Avoiding Common Mistakes in Retail Attraction

One of the most common mistakes I see when commercial district managers attempt retail attraction strategies is a real disconnect between the retail they want to see in the district and the availability of space in the district to accommodate those uses appropriately. This often comes from a lack of understanding of what the retailers want and need in order to develop a successful store. Understanding retailer (or restaurateur) site selection criteria is critical not only to successful retail attraction – but to a successful long-term relationship with a retailer. There is nothing worse for your credibility or the reputation of your district than significant store turnover. Turnover communicates to potential other new businesses that an area is not a good investment – and makes your job over the long term that much more difficult.

How do you figure out what retailers need and want? Sometimes they don’t even know!

Many district managers I work with are far more interested in attracting unique specialty stores and restaurants – rather than chains – to their districts. These smaller entrepreneurs are often much less sophisticated in using market and demographic analysis for their site selection decisions, which is fine. But I encourage district managers to take the time to research and understand industry standards and guidelines – yes, even for chains – to get a good sense of what kinds of spaces work or don’t work for different retail categories. This kind of information will only help you develop better talking points for any retailer you approach.

Information about retailer site selection criteria requires some research. Two good resources include:

• ICSC’s Shopping Centers Today

• Retail Traffic

Get to know your district from the perspective of a retailer/restaurateur

What are typical space requirements for these kinds of retailers? What kinds of complimentary uses would help the retailer generate additional customer traffic? Who is the target market, and do you have enough of those people in your trade area to support the business over the long-term? Tucanos grill, for instance, is looking for 7,000 to 7,500 square feet in “middle markets” with good proximity to a movie theater/entertainment. If you were to approach Tucano’s – would you be able to bring them the kind of space that would make a meeting worth their while? (Ref: Retail Traffic, 12/16/09, “Tucanos Grill Starts to Sizzle”)

This kind of information is not always intuitive – so do your homework before reaching out to the retailers you are interested in and determine whether your district fits their needs.

Work with a Local Broker – and If you Don’t Have One, Become the Local Broker

If you don’t know your district vacancies very – develop a working relationship with local brokers. Unfortunately, many districts – the market may be too weak to attract the interest of local brokers, in which case you will need to make sure you develop and maintain a very good building and business inventory (which you should have anyway!). Consider developing an on-line list of vacancies. A simple listing of vacancies like those shown here at Urban Solutions, a great Bay Area non-profit that focuses on retail attraction in difficult urban areas, is a good start.

Even during these difficult times – there are retailers seeking good deals and good spaces. But before embarking on a retail attraction initiative, take the time to figure out if the available spaces in your district are the right ones for the retailers you want!

New Report by the International Council of Shopping Centers looks at how the Recession Has Affected Consumer Spending

A link to the report outlining the findings from an on-line survey of 2,500 shoppers can be found at http://www.icsc.org/web/RecessionBooklet104.pdf

For commercial district managers, some of the more pertinent information and findings from this survey related to the effectiveness of Loyalty Programs and Special Events in driving consumer traffic. These are two very common programs advanced by commercial district managers and so deserve a more detailed look...

Loyalty Cards – People Like Them, But They Aren’t Widespread Yet
While many consumers participate in loyalty programs offered by specific retailers, only 2% reported that they belong to a mall or shopping center program, the closest corollary to a district loyalty card. This may be due, in part, to the fact that the mall-wide programs are less prevalent and less well marketed. People did remark that they join these programs for the savings – so there does seem to be an untapped opportunity to grow consumer interest in district-wide loyalty programs.

Special Events Do Drive Retail Traffic
Not surprisingly, Special Events were an effective method of enticing shoppers to visit shopping districts. 40% of those surveyed said they attended a special event or activity at a shopping center within the past 12 months – and an additional 25% reported that although they had not attended a special event, they would like to see more special events in the future. The most widely attended events included farmers markets, crafts fairs and music events/concerts – all activities that also lend themselves to more traditional commercial districts as well. Most importantly, 58% of folks who attended these events said they purchased either food or other goods during their visit. This is good news for retailers who stand to benefit from special events put on by the commercial district management entity.

Make Sure the Special Event Actually Helps Businesses
I know, it sound simple, but I have visited many commercial districts where the district manager spends months planning special events that, in the end, do little to help local businesses grow their sales. So before you run out and put on a special event – remember that these events are a good compliment to retail only when they are planned and managed in such a way that retailers are able to benefit. For example, don’t hold special events when most stores are closed. This can sometimes be a challenge - particularly in districts where business owners are used to closing early and sometimes remaining closed over the weekend. Instead, work with retailers to engage them in the event by asking them to stay open, and then make sure that you give attendees a strong reason to go into open stores (raffles and in-store events that get them through a retailers door are two options). Also, make sure the events are held close enough to where the retail action is so that you increase the chances of attendees walking into local stores. I mean, what is the point of a farmers market as a revitalization tool if it’s five blocks from your retail stores? While the park may be a great place for a market – perhaps it makes more sense to close a side street that is closer to retailers – otherwise they will not benefit from the increased traffic you are creating.

Loyalty Cards and Special Events take a tremendous amount of work and effort - so make sure your retailers are benefiting from them before taking the plunge!

For more of the survey findings, be sure to check out the report at: http://www.icsc.org/web/RecessionBooklet104.pdf