current owners of the flower and gift shop in Montgomery.
Anders Hardware Co. Inc. was founded in 1909 by J.H. Anders and Burwell Lewis Anders in Northport. The store still operates out of the same location on Main Avenue, although the name changed in 1921 to Anders Hardware to reflect a shift from general mercantile to hardware. A second location in Tuscaloosa opened in 2002. It is currently owned by Richard Rodger Anders Sr., the great-grandson of one of the original founders.
Brothers Melvin and Leonard Metzger opened Metzgar Brothers in 1919 inside The Battle House hotel in downtown Mobile. The men’s and ladies’ apparel store, now simply called Metzger’s, is currently owned by Ken Metzger, grandson of the founder Melvin Metzger. In the late 1960s, Metzger’s moved to Mobile’s Bel Air Mall but now it is in the Spring Hill area of Mobile.
“Retailers are at the heart of any local economy, and that’s certainly true here in Mobile,” said Bob Chappelle, chief operating officer of the Mobile Area Chamber of Commerce. “Even as we see shifts in sales channels, I believe that customers in the long run are going to choose a local retailer for personal experience, for quality merchandise and the relationship that they build with sales people.”
A panel of judges chose the Alabama Retailer of the Year winners in four categories based on annual sales volume.
For annual sales of less than $1 million, the gold award went to The Coffee Shoppe in Selma; the silver went to The Cook Store in Mountain Brook and taking home the bronze was a tie between mb greene llc of Fairhope and P’zazz Art Studio in Prattville.
In the category of annual sales of $1 million to $5 million, taking home the gold award was Fairhope Brewing Co. of Fairhope; the silver award went to New York Butcher Shoppe in Birmingham and the bronze was awarded to Village Dermatology in Mountain Brook.
In the category of annual sales of $5 million to $20 million, the gold award was presented to Leaf & Petal of Vestavia Hills; the silver went to David Dawoud, owner of nine Domino’s Pizza locations; and the bronze was awarded to Wright’s Market of Opelika.
In the annual sales of more than $20 million, the gold award went to Adams Drugs in the River Region; and the silver award was presented to Jim Whaley Tires Inc. of Dothan.
Taking home the Gee Emerging Retailer of the Year award was Ugo Convenience Delivery in Tuscaloosa. The Customer’s Choice Award went to Jennaration Boutique Inc. of Northport.
Even candles will be a Do-It-Yourself arrangement with the coming arrival of Paddywax Candle Bar at the Summit in Birmingham this holiday season.
Described as an experiential retail shop that allows guests to design and hand-pour their own custom-made candle, Paddywax comes to Alabama from Nashville. The chain has six locations open, with four more set to open by the end of the year, including the Birmingham store.
During each one-hour candle pouring session, visitors choose a custom vessel from a selection ranging in style from traditional colored glass to modern iridescent ceramics and concrete pots. They then choose from an extensive fragrance library and craft their own candle by placing the wicks, mixing the fragrance and pouring the wax.
With over 40 fragrances and 65 vessels, there are more than 2,000 combinations to be made in store. To add to the experience, there’s an actual bar at Paddywax Candle Bar with beer and wine available for purchase during the workshops, so you can sip while you pour.
The business can be used for group celebrations and corporate outings. Each interactive candle workshop costs $40 and includes one candle, which is available for pick-up three hours after the appointment or can be shipped. While walk-in appointments can be made, customers are encouraged to make reservations online for the workshops, which are offered three to five times per day.
The shop will be located in Suite 105 on 216 Summit Blvd.
As one industry observer noted, it was a simple case of a Miami-based investment firm securing capital for a retail center in Alabama on behalf of a client based in Los Angeles and New York City.
South Florida-based Aztec Group recently secured a $14.7 million acquisition loan and $9 million of joint venture equity from a Miami-based family office for Promenade Fultondale, a 208,000-square-foot, retail power center north of Birmingham.
Promenade Fultondale is currently 96.5% occupied with a tenant roster of national and regional retail tenants that include: JC Penney, Ross, Books-A-Million, Five Below, Bath & Body Works and Shoe Depot. The center, built in 2008, is shadow anchored by a Target and Ashley Home.
Aztec Group’s Brell Tarich and Charles Penan secured the financing on behalf of an affiliate of LBX Investments, based in Los Angeles and New York City, which owns in excess of 1.4 million square feet of retail space across the Southeast U.S.
Alliant Credit Union provided the fixed-rate, non-recourse loan. Aztec Group Inc. specializes in facilitating the acquisition, disposition, financing and capital needs of real estate projects for institutional investors, entrepreneurs and commercial developers, as well as offshore clients.
Former Auburn basketball star Elizabeth (Younger) Purpich returns to her alma mater on August 15 to show off her new line of luxury leather handbags, the WDE Collection.
Purpich, who graduated from Auburn in ’98, went on to a professional basketball career in Australia but is far better known as a top-of-the-line fashion designer.
Purpich, a member of Auburn’s 1997 SEC Tournament Championship basketball team, has been designing handbags under her namesake label since 2013 and has been featured at New York Fashion Week four times.
On Toomer’s Corner, on the rooftop patio of the Collegiate Hotel — offering an eagle-eye view of Samford Hall and other campus landmarks — will be the place to be for a first look at the new handbag collection. The trunk show atop the CoHo is just in advance of the official launch during New York Fashion Week on September 10.
