Want to Know More about Chain-lets in New York City’s Outer Borough?

Find out more about the 'Little Empires' the New York Times is talking about and hear from the businesses that make these retail concepts happen in emerging urban markets.

Don’t miss an exciting event (sponsored in part by Larisa Ortiz Associates) in collaboration with International Council of Shopping Center's (ICSC) NYC Alliance Program entitled “Local Chains Strike Gold in Emerging Markets” on the morning of October 20th, 2009 at the New York City Bar Association.

The panel discussion will include representatives from three metro-area “chain-lets” (Carol’s Daughter, The Greene Grape and Cookie’s Department Store) that are seeking and finding opportunities for growth in the outer boroughs. Keynote speaker Aaron Fleishaker, VP of Real Estate for Fairway Foods will also be on hand to explain how his company has taken advantage of opportunities in markets that others have shied away from. For more information and to register, please go to ICSC website http://www.icsc.org/apps/meeting_display.php?meeting=2009A13

Exploring the ‘Chain-let’ phenomenon

Many towns have them - local entrepreneurs who run successful local businesses and decide to open more, either under the same name or different names. These additional retail or restaurant outlets can be a great fit for districts where affordable rents still offer opportunities for entrepreneurs to test both new and “tried and true” concepts. From the perspective of commercial district managers, these less formulaic retail additions to the local business mix can also help create a more compelling shopping destination.


The Trend is Hitting the Mainstream Media
The New York Times highlighted this trend today in an article called “Brooklyn's Tide of Chains, Decidedly Local" . The piece explored how the phenomenon is changing the retail dynamics of Smith Street, where entrepreneurs are opening related concepts along a single street and creating a cluster of retail and restaurants that have defined the area as a regional destination for shopping and eating.

The phenomenon is by no means limited to Smith Street (although the clustering of single-owners in one area is a unique element). On a visit last year to Michigan, I visited downtown Lansing and had dinner at wonderful restaurant called Tavern on the Square, located in the heart of downtown on one of the city’s most attractive historic streets. A little investigation uncovered the fact that Tavern on the Square was but one concept of a restaurant group called Urban Feast. With four restaurant concepts in Michigan, all located in emerging downtown areas, this restaurant group is helping to revitalize long overlooked commercial districts. Although I wasn’t formally scouting for retail prospects at the time, I immediately thought my client in Grand Rapids (the Michigan outpost of the Local Initiative Support Corporation), when I realized that Urban Feast also had a concept called Grand Woods Lounge in downtown Grand Rapids.

A visit to Grand Rapids to help train a local group of community leaders in the use of “neighborhood market profiles” (a wonderful market data product originally created by the non-profit market analysis firm MetroEdge for the City of Chicago) afforded me the opportunity to visit the Grand Woods Lounge. In another interesting stroke of luck, one of the workshop participants knew the owners and indicated that they are in fact looking to expand with the addition of other restaurant concept in the area. What an exciting coincidence! We used the opportunity to discuss how the market profiles they had just received could be used to make the case to Urban Feast that some of their commercial districts were ripe for new restaurants. For more information on LISC MetroEdge, go to their website at: http://www.metro-edge.com/

Welcome to our newest Commercial District "Advisors"!

In August, the Commercial District Advisor put out a call for new 'Advisors' to contribute to our blog and quarterly newsletter. This is part of our growing effort to make sure the information on this site is useful to our readers and deeply rooted in the newest research and practitioner expertise available to the field. We were so pleased by the reaction from our subscribers!

Today we are happy to announce three new Advisors who will be contributing to the blog regularly. These practitioners and institutions face the challenges of commercial district revitalization every day with great passion and commitment. We hope you will join us in welcoming their input and expertise to the blog!

Practitioner Advisors

John Ungar

“My passion is making business owners get excited about their business again and encouraging them to make improvements that will increase their revenues.”

John Ungar has worked in the community development field in for 12 years and is currently Executive Director of the Mount Airy Revitalization Corporation. Over the course of his career, he has overseen business improvement efforts on three different commercial corridors in Philadelphia. His experience includes business recruitment and retention, implementing façade improvement programs, special events, providing technical assistance to businesses and to business associations, and implementing large scale public streetscape improvements.

