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Analysis: Tourism Lures Shoppers to Rural SD Towns

September 11, 2007

Vermillion, SD – South Dakotans searching for the best furniture deals are likely to look in Aberdeen, while clothing shoppers tend to choose retail outlets in Rapid City and Sioux Falls. These are two of the findings in an analysis of retail sales and shopping trends for towns throughout the state.

Economists say retail sales are among the chief indicators of economic health, and the study shows small towns that promote tourism often attract more shoppers than larger cities. University of South Dakota School of Business Professor Ralph Brown is a coauthor of the report.

"Keystone, which has a very small population, is pulling in eight times' greater retail sales than we would expect. But Vermillion, the 11th largest city, had the lowest sales at only six-tenths of one percent, which means it is responsible for only 61 percent of the sales we would expect."

Bethany Sorenson, MBA student at USD and study coauthor, explains South Dakotans often do their clothes shopping miles from home.

"Rapid City and Sioux Falls, by far, had the largest 'pull factors' in apparel sales. They were both responsible for sales levels about 30-percent higher than we'd expect."

"Pull factor" is defined in the study as the capacity of an area's retail sales to "pull in" shoppers from outside that area, considering its population. Brown says Aberdeen's pull factor is high for furniture retail.

"Aberdeen, Rapid City, and Sioux Falls had the biggest pulls, while all the other cities scored less than one (percent). In the 'Miscellaneous Retail' category, Mitchell and Rapid City had large pull factors, probably indicating a high number of stores that tend to cater to tourists."

Professor Brown says the study can help communities develop business plans and identify shoppers' needs to become more competitive. The study appears in the South Dakota Business Review published by the University of South Dakota's Business Research Bureau.

Business owners and managers may download the report, including charts and graphs, from the USD Business Research Bureau's Web site at
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David Law/Eric Mack, Public News Service - SD