Friday, February 27, 2009

Twelve Tips for a Recession-Proof Commercial District


Without a doubt, businesses in our commercial districts are feeling the pinch as consumers cut back discretionary spending and need to pay close attention to the bottom line, now more than ever. They can do this in one of two ways: either cut expenses or increase revenue (ideally both!). Unfortunately, district managers are in no position to substantively change store operations – so helping businesses cut operating expenses often lies outside of their purview. However, district managers ARE in a unique position to impact the commercial district as a whole, and as a result, they can help drive traffic to the district, minimizing losses to local businesses by attracting customers who are still spending.
In this economic climate, you have to find ways to make your district more competitive and attractive to customers who have fewer dollars to spend but more places to spend it. Here are a few tips to ‘Recession Proof’ your commercial district.
  1. Scrutinize your district marketing budget, even increase it, but DO NOT eliminate it. In fact, now is precisely the time to take advantage of the fact that businesses from other parts of the community are cutting back on their promotions, which gives businesses in your district an opportunity to increase their market share. Find more cost effective ways to reach your target market. Are you collecting business cards? Are you developing a mailing list? Put your district mailing list to work (and dedicate time and effort to grow it!). If you don’t have an electronic newsletter, develop one. There are many low-cost on-line email newsletters like Constant Contact or I-contact where you can promote in-store and district events and sales.
  2. Get a better sense of where your current (and desired) customers get their information, and target those media venues. A simple, well designed customer intercept survey can shed significant light on your target customer, what their needs and wants are, and what kind of media and publications they read so that you can better direct marketing dollars.
  3. Use Social Networking as a tool to grow your customer base: Are there any on-line bulletin boards or list-serves for your community where you can tell folks about sales or in-store events? Do you—and your area businesses-- have a presence on Facebook? My Space? If you can’t answer these questions – do your research and use these resources now.
  4. Support in-store events and promotional activities that give customers a reason to walk in the door of your retailers. If you’ve got a bookstore, conduct readings. If you have a specialty clothing store, put on a fashion show. If you’ve got a restaurant or coffee shop, support weekly jazz nights. Help your businesses find that competitive edge that will make a visit to their store more attractive than the next.
  5. Find ways to share costs. If you haven’t done so already, ask your businesses to direct their marketing dollars towards a joint marketing campaign of the district. For example, your businesses might jointly contribute to hire a consultant who can increase the presence of your area businesses and the district as a whole on the internet.
  6. Find cooperative ways for businesses to share costs and facilitate the contracting of services. When times are good, businesses shy away from cooperative spending because of the perceived hassle. But when every penny counts, businesses may be more willing to share expenses like office supplies, office equipment, software, printing, shipping, bookkeeping/order processing, etc.
  7. Clean house, both inside and outside of the store. Help businesses get rid of their discontinued or distressed inventory. Use this down time to clean up, organize, and refresh the interiors of your local businesses. Or organize a volunteer event to give the street and storefronts a good cleaning over the course of a weekend. Contract out for pressure washing services to clean facades and windows, paint facades, sweep the streets, replace or remove broken fa├žade or street elements. Then celebrate with a press release and event that brings people together – and be sure to get your local retailers involved by combining the celebration with a sales event.
  8. Plan for the future. Use this time to re-evaluate your strategies and tactics and get ready to take full advantage of the recovery when the time comes. If you don’t have a work plan, now is the time to think carefully about how your organization is using its resources and whether those uses are strategic and effective. Be brutal in assessing yourself. What you have been doing in the past may no longer be appropriate…needs change and so should your annual work plan.
  9. Renegotiate leases. Help your businesses renegotiate their leases – your relationships with property owners may help grease the wheels for this negotiation. This strategy works best when property owners have relatively low debt on their properties – as they are the ones in the best position to be a bit flexible because their debt payments may not be as high.
  10. Help your businesses self-assess and address problems that are affecting their productivity. Effective shopping center managers perform Tenant or “Retail Audits” a few times a year. This is a valuable service that commercial district managers can apply to their district businesses. These audits are voluntary – and give retailers the opportunity to get an honest assessment of the store. By utilizing ‘secret shoppers’, you can gather information about the state of store’s maintenance, merchandise presentation, the appearance and knowledge of sales staff and management, and the status of their inventory. You can then gather this information and turn it into an evaluation used in a one-on-one discussion with the retailer. This will help identify opportunities for improvement and ways in which the district management organization can help. For example, if the tenant audit program reveals that customer service is a deterrent to shopping in the area, a district manager might find value in implementing a retail training program. If sloppy window displays are preventing someone from going inside area stores, you might consider hiring a visual merchandise expert to work with a few business owners to improve their window and merchandising aesthetics.
  11. Help your businesses capture the benefits offered by online merchandising. A district management organization could develop something like Oakland Unwrapped (www.oaklandunwrapped.org), a website that gives local businesses an on-line venue to sell their goods. This additional revenue stream can help diversify revenue for local businesses and help them survive the downturn in local spending.
  12. And finally, help your businesses mitigate other common risks to their survival. While surviving the economic downturn is at the forefront of everyone’s mind, it is pointless to implement all of the steps above if the businesses themselves haven’t prepared for an unforeseen emergency such as a waterline break or a fire on their property. Yes, the recession looms large and is affecting customer spending—but small businesses go under every day because they didn’t have a business contingency plan in place (with things such as contact information for their most important suppliers and customers stored off-site) to deal with these unforeseen emergencies. As a district manager, think through some turnkey ways in which you might help them develop these contingency plans. You should also think about what your district contingency plan would be if a larger disaster (such as a multi-building fire or a flood) affected your commercial corridor as a whole. (Would you know how to contact all of the building owners? Would you have a way of sending news alerts to all area businesses? Would you be able to get a team in place to quickly start a clean up process?) In this already-tough market, don’t let major or minor disaster unpreparedness be the final nail in the coffin for your businesses or the district!
As the Commercial District manager, you are in the best position to serve as a conduit and facilitator for collaboration. Your businesses need you now, more than ever. This is the best time to demonstrate your value, so take advantage of the opportunity!

No comments:

Post a Comment