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Mobile’s Economy is on the Move

Past meets present in downtown Mobile where the RSA-towered skyline lofts above the Fort of Colonial Mobile, with roots some 300 years old. Photo courtesy of Alabama Tourism Department/Chris Granger

For centuries, Mobile County has been Alabama’s connection with world commerce. Increasingly, its economy is based on moving things in and out.

Airplanes arrive in pieces and fly out as fully assembled jets. Lately, aerospace developments involving Airbus have been making the most business news, but shipbuilding remains strong as does manufacturing.

Items that will line the shelves of some 800 Walmart stores are shipped to a new regional distribution center to go on to other distribution centers. Cargo of all kinds comes and goes via water, railroad and truck. Jobs multiply to keep everything moving. From steel mills to beaches, the Mobile County economy is diverse, and it’s international.

The Mobile County Public School System remains the county’s largest employer, with 7,500 workers. The University of South Alabama, with its medical school and expanding health care system, is in second place with 6,000 workers. And Infirmary Health — with its flagship Mobile Infirmary in the city — remains the largest non-governmental health system in Alabama.

The single biggest economic development has to be Airbus, not only because of a second final assembly plant for the A220 jet that is under construction next door to the original A320 series plant, but because even more suppliers and other associated business are coming in, creating even more new jobs. It’s all happening even faster than Bill Sisson, president and CEO of the Mobile Area Chamber of Commerce, had hoped.

“The main thing is that in aviation aerospace in particular, that sector is probably going to grow faster, fill out more quickly than we had anticipated,” Sisson says. “What’s also good news is that both of those aircraft, the 320 line and the 220, are very hot-selling aircraft. For them to be here in Mobile, that just bodes well.”

The county also is seeing growth in shipping, shipbuilding, steel manufacturing, distribution facilities, construction, business incubation and health care, among other sectors.

“That’s the beauty of our economy here, it’s so diverse,” says Mobile County Commission President Connie Hudson. “We’re seeing some steady growth across the board in all sectors of our economy. Even when one should dip, the others aren’t.”

Local and state governments, along with the Chamber of Commerce, have established a record of working together in economic development over the last 20 years, regardless of politics or who occupied what public office.

“I think we are all like-minded when it comes to successfully recruiting business and industry to the state and particularly here in Mobile,” Hudson says.

Sisson says Mobile is the right size to present a united front in recruiting new businesses, and the considerably lower cost of living is a major factor. “When a business prospect is looking at this area, all the partners are at the table extending help,” he says.

What happens next? More aerospace, more transportation, more port-related development and more business incubation, Sisson says. “We’re seeing more and more distribution activity related to the container terminal. That’s certainly very promising and that’s happening simultaneously with what’s going on in the aviation-aerospace sector.”

The chamber will be moving into talent development and recruiting for the labor force, as well as for new business, he says. A recent chamber-commissioned study of the labor force revealed that 5,000 new, high-paying jobs had been created in the area in the last four years.

Mobile City Council Vice President Levon Manzie cites Airbus, Austal USA’s contracts for the U.S. Navy and Continental Aerospace’s new facility in saying, “The sky’s the limit.” But he’s especially excited about the new Mobile Downtown Airport at the Mobile Aeroplex at Brookley, where Frontier Airlines has begun passenger jet service to Chicago and Denver.

“The eventual movement of the airport to Brookley Field Complex is going to be big for the city of Mobile,” Manzie says. “Eventually you’ll see all the airlines follow suit, and they’ll build out the total complex.

“I believe the next 10 years will be game-changing years for the city of Mobile.”

Jane Nicholes is a Daphne-based freelance contributor to Business Alabama.

Auburn Marketing Expert Eyes Google Shopping Rollout

Dr. Brian Bourdeau

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.

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