America’s Changing Shopping Habits

It’s not unusual these days to hear of major retail chains filing for bankruptcy or selling off assets and closing shop. But the pace those announcements are hitting the media is staggering.

An ongoing trend, and one that directly relates to the decline of brick-and-mortar retail, is the decline of shopping malls.

Though the malls might still be crowded places during holidays and busy shopping seasons, the Wall Street Journal has an fascinating graphic that shows the various companies that have vanished from malls (or existence) over the years and how the continued loss of stores inside of malls has contributed to what are more like skeletons than malls today.

It’s not all bad news. Some mall properties have been repurposed for other uses. BizVoice® magazine in 2013 looked at new uses for empty malls.

But don’t place all the blame on online shopping. This Forbes article from September asserts that, contrary to what you might think, there will be more store openings than closings this year and more due to changing consumer habits (not just online shopping).

More people seek discount and convenience, as well as experiences (food, travel, etc.) over physical items, than before. From the Forbes article:

Consumers haven’t gone into hiding and they’re not spending less. They’re spending more and there are more new stores — but tastes have changed. One of the most important things about these changes is that they are happening faster than ever before. There’s lots of reasons for that and plenty to debate about it but there’s no way to avoid the constant adaptation that’s now required. Organizations now need to be able to process new ideas at a rate that’s faster and more efficient than ever before. If you’re a legacy retailer of any kind, it’s hard to change quickly enough and that creates an opening for more nimble competitors. It’s not enough just to have something new, it has to keep evolving. That’s a challenge both for younger companies as well as the established players and it will be for the foreseeable future.

100th Student Says ‘I Can Go Back’ at WGU Indiana

An initiative from the Indiana Commission for Higher Education (CHE) has been making gains in getting more of the 750,000 Hoosiers with some college but no degree to commit to finishing.

The statewide “You Can. Go Back.” effort hit another milestone earlier this month when the 100th student enrolled at WGU Indiana through the CHE initiative.

As we reported in the March-April edition of BizVoice®, those 750,000 Hoosiers make up about 21% of Indiana’s working-age population. And reaching the goal set forth by the CHE (and the Indiana Chamber’s Indiana Vision 2025 plan) of Indiana having a 60% postsecondary education attainment rate (the current rate is about 41%) is unlikely without some of those adults with some college and no degree.

A press release from WGU Indiana adds that the nonprofit, online university offered an application fee waiver and a $100 tuition grant certificate for any student applying through the CHE campaign; a $2,000 scholarship has also been renewed for the next school year.
The CHE offers financial aid – including $1,000 grants on a first-come, first-served basis – and a matching web site to connect students with the best institution for their needs. A marketing campaign has also targeted specific demographics that are likely to return to school (in February, over 9,000 potential students targeted through the campaign had re-enrolled and almost 5,000 had been matched with participating schools).

“You Can. Go Back.” also applies to industry certifications and credentials, as well as two- and four-year academic degrees.

Additionally, the CHE partnered with Indiana employers to reach more potential returnees and is seeking more small- and mid-sized companies to sign on and encourage their employees to go back and get their degree.

Employer resources through “You Can. Go Back.” include a toolkit of promotional materials to inform employees, as well as a connection to local campus programs and other companies that offer such degree completion options for employees.

For employers interested in learning more or signing up, visit and click on “Employer Partnership Sign-Up.”

A Step Closer to Sales Tax Collection for Online Purchases

The Indiana Chamber supports SB 545 (Sales Tax Collection by Remote Sellers).

This bill takes an important step toward the Legislature requiring online retailers who have no physical presence in Indiana to collect Indiana sales tax from their Indiana customers when they make online purchases. Ultimately, one of two things must happen for the requirement to go into full effect. Either the U.S. Supreme Court has to determine that states are allowed to impose this requirement based on their economic activity in the state (and the nominal burden associated with it), or Congress must pass legislation to authorize states to require the online sellers to collect a state’s sales tax.

