Local Businesses Up Against Growing Online Sales
This week officially kicks off the holiday shopping season, but many Alabama businesses will be missing out this year.
Online retail is growing faster than brick and mortar stores, and that's hurting local business owners.
The Alabama Retail association estimates Alabamians will spend almost 10 billion dollars online this holiday season.
With some online retailers offering essentially tax free items, it's hard for local shops to compete.
Capitol Filmworks is already hitting the holiday rush with Christmas cards in high demand.
But the Montgomery company sees shoppers come in, only to turn around and buy online.
"They'll literally bring in the online retailer's information or another big box retailer information and ask to look at ours. And they'll legitimately say to us, well we want to see what you have in comparison. Oh, well the price is $5 different, or it's the same price. But we've definitely seen that happen over the years," said Keith Hildebrand, Capitol Filmworks Vice President.
The full service photo shop makes everything from 5x7's to printed mugs. Workers say it's been hard competing with online companies like snapfish.
Nancy Dennis with the Alabama Retail Association says it's very enticing for those customers to shop online, especially when you can get up to a 10% discount.
"They don't have what they call a presence in the state, then they're not required to collect the tax. That law was created, that presedence was created over 20 years ago when we didn't have the software or ability to collect those local taxes that we do now.," said Dennis.
Hildebrand says that the store has had to completely rebrand itself so it can offer more than what you get online with sites like Amazon.
"We've definitely changed our stock levels and we've changed our marketing approach in total. Instead of trying to provide an item we've stretched out to provide a service and provide classes to teach people how to use the cameras. Because they're all trying to elevate what they're using the camera for but they're not getting the training from the online retailers."
A recent study by UAB found that Alabama loses $2 billion in taxable sales to out-of-state online retailers each year.