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Clicks vs. Bricks | Retailers struggling despite Austin's booming population

Doing business in a boomtown like Austin isn't always easy. In fact, for a growing number of retailers, it's increasingly difficult.

AUSTIN, Texas — Ninety-nine percent of all businesses in Texas are considered "small" – places that have fewer than 500 employees.

One such business is Outside in Style, which started as The Greenhouse Mall back in the 1970s.

Karen Galindo has worked at the family greenhouse business her parents started for 42 years.

“When we first moved out here on 620 in 1977, people all thought we were insane. There was nothing out here. It was a little two-lane, sleepy road with no development. Now look at us: we're in the midst of apartments and retail,” Galindo said.

A sign of the times

Now Outside in Style is closing, the latest in a long line of long-time Austin businesses to call it quits.

“We have a good business, and we love our business. We love our employees and our vendors and our customers. There's a part of me that wishes it could go on forever,” Galindo said.

You'd think that traffic would benefit a business like this – but these aren't normal times for retailers.

“There has been some degradation of brick-and-mortar in the last few years because of all the online business that's going on,” Galindo said. “So we've seen less traffic over the years, and that's been really tough. You know, I think that's been really tough for brick-and-mortar in general.”


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The "Amazon effect"

It's something some analysts have dubbed "the Amazon effect": brick-and-mortar retailers struggling against those that do business with clicks, not bricks.

During the first half of 2019, chain retailers like The Gap, Sears and Pier1 have closed 7,000 stores nationwide. Coresight Research predicts the number could hit 12,000 by the end of the year.

Another 75,000 stores could be lost by 2026, investment bank UBS said.


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That effect can be felt in Austin.

“It makes me sad because I was born and raised here in Austin, and I remember when the community was small and everyone was engaging and the traffic wasn't as crazy,” Maribel Canizales Selsky said.

Selsky just bought her second and last set of outdoor furniture at Outside in Style. Now she's thinking about all that she'll miss about Galindo’s family business.

“It has a hometown feel to it. She remembered my husband from all those years ago,” Selsky said.

The price of convenience

The changing landscape of retail moves along with shoppers' changing habits.

“I think people think about the convenience of something like Amazon. I think convenience has its perks. But if you want furniture, you want to sit in that furniture. I can't imagine. We hear a lot of customers [say], 'I tried to buy a lot online or from a catalog and when I got it, it wasn't what I thought it was,'" Galindo said.

Convenience comes with a price – something more people in Austin are starting to consider.

“Something to think about: when you shop, you vote with your money. You vote for who you want to be in business," Galindo said. "So I think if you want a lot of choices and you want to keep prices fair, then you should maybe think about shopping locally if at all possible. I think it is hard to see Austin businesses go away.”


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The closeout price deals at Outside Instyle continue through October.

At last check, the Texas Small Business Association found there are typically about 2,000 more companies that open than close every year in Texas. A promising statistic, even as 40 national retailers have announced they are closing stores this year.

But the "Amazon effect" also remains strong. Shoppers are spending more money than ever online, with U.S. households spending $5,200 online in 2018 compared with $3,500 five years ago.


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