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...