“After designing collections for both the Texas Longhorns and the Texas A&M Aggies, the Auburn family, especially my Mom, have been encouraging me to design an Auburn-themed collection,” said Purpich, who now lives Houston, headquarters for her company, Elizabeth Purpich Collection.
Purpich, who goes by Beth, is a self-taught designer who learned from experience working with mentors in the fashion industry. She started her business in 2007 as JulieBeth Handbags. She earned an MBA in strategy and marketing from The Weatherhead School of Management at Case Western Reserve University.
Purpich’s mother, Melanie (Moore) Younger, class of ’74, played on Auburn’s inaugural women’s basketball team while earning her doctorate of veterinary medicine degree.
“I’m really excited to team up with The Collegiate Hotel at Auburn for trunk shows that champion the Auburn football experience,” said Purpich. “The CoHo location and atmosphere, combined with the support from the Tiger faithful, is a perfect fit with our vision for the new Collection. I can’t wait to meet the customers who have followed me online for the past six years, as well as introduce my brand to a wider market.”
The Collegiate Hotel — a luxury 40-room boutique hotel — will host trunk shows of the collection on select home game weekends.
Built to house an expanded women’s enrollment following World War II, the former Wittel Dormitory building was converted in 2016 into Auburn’s first boutique hotel.
Questions from Auburn Communications (AU) are followed by some from Business Alabama (BA).
AU: Do you expect Google Shopping’s plan, which would allow customers to buy directly through Google, to be successful?
I wouldn’t bet against Google, but it’s going to be a big challenge. The retail behemoth that is Walmart has been trying to catch up with Amazon over the past few years and has had very little success. Therefore, I have to wonder if Google has the capacity to pull it off. They certainly have the capitol to invest in a new shopping platform. That said, when you have an organization like Amazon whose market share and brand equity is so dominant it’s going to be an uphill battle.
AU: How would Google Shopping affect media websites that offer links to products for sale?
The lucky ones will be absorbed by Google. The unlucky ones will have to hold on as long as they can and hope that Google decides the online shopper market is too saturated by Amazon and Walmart to make a sustained move into the space.
AU: Would the customer be affected?
Not really. There are typically two types of online shoppers. The first goes straight to Amazon and searches for the product they are looking for. The second goes straight to Google to search for information on the product they are looking for. Inevitably they both end up buying the product (or not) from one of the affiliate companies anyway.
AU: How could current websites, which offer ad links to products, compete with Google Shopping?
I doubt they’ll be able to due to the scale at which Google, Amazon and Walmart operate.
BA: What are these “third-party” websites?
By third-party websites we are talking about affiliate websites — people who have their own website or have links to Amazon or eBay, and they basically get a percentage of the sales. Amazon Associates and eBay Partner Network are two of the big ones that control their own affiliate marketing. ShareASale is one of the better affiliate websites. They just track what comes to your website and they go to Amazon or eBay or Google Shopping, and when a consumer makes a purchase — it doesn’t even have to be what they initially looked at — they get a percentage of the sale. I would foresee Google Shopping creating their own affiliate type of a program just like Amazon and eBay.
BA: How will this affect small manufacturers, craft makers, who mainly sell their goods on their own websites? One such, for example, that started in your area, in Opelika, is Loyal Stricklin, a high-end leather goods craft shop.
It depends on Google’s model, which we don’t know yet exactly what that will be. But I assume it will be similar to Amazon, a lot of things to buy that are not solely offered by Amazon, small retailers linked by Amazon. Those smaller companies may be fine and may even be helped by it. If you’re on Google you’re out there pushing for a bigger market place. And there will always be people who go directly to that retailer. People may just skip the big commerce websites and go straight to the manufacturer. So I don’t see a whole lot of negative in it for them.
BA: How will it affect small retail shops with that have their own websites as well, such as the popular dress shop, in Auburn, Behind the Glass?
Probably not to a great extent. Some recent research has shown that more than 80 percent of consumers actually opt to go to a physical store — including millennials and even younger people. They still want to go into a store and touch and feel the merchandise. And if they can reach more online, it’s probably a bonus for them.
BA: How has online shopping affected how marketing is taught at Auburn?
I don’t think we are changing too much how we are preparing students. Basically, it’s introducing them to some of the newer techniques that affiliate marketing introduces and what the effects that can have on a business. At the end of the day, a lot of the traditional marketing skills that we have taught for years are still holding true in this type of economy that we have.
BA: Some critics say that is unfair monopolistic activity for a giant like Google to leverage its enterprise into a new field. The European Union has imposed regulatory fines on Google, including fines on shopping activities.
I don’t know. The way I look at it, if Google gets into this space, it just adds more competition. They are coming in to compete with Amazon and Walmart and eBay. Amazon is the 300-pound gorilla, and Walmart is trying to compete and has not been that successful, and maybe Google can be and level the playing field some. I don’t know if Google can even pull this off. They’ve got plenty of money to give it a go, but if they do succeed, they will definitely have to link to some of these smaller retailers, as well as the big box stores.
Dr. Brian Bourdeau is an associate professor of marketing in Auburn University’s Harbert College of Business. His research has appeared in Strategic Management Journal, Journal of Service Research, Journal of Services Marketing, Journal of Non-Profit & Public Sector Marketing, International Journal of Sports Marketing and Sponsorship and International Review of Business Research Papers. He won Harbert College’s Excellence in Outreach Award in 2018.