The issue is pending before both bodies and several states are passing legislation to put pressure on one of the two entities to act and resolve the issue. Senate Bill 545 is modeled after a South Dakota law that is under review by the high court. It is designed to put Indiana in the position of making the requirement effective as soon as an Indiana court declares the collection valid under federal law. So this remains legally complicated, but SB 545 is a thoughtful and sound approach.

Senator Luke Kenley has pursued this issue diligently for many years – doing everything possible to address the problem of the sales and use tax on these transactions going uncollected. He is to be commended for his pursuit in the past and for formulating this legislation. In-state brick and mortar retailers are put in an unfair position when their online competitors are not required to collect and remit Indiana’s sales tax (as they are), effectively giving the “remote sellers” a 7% price advantage. Additionally, Indiana’s sales tax base is diminished each year as the online sales market continues to grow at rapid rates. What’s more, this is not a new tax since purchasers are already legally obligated to report their online purchases and pay the “use” tax when they file their income tax returns. But the reality is very few people comply with this law.

The Chamber supported the bill in committee this week and, in fact, has been working along with Sen. Kenley for years to achieve, by some means, state authorization for collecting these unpaid taxes. The objective is set forth in our Indiana Vision 2025 economic plan and we just might, after years of complications, be getting closer to obtaining this goal.

Waltz: Marketplace Fairness Act a Useful Measure

Bill Waltz, the Indiana Chamber's VP of taxation and public finance, penned the following column, which ran in The Journal-Gazette of Fort Wayne.

States have the right to tax activities that take place within their borders. States do not have the right to burden interstate commerce – unless Congress approves.

The Marketplace Fairness Act of 2013 involves both principles.

The act would require online sellers who have no physical presence in a state to collect sales tax from that state’s residents. It recognizes that Internet purchases take place within the buyer’s state but that compelling the seller to collect the sales tax affects interstate commerce.

The 69 U.S. senators who voted for the Marketplace Fairness Act concluded that states should be allowed to require remote sellers to collect the sales tax. But passage in the House is uncertain as opponents raise questions. The legislation should be evaluated on an objective basis.

Here are some of the statements and claims being made about the Marketplace Fairness Act :

•The Internet tax moratorium should not be lifted

•This is a “new” tax

•This will hurt small Internet businesses

•State tax administrators will abuse their power to tax out-of-state businesses

•It will be impossible for sellers to comply with the laws of 8,000 jurisdictions

•Internet businesses will move out of the United States

•Jobs will be lost

First, this has nothing to do with the 1998 federal moratorium prohibiting taxing Internet access or imposing a new tax on the conduct of business over the Internet. This is about applying existing state laws on the taxation of retail merchant transactions.

This is not a new tax. States’ sales tax is due on Internet purchases today and purchasers are legally obligated to pay. The problem is few people do so by self-reporting, shifting the burden to all those self-reporting taxpayers who do meet their legal obligations.

As for hurting small businesses, the act has a small seller exception for any business having less than $1 million in annual sales (and this threshold could be raised).

Many of the abuse objections are refuted by the text of the bill. It expressly prevents states from subjecting a seller to “any other type of taxes, other than sales and use taxes.” It further specifies that “This Act shall not be construed to create any nexus between a person and a state or locality.”

The text also addresses administrative compliance. It contains provisions on “minimum simplification requirements” to assure some uniformity in how each state identifies what is to be taxed and at what level. It calls for a single filing and single audits within any given state. The states are required to provide free software to calculate the tax. Additionally, remote sellers are shielded from liability for inadvertent noncompliance.

There will be complications with any major change in procedure, but the act is very friendly to remote sellers. Also, it is in the states’ interest to keep things as simple as possible in order to collect the tax.

As for businesses and jobs moving overseas, Internet businesses are not likely to relocate unless the costs of production motivate them to do so. Internet businesses will continue to grow and thrive in the U.S. – and create jobs – whether or not they must collect sales taxes.

The jobs focus should be on those lost today as in-state brick-and-mortar retailers have cut back due to the unfair price advantage enjoyed by online sellers.

Opponents can suggest problems where there are none, foster doubt and cater to viewpoints that have no basis in reality. But once these questions are answered fairly and objectively, there is no good reason not to support the Marketplace Fairness Act.

