May 24, 2000

E-commerce clicks with Michigan retailers

LANSING Ð Michigan retailers' attention to selling merchandise over the Internet has risen sharply, as e-commerce increasingly becomes part of the formula for retail success.

Nearly 71 percent are either selling over the Internet or are interested in selling, up from 31 percent five years ago, according to the Michigan Retail Index monthly survey, a joint project of the Michigan Retailers Association and the Federal Reserve Bank of Chicago.

Nearly 12 percent said they currently sell online, while another nine percent are very interested and 50 percent are somewhat interested. Only 29 percent said they have no interest. Five years ago, seven percent said they were very interested, 24 percent somewhat interested and 69 percent had no interest (none said it was selling online).

"Michigan retailers' shift in attitude is understandable, given the tremendous growth of the Internet and the increased opportunities to set up shop on the web," said Larry Meyer, MRA's CEO. "This increased interest also is reflected in MRA's online shopping mall (mallofmichigan.com) which has grown to nearly 100 stores from just a handful in 1997."

The survey also found that the state's retail industry in April followed the national trend of lower sales. Only 39 percent of Michigan retailers reported sales increases over the same month a year ago - tying January 1997 for the worst monthly performance since the Index began in mid-1994. Another 15 percent recorded no change, while 46 percent said sales fell.

Optimism remains high for late spring and early summer. Sixty-nine percent expect sales to increase for the May-July period and another 23 expect sales to be as good as last year.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers. MRA's more than 5,000 retail business members operate more than 12,000 stores across the state.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index
April 2000 results

April Activity
(numbers in parentheses indicate March results)

Expectations for Next 3 Months
(numbers in parentheses indicate March results)

April Sales Activity & Expectations for Next Three Months, by Region
(numbers in parentheses indicate expectations for next three months)