ROMANCING THE STORE
Going shopping for retailers? Here are 10 things to know:
1. Get your hands on the same detailed consumer data the retailers are using. Fill holes in that data with on-the-ground intelligence. If your community wants a hardware store, find out the number of home renovations and building permits that have been issued. “It’s important to know what metrics these folks are using,” says Alyssa Stewart Lee, head of the Urban Markets Initiative at the Brookings Institution. “What your ground truth says about a place can inform their decision matrix.”
In Kent, we hired Buxton Company to dig into our trade area data and do a better job of identifying who we are and what we have to offer prospective retailers. Buxton is one of the industry leaders in this type of data mining, and I’ve been pleased with their work. They’ll be presenting their findings at City Council on April 11th, and I’ll upload a copy of their Retail Assessment for Kent in the final installment of this retail series.
2. Time is money. Chains face tremendous pressure to expand locations quickly. They’ll skip your town if the permitting process is too long and complicated. “Stores have to open to keep their stock prices rising,” says retail consultant Robert Gibbs. “A development director for a chain is told to open five stores in a region by a certain date, and if they don’t open he gets fired.”
We make a point of advertising the fact that Kent is “right sized” which is our way of saying we’re a medium sized city with small town convenience and access which is critical for expediting projects. Our staff is experienced and our processes are flexible enough to work at the speed of your business plan. And probably most importantly, acquiring land has been the greatest handicap for previous development projects in Kent, so the city is busy looking for opportunities to assemble land now, so that developers won’t have to wait when they’re ready to roll.
3. Be realistic. Retailers simply won’t go where they can’t find a critical mass of customers. It doesn’t matter how much a few vocal people in the community may want them. “At the end of the day for retailers, locations are data-driven decisions,” says Joseph Fackel, vice president of the Buxton Co. “If the data doesn’t line up, they don’t do the deal.”
That’s why we hired Buxton (see item #1).
4. Make a retail master plan. Know what types of businesses your community can support (see No. 1), and have viable development sites ready to go. “Cities should have a written policy saying they want to be competitive and gain market share,” says Gibbs. “And they have to have a public parking strategy.”
The BiCentennial Plan laid out a great vision for what “could be” for downtown Kent Click Here. We’re working now on operationalizing that vision into specific objectives, e.g., entertainment district, arts and culture, dining, niche retail, etc. In other words, we haven’t done a formal retail master plan but we’re definitely heading in that direction.
5. Don’t fight the chains. Instead, work with locally-owned stores to help them survive. If mom-and-pop can’t afford high rents in a newly revitalized area, help them relocate to another part of town. Or, offer low-interest loans to help successful local retailers expand into chains themselves. Don’t forget: Starbucks was once just a small Seattle coffee shop and Wal-Mart a single store in Rogers, Arkansas.
In both policy and practice the city has held firm to maintaining a good mix of local stores and national names. For example, the agreement with the last developer that tried to revitalize a block downtown required a minimum of 40% of the new development to be local stores. But this is more than just looking out for the “little guy,” this is really the basis of Kent’s retail niche. The thing that differentiates Kent retail from the strip malls in the suburbs around us is the fact that we have some unique stuff. Face it, if people want the big box stores there’s more than enough of them around, but if they want something different, they come to Kent.
6. Mix uses. Retail often follows other functions and activities. So the best retail strategy sometimes has nothing to do with retail. It has to do with housing, entertainment and culture. “Stop thinking so much about sales tax dollars,” says retail developer James Kaplan. “And think about ways and reasons to get people into town.”
Here again, the premise of the city’s revitalization strategy downtown is all about mixed use. It’s taking the living center concept and putting it in a downtown square that mixes retail, dining, services, entertainment and housing. To succeed, downtowns have to be multi-dimensional and that’s exactly what we’re working towards. For example, take a look at the Right Dimensions concept Click Here or the promotional piece that we’ve tried to pitch to developers Click Here to get an idea of what we mean.
7. Invest in the public realm. Retailers may be leaving shopping malls for more urban settings, but they still want a predictably clean environment where their customers feel safe. Lighting is especially important: 70 percent of all sales occur after 5:30 p.m. “Cities need to have high design standards for signage, lighting and building design and be willing to enforce those standards,” says Gibbs.
The City has been working for the last decade with property owners downtown to upgrade the streetscape (like the old style, pedestrian scale light posts, the trees, the flowers, the brick pavement, etc.). Even this past year we repaved alley 3 to cheers from the adjoining merchants. Plus, we continue to look for a more effective signage program and thanks in part to some of the classes at Kent State, there’s a number of sign concepts out there that look great (the challenge now is figuring out how to afford them). And lastly, the City worked hard to create the Main Street Kent program, in part, because we believe it can provide the kind of focus and horsepower to actually lead more environmental improvements downtown.
8. Consider incentives. Retailers won’t go where their customers aren’t — see No. 3. But many chains are risk-averse and are unwilling to locate in unproven markets without a little help. Plus, anchor stores are accustomed to cutting deals on rent at shopping malls. “Bigger-format retailers come with an expectation of lower rents,” says Paul Levy, president of the Center City business improvement district in Philadelphia. “In most cities, they’ve been able to get their way. That’s the reality of the marketplace.”
We’ve worked hard in the last 10 years to make sure we have all the incentives in place so that we’re ready when we have a chance to use them with a developer. From Tax Increment Financing, to facade grants, low interest loans and tax deferrals, the City has all the tools in the tool box, now we just need to find the right project to package them with.
9. Be patient. Although retailers are often looking for fast returns, many also plan for expansion several years out. Retail recruitment efforts may not pay immediate dividends, but relationships formed now may pay off five years from now.
We understand this, and that’s why we continue to reach out to developers to talk about Kent. But I’ll admit to being an impatient sort, I want to be working a project right now.
10. Keep up with the times. Retail trends come and go like women’s fashions. But you can’t hide a dead Marshall Fields or Tower Records in the back of the closet. Enclosed malls are out. Lifestyle centers are in. What retail concept will be hot next?
Lifestyle centers, main street, and university cities are “in” — what more could we ask for? So now is clearly our window of opportunity to pull Kent out of transition and get it headed in an entirely new direction that is right in line with the times.