Institutional Advisors

Social Compact
Social Compact is a nonprofit, nonpartisan coalition of business leaders from across the country committed to promoting successful investment in lower income communities. Working in close partnership with community and corporate leaders over the past decade and a half, Social Compact has pioneered the “DrillDown,” a methodology to analyze inner-city markets and create accurate, business-oriented profiles of “emerging” neighborhood markets. Drawing on business disciplines and community strength, these DrillDown profiles have a strong track record of catalyzing sustainable, private investment, benefiting communities and businesses alike.

LISC MetroEdge
Since 1998, MetroEdge has been at the forefront in collecting and analyzing a wide variety of local and specialized data sets and is one of the leading pioneers in developing urban metrics that often demonstrate untapped demand in urban markets. MetroEdge has demonstrated success in combining the power of national and local market data with strategic technical assistance and consulting services in its efforts to help non-profit commercial district management entities and public sector clients move effectively from planning to implementation.

Seven Reasons Why Your Market Study is Gathering Dust on a Shelf

Contributed by LISC MetroEdge

LISC MetroEdge is a non-profit market analysis firm and one of the leading pioneers in developing urban metrics that demonstrate untapped demand in urban markets. They provide market data coupled with strategic consulting services to non-profit commercial district management entities and public sector clients.

A few years ago, Accenture, a management consulting firm, launched a campaign featuring Tiger Woods. One of the print ads that jumped out at the MetroEdge team was the one that showed Tiger Woods in a moment of deep thought holding a pad of paper. To his right is a vertical line that ‘maps’ his thought process. It simply says 40% Information/60% Interpretation. The analogy to commercial district market analysis was strikingly clear to all of us. So many communities spend significant time gathering market data, but then fail to do what is arguably more important than the data...interpretation and action based on the information in hand. Instead, the studies they undertake sit somewhere on a shelf gathering dust. When someone finally wants to use the information, it needs to be updated because the data has already gone stale!

Most of the time, our work at MetroEdge is with communities that have never engaged in the rigorous process of information-based decision making. Instead, they have pursued ‘gut-based’ decision making that is based more often on whim than fact. Take the community with no grocery store within its boundaries. In community meetings, residents clamor for a grocery store they can walk to. The decision is made that the local community organization will pursue a grocery store operator for a piece of vacant land, all without every asking a critical question - is there enough unmet demand in the market to sustain a grocery store? The end result can sometimes be years of wasted resources, both human and financial, in pursuit of a vision or goal that at the outset was quite difficult, if not impossible to attain.

We try hard to help communities make better decisions, ones that help local community organizations and government agencies avoid the wild-goose chase in pursuit of unattainable outcomes. This process begins with not only helping communities gather good, accurate information about their market, but more importantly, by helping them INTERPRET and then ACT on this information.

In our experience, there are a few ‘market analysis’ pitfalls that communities might try to avoid. So here they are…

