As economic experts begin to suggest that the recession is over, we know that the recovery is not yet an ‘equal opportunity recovery’ for all commercial district retailers. Our commercial districts continue to see higher vacancies and our merchants continue to face challenges. The good news is that some retail sectors are beginning to see a rebound as consumer confidence has increased. As a commercial district manager, you are in a good position to help both merchants who are benefiting from this new found increased demand, as well as those merchants looking for ways to reduce costs as demand for their merchandise continues to fall or remain stagnant.
Necessities are Where It's At
Consumers do seem to be ramping up purchases, but they continue to focus their spending on goods and services that can be justified as ‘necessities’, like shoes. According to this New York Times article, "A Not-So-Guilty Pleasure", people are spending money on moderately priced shoes in part because it is a less conspicuous splurge, and certainly a more affordable one, than other kinds of splurges. And as folks decide to spend more time close to home engaged in low cost activities like hiking, walking, sports – they need more rugged shoes. This trend means that the local shoe store in your district, whether a locally-owned shoe store or a Payless, is likely poised to benefit from increased consumer spending. A targeted marketing campaign to help retailers who sell these moderately priced necessities would be well suited to today’s economic reality.
Still Not Much Good News for Stores Selling Discretionary Goods
Jewelry stores, on the other hand, are suffering, according to this Wall Street Journal article, "Jeweler's Outlook Lackluster". To survive, many stores are changing their product mix to meet demand on the lower end of the spectrum. Instead of costly jewelry, consumers are purchasing less expensive sterling silver, for instance. Jewelry remains for many a luxury or discretionary item that can be cut from the budget. Unfortunately, as the WSJ article points out, jewelry vendors that are making it are, in some cases, succeeding in part because they are closing down their storefront shops and selling entirely over the internet. Not good news for commercial districts. But this move allows them to cut operating costs dramatically, both in terms of occupancy costs and staffing.
So, keeping a jeweler in your district may mean helping them reduce their footprint and operating costs. One option that might entice some merchants to stick around is figuring out ways for them to rent counter space within other establishments. In my community of Jackson Heights, Queens, a very nice local jeweler/gift shop is located within an art gallery/frame store. The merchandise mix is actually quite complimentary. As customers wait for their order, they can peruse the store for framed art, gifts and antique jewelry. A great way to help two business owners reduce their occupancy costs – while also ensuring your district retains a healthy and balanced retail mix.