Is Facebook the New Web Site?

According to this article from, some companies have scrapped their web sites (or not developed them in the first place) to rely solely on Facebook to serve as their web presence. To me, that sounds like a terrible idea for several reasons and as I recall someone, somewhere saying: "Don’t build your house on rented land." (OK, it was something to that effect — don’t remember it verbatim. I’m not a parrot.) Since it’s the side I agree with, here’s the "Cons" portion of the argument. However, read the entire article and see if you agree:

Even with cost and ease in mind, ditching a company website and relying entirely on Facebook is “a bad idea,” says social media and Internet marketing consultant Anthony Kirlew.

“It puts the business completely in the hands of Facebook,” he says. “If Facebook changes, they are now subject to their rules. If they break some rule and their content goes away, they generally would not have a backup like a website that could quickly be uploaded to a new hosting provider.”

Philippa Gamse, social media strategy consultant and author of “42 Rules for a Web Presence that Wins,” agreed. “I have an example in my book of a small business which was banned from Facebook for seven months after building a nice following,” she says. “The owner thinks it was because a competitor reported him as abusive. Whatever the truth of this, you can’t call Facebook and get things resolved, and they don’t ask for proof of any abuse reports.”

By contrast, she adds, “Only you can take down your website.”

Gamse says companies that sell things online should probably keep their websites, because research shows people don’t go to Facebook to make big buying decisions.

Although many people visit Facebook daily, Kirlew stresses that not everyone goes there. “There are plenty of people who are not on and never will be on Facebook,” he says. “This includes executives and other professionals who simply don’t have the inclination toward it.”

Even executives who have Facebook presences may never see your messages, Kirlew says, because they have staffers who manage those pages for them.

Online vs. Main Street Tax Debate Continues

The dispute over collection of online sales taxes is not a new one. The Alliance for Main Street Fairness argues that online-only retailers have a distinct advantage, but the author offers that convenience (not avoiding sales taxes) drives the buying decisions for many. TechJournal South offers analysis:

Federal law currently requires retailers to collect sales taxes in states where they have a nexus (a physical presence such as a store, warehouse or other facilities). Since Internet-only retailers do not have a nexus in most states, they are not currently required to collect the taxes.

Other states wrestling with the problem include Arkansas, California, Florida, Illinois, Indiana, Minnesota, New Jersey, Pennsylvania, Tennessee and Texas. The National Conference of State Legislatures says states lost about $8.6 billion in 2010 in failing to collect sales tax from online and catalog sales. The number is projected to be approximately $37 billion from 2009 to 2012.

Personally, we can see how buying a big ticket item from an online retailer might save a significant pieces of change, but even there, we doubt that most people buy online just so they won’t have to pay sales taxes. We buy online because it is convenient. We can do our shopping from our desks, which has inherent advantages that will not disappear when online retailers collect sales taxes.

We shop online because we often find a much wider selection available at the lowest possible prices online, whether we are looking for a book, a camera, or a refrigerator. We save gas and wear and tear on our vehicles and ourselves. But we have never bought an item online to avoid paying a sales tax.

Sooner or later, we suspect, this problem will be resolved through legal means that require online retailers to collect state sales taxes. That’s fine with us, although we think states threatening to collect years of back taxes are certainly wrong-headed as well as on legally shaky ground.

In the meantime, the way states and the online retailers are going about dealing with the problem is just causing more problems: such as Amazon dismissing its associates in North Carolina and other states attempting to use their status to say the reatailer has the physical presence in the state to create a nexus.

That move causes grief for many online startup businesses. Some larger ones actually left North Carolina when Amazon fired its state associates, and others complain it makes it harder to get that early revenue necessary to achieve outside growth funding.

Amazon is not helping matters by negotiating not to pay sales taxes even in states such as Texas, Indiana, Nevada and Tennessee where they have distribution centers.

The whole mess will likely require action on the part of the US Congress.  “The Main Street Fairness Act,” H.R. 5660 was introduced in the US House in July 2010, and it would behoove Congress to vote on the bill.