Seven reasons why your market analysis is gathering dust on a shelf

1. Most market analysis is well intentioned, but it stops at the 40% information point. Communities are often left hanging without much guidance when it comes to interpreting data and then making the hard decisions around resource allocation required to to use the information to take appropriate action.
2. The consultant never visits the market, and therefore the information gathered and presented doesn’t reflect the real qualitative differences in your community. Quantitative data, like census data or other demographic data, notoriously misses the market, especially in urban markets. Without a site visit, a consultant may find it difficult to tell and incorporate the ‘soft’ side of the analysis. For example, are you actively addressing any crime problems with a local beat cop? Are there local merchants who are taking care of their storefronts and helping to coordinate district-wide advertising campaigns? Is there a retailer that, despite the odds, is attracting a larger than expected market share? Is there significant development on the drawing board that will change community dynamics? All these questions will not be answered by data that reflects a snapshot in time – regardless of how fresh the data is.
3. Lots of data, with little to no interpretation that tells you what it MEANS. Numbers are only one tool in your arsenal. As a smart man named Albert Einstein once said “Not everything that counts can be counted, and not everything that can be counted counts." Sometimes too much information gets in the way of making sure the data gets utilized by players on the ground.
4. The report drops on the floor with a loud thud. Most people see a pile of paper and think, “I’ll look at that later when I have time”. We saw this problem so much over the years that we have taken a radical new approach to market data – we stopped creating traditional written reports for our clients. Instead, we create a succinct executive summary that helps clients figure out what data is important, and what isn’t. This is something that can easily be distributed and absorbed by most stakeholders. We also provide a powerpoint presentation that presents our findings, analysis and interpretation (including all of the data gathered) in a way that can be used by the client as a communication tool for the purposes of building coalitions and attracting additional stakeholder support. We fully expect our clients to take the presentation, pull it apart and customize for different audiences.
5. Stakeholders were never engaged in the process, so they got the report at the end and didn’t even read it. Good consensus building can and should be accomplished during the process of gathering market data. Don’t miss the opportunity to do so. At MetroEdge, we insist that our partners identify and engage a ‘stakeholder’ committee to help collect data, hear our findings and provide feedback on what interventions these findings begin to suggest for the group. What we have also found is that in communities where successful commercial revitalization action may require action on a contentious issues, the failure to collaborate means that not everyone is necessarily in agreement of the baseline facts, or worse, they read and interpret those facts differently than their peers and come to different conclusions. Arguments ensue and nothing gets done. What works much more effectively, is to engage your stakeholders in a process by which 1) the stakeholder group first agrees to a set of questions they want answered by the study; 2) the group then selects a consultant they collectively trust who is responsible for producing the market data; 3) the group then listens to the information provided by the consultants; and 4) the group uses this agreed upon baseline information to develop solutions that incorporates the market data obtained and the interests of the stakeholder group.
6. The analysis is not connected to an on-going planning or visioning process. Someone told you needed a market analysis, and you did it, but now you don’t know what to do with it.
7. The analysis did not end with a set of concrete interventions that reflected the on-the-ground reality of available resources (both human and financial). Instead, the outcome was a laundry list of implementation items, rather than a set of clearly identified strategies with roles and responsibilities identified. We recently worked in a community where a market study resulted in laundry list of 'to do' items on a 10 page spreadsheet. The list included great ideas, to be sure, but it didn't help the district manager figure out which of those ideas were the MOST IMPORTANT of the bunch. Every concept was treated equally, leaving the manager overwhelmed and with no strategic direction about how to move any of the action items listed and in what order.

A market analysis is like a hammer in a tool box. Like any toolbox, it takes more than a hammer to build a market. And in our opinion, interpreting the data is even more critical than having the data in the first place…

For more information about LISC MetroEdge please contact Jake Cowan at JCowan@lisc.org or go to our website at http://www.metro-edge.com.

The Future of Retail: Is the Recession Shopper Here to Stay?

By Larisa Ortiz Pu-Folkes

Larisa Ortiz Pu-Folkes is principal of Larisa Ortiz Associates. She brings over 15 years of international, national and local experience as both a consultant and practitioner to the field of commercial district revitalization.


What a great weekend! I just returned from presenting and moderating at the annual International Downtown Association (IDA) conference in Milwaukee, WI. Over the next few weeks, I'll be sharing some of the insights gleaned from some of the sessions I attended on business improvement districts and downtown revitalization.

The session I moderated, entitled "Retail Graduate School: Retail's Future" had two very knowledgeable speakers, John Archer of Urban Marketing Collaborative and Michael Stumpf of Place Dynamics, both of whom addressed significant retail trends that are poised to fundamentally change the way we approach downtown revitalization in the years to come.

Is the Recession Shopper Here to Stay?
As experts debate the impact of shrinking consumer confidence and spending power over the long haul, both Mike and John believe that there are deep fundamental shifts in demographics, employment and consumer trends that go deeper than any short term impact we might see from the current recession. A few trends that readers should keep in mind include the following:

• The market is aging. As the baby boomers (what one speaker called the 'reluctantly aging') pass their peak earning years, they are by necessity spending less. This aging consumer is more likely to focus on 'wellness' and increased spending on health care.
• Consumer spending habits are changing. Admittedly, we don't yet know whether this will help local mom-and-pops or big chains more, but according to the research presented, retailers hoping to squeeze every possible shrinking dollar from customers can't afford to ignore the multitude of ways that shoppers buy these days. That means a retailer must have a bricks and mortar AND internet presence AND catalogue presence to increase their bottom line. Consider this...the average shopper who buys from a retailer whose goods are only available on-line will spend $157 annually. But if that same retailer also has a bricks-and-mortar location, annual spending by that same shopper jumps to $485. This is good news for our commercial districts - they will continue to be relavent as these consumer buying shifts take place.
  