No Degree? WGU Offers Potential Solution

“I’m too busy.” “I’ve got family obligations.” “I work long hours.” “It’s too expensive.” “It’s not necessary.”

If those thoughts have ever entered your mind when thinking about getting an advanced degree, you’re probably not alone. But, if you’re one of the 730,000 Hoosiers with some college but no degree, it’s time for you to realize there are new options that combat those excuses.

If you’re too busy or you work long hours or you have family obligations that take up your daytime hours, there’s an online university called Western Governors University (WGU) Indiana that could fill the gap for you. Not only can you complete coursework whenever and wherever it’s convenient for you, you can take as many or as few classes that you can handle at a time.

How about that “too expensive” reason? As the cost is about $3,000 per six-month term and students have the option to complete their degree as fast as they can, a two-year bachelor’s or master’s degree would cost about $12,000. (WGU Indiana students are also eligible for financial aid.)

Not necessary? Ask Allison Barber, chancellor of WGU Indiana. “Our nation is now No. 10. We’re No. 10 of college graduates in the world. That’s a nationwide issue. It’s a crisis. We’re (Indiana) No. 45 in the country of people with college degrees,” she stresses.

Also, if you want to move up the ladder in your career field, chances are you’ll need an advanced degree. See? It’s necessary.

For the March/April edition of BizVoice® magazine, I got to interview Barber, as well a student and mentor from WGU Indiana and school administrators from other Indiana online institutions. Read the full story to hear more about their experiences and the potential for the non-profit online university to fill the void of Hoosiers with no college degrees.

Retail Sales Down? Try Getting Mobile

Ever since I stepped into the now, so to speak, and got a smartphone, I’ve been much more aware of the need for businesses to have mobile web sites. Even when I’m at home — why not use my Blackberry when my computer is all the way in the other room? (Some call it lazy; I call it resourceful.) At any rate, offers some food for thought that may help your retail sales climb in 2011:

Retailers without a mobile-optimized website may be missing out on sales. According to recent research from mobile and social marketing consultancy Brand Anywhere and Luth Research, 51% of consumers say they are more likely to buy from retailers that have a mobile site. But fewer than 5% of retailers have such a site.

Which retailers would benefit most? According to the study, the product categories most likely to attract mobile-commerce customers include auto dealerships (88% of mobile phone users); auto parts (65%); furniture (62%); florists (61%); jewelry, luggage and leather goods (60%); liquor (50%); sporting goods, books, hobby and music (49%); and clothing and shoes (47%). However, all categories in the study would benefit to some degree.

In February 2010, Multichannel Merchant found nearly 80% of multichannel retailers had no m-commerce presence at all, and April research from eROI showed fewer than one-quarter of marketers overall had a mobile-optimized website.

Are Computers the New Newsies?

It seems that while the newspaper industry continues to struggle to adapt to changing revenue models, news consumption in the U.S. remains fairly strong. This likely confirms what most thought, but it’s nice to put some numbers to the discussion, and hopefully serves as encouraging news for the industry itself:

Mediapost reports:

According to a new comScore release, more than 123 million Americans visited newspaper sites in May, representing 57% of the total U.S. Internet audience, as the New York Times Brand led the category with more than 32 million visitors and 719 million pages viewed during the month. The average visitor viewed 22 pages of content on the New York Times. Tribune Newspapers ranked second in terms of audience with 24.8 million visitors, followed by Advance Internet and USA Today Sites.

Jeff Hackett, comScore senior vice president, said "… even as print circulation declines, Americans are actually consuming as much news as ever… it’s just being consumed across more media," said. "The Internet has become an essential channel in the way the majority of Americans consume news content today… 3 out of 5 Internet users read newspapers online each month… as advertising rates for digital move closer… (to) traditional media, the economics of the news business… look(s) a lot more promising."

The study shows that among the top site categories where display ads appeared in April 2010, online newspapers accounted for 2.4% of impressions but a higher 6.7% of display advertising dollars. The average cost per thousand impressions (CPM) on online newspaper sites was $7, higher than each of the other top site categories and nearly three times the average CPM for the total U.S. Internet at $2.52.