• Less aspirational shopping. The jury is still out on whether shoppers newfound interest in 'less is more' will outlast the recession. But our panelists suggested that even after the recovery, credit will never flow as easily as it did before, resulting in spending power that reacheds only 85% of pre-recession levels.
• Dual-Earner Households will command the marketplace. As we all know, dual-earner households have less time to shop and shop on weekends by margins of 2 or 3:1 over traditional households. And what does traditional mean these days anyway? This all begs the question, are the stores in our district catering to these dual-earner households? Are they open when members of these households need to shop? Do they provide convenience and speed of service? The writing is on the wall for retailers who ignore the households where the money is...

These trends go beyond the current spending habits of the typical 'recession shopper' - and we should clearly begin taking them into account as we plan for the future of our commercial districts.

The Merchants Fund – A Friend to Philadelphia Businesses

By John Ungar

John Ungar is Executive Director of the Mount Airy Revitalization Corporation. He has worked as a community development practitioner in Philadelphia for over 12 years.

As commercial district managers and advisors, one of the biggest challenges is getting business owners to make improvements. Skeptical business owners may not see the benefit of making their storefront more attractive. Even if they do, they often lack the desire or ability to make the investment. Often, the only way to make these ideas a reality is to help secure funding for the project. Depending on the neighborhood where your commercial district is located, government resources may be available. However, there are many communities where businesses are not eligible for government funding is not available, but they still need financial help.

The Wadsworth Avenue commercial district, located in the East Mount Airy section of Philadelphia is one such case. Wadsworth Avenue is the main shopping district for this stable middle-class African-American community. The Mount Airy Revitalization Corporation (MARC) manages the commercial district. MARC had completed major public streetscape improvements such as lighting and landscaping, but many of the storefronts still needed upgrades.

The City of Philadelphia offered resources to businesses on designated commercial districts in low to moderate income neighborhoods. However, Wadsworth Avenue businesses were not eligible because of the income level of the surrounding community. Fortunately for Wadsworth Avenue and similar commercial districts, Philadelphia is home to a small foundation dedicated to helping small businesses. The Merchants Fund has played a key role in supporting Wadsworth Avenue businesses where other resources were not available.

Patricia Blakely, Executive Director of The Merchants Fund, understands the needs of small businesses and their important role in our community. “Small business is the backbone of healthy communities and a vibrant local economy. Buy local is not just a catchy marketing phrase; it is about the building blocks of our economy and keeping money flowing.”

MARC directed several businesses to submit grant requests to The Merchants Fund. In just over a year, six businesses on one block received grant awards. In addition, The Merchants Fund awarded MARC a grant to hire a marketing consultant to conduct customer surveys and “mystery shopper” reviews. The project helped merchants engage customers, evaluate the customer experience and improve their customer service. The results of these grants are clearly visible to shoppers.

Most of the businesses used their grants to make major improvements to their storefronts, including Lee's Boutique, shown in before and after images at right. Many business owners were then inspired to invest their own money to complete their projects. Area shoppers have responded positively, and many of these businesses have reported an increase in sales and new customers. By working with businesses one at a time, The Merchants Fund has helped fuel the district’s revitalization. “Wadsworth is more vibrant each time we help a store or restaurant owner. “

An International Model for Filling Retail Vacancies?

Vacant retail spaces are a challenge on many commercial corridors. Keeping those vacancies from negatively impacting retail sales for the rest of the district is increasingly critical to the health of these districts. As folks in the field know, the impact of vacant storefronts creates a “spillover” effect that reduces overall foot traffic and contributes to a perception of the district that can hurt other businesses in the district. Lower retail sales hurt the tax base and can put struggling businesses over the edge...resulting in more vacant storefronts. Finding creative ways to fill these vacancies, even temporarily, is an important on-going strategy for commercial district managers seeking to prevent this downward spiral. While this is not a new topic for readers of this blog, I was pleased to see a recent article in the New York Times ("Pop! An Empty Shop Fills With Art) that speaks to this trend. Landlords also chimed in on the benefit of filling these spaces with non-paying/low-paying tenants. One landlord mentioned the added value of having the spaces occupied as they provide opportunities for other potential tenants get to see the space in use.

The British government has also begun to engage in this effort. They have created a $5 million dollar 'revival fund' that helps "hard-hit areas to transform empty shops into something useful, like showrooms for local artists" in addition to an $800,000 fund to "help artists and arts organizations turn vacant high street shops into artistic spaces." Could this be a model for hard-hit communities here in the US?