Monday, April 26, 2010

University Discount Program Hopes to Stimulate Commercial District

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.
Commercial districts need to capitalize on every competitive advantage in order to survive and thrive. Some districts are fortunate enough to be located near colleges or universities. College students can be an excellent market for several types of businesses. As reported in an earlier post (“Colleges as Partners in the Commercial District Revitalization Effort”), there are several examples of Colleges and Universities playing a major role in revitalizing nearby commercial districts.

Just outside of Philadelphia, Arcadia University is beginning to support the adjacent business district, but it is taking a different approach. Wadsworth Avenue in Philadelphia lies less than a mile away from Arcadia University, which is located in the suburban town of Glenside. Although Arcadia is very close, Arcadia students traditionally have not crossed the city line to venture on to Wadsworth Avenue. This may have been due to poor perception of the area, combined with a lack of knowledge about the businesses located on Wadsworth Avenue. In the past few years, a local nonprofit organization and elected officials have invested a lot of money in major streetscape improvements and storefront improvements along Wadsworth Avenue. This helped create a positive perception of the district among nearby residents. Businesses decided that it was time to capitalize on these improvements, and proactively market the district to Arcadia University students, staff and faculty

The Wadsworth Avenue Business Association, Arcadia University and OARC, the local community development corporation, have formed a partnership called the Wadsworth Arcadia Discounts Unbelievable Program or WADSUP - in an effort to attract both Arcadia students and staff to shop on the Avenue.

The plan is simple. Over 40 participating businesses will display an “Arcadia Students Welcome” in their storefront. These businesses offer discounts to Arcadia students and staff who show their student or staff ID. The partners determined that they would not require presenting special cards or coupons which could complicate the program, and therefore make it less appealing to students and staff. Students and staff always have their ID with them, so they can always take advantage of the discount. The hope is that this will open up a whole new previously untapped market to the business district. A program like this is simple to implement, but clearly needs the cooperation of institutional partners. In this case, Arcadia University was very eager to implement the program, and is marketing it heavily in its own publications, and created the decals. Although this program did not require a significant financial investment from Arcadia University, it still has the potential to be extremely beneficial to both local businesses and the University.

The Hospitality Index – Do You Practice What You Preach?

Danny Meyer, a well known restaurateur and author of Setting the Table, has created the “Hospitality Index” predicated on the premise that companies that make their customers, employees and community feel good are the ones that will succeed. It’s not about the “cheapest” product – even in a recession. [Excerpt from Mad Money Interview with Danny Meyer]

A complaint I often hear from commercial district managers and customers is that merchants are lacking in basic hospitality and customer service. Not all merchants (and certainly not the successful ones) need lessons in customer service. But the archetype merchant who has been on a district for decades through changing neighborhood demographics (many times both racial and ethnic) and who can barely disguise the disdain they have for their customers…well, unfortunately I have come across this merchant too many times in my work. These merchants are ready to blame anyone else but themselves for the sorry state of their businesses. As commercial district management professionals, we can usually spot them right away. Their merchandise is usually dusty, business is slow, they have an attitude and they are the first to tell us that we are wasting our time because nothing will change… “these people” don’t want quality or good service, all they want is “cheap”. The only thing you can do is walk away from those individuals and keep them from bringing you down.

As easy as this merchant is to identify, commercial district managers also need to practice hospitality and customer service towards their merchants – and sometimes they don’t do this. In this field, our work is all about relationships. But the challenge is that many district management organizations are hurt by frequent staff turnover, making it hard to build trust with local merchants, property owners and residents over time. That said, building relationships and demonstrating hospitality towards your merchants is THE MOST VALUABLE thing a district manager can do. Every successful initiative is based on merchant engagement. From cooperative marketing, to participation in promotional events, to creating a more appealing shopping environment…successful outcomes are based on merchant engagement. Here are a few things that district managers should be doing a regular basis to build relationships with their merchant community.

1. Participate in local events, particularly when working with an ethnic community. Go to their religious events or special holiday events. Offer to help with expediting street closures for their parades and activities or help them develop better relationships with public officials. Gain their trust by being available and helpful.

2. Walk the street EVERY week (every day if possible) and walk into every store on a regular basis (not just the ones who are receptive towards you). Even if you get attitude, say hi, offer your help, hand out your newsletter and walk out. In one city I was in recently, city officials expressed frustration that in many cases the local district managers didn’t know their local merchants. This has serious ramifications in that city programs such as fa├žade grants and loans never made it out the door. Although these managers spent their time putting on events – they avoided the messy work associated with engaging merchants. The result? The events did little to help merchants grow their retail sales.

3. Be flexible. If you get a last minute request from a merchant or local elected for help – do what you can to accommodate. You never know what kind of good will you are building and how it will come back to you.

If you start with these three activities you can raise your own Hospitality Index Quotient!

Thursday, April 15, 2010

Marketing District Restaurants with the Good Old Fashion Text Message...

Who ever thought the text message would be considered 'old fashioned'? In this day and age of Facebook and Twitter, sometimes simpler is better. While social media and e-mail based marketings remains a valuable and effective way to reach customers, it seems that some restaurants are finding that text messages are an even more effective (and less time consuming) marketing tool, so says MarketingVOX, a marketing website, in a recent article: "Restaurants bypas SocNets, Coupons and Email in Favor of Text".

What should text messages include?
Text messages are short, simple and more often read by recipients than the average email. Restaurants that have been using text report higher redemption rates than those that soley rely on email. And there are lots of ways text messages can be used - a local restaurant might send out a 'daily special' text to regular customers telling them about a special meal or dish, or the text might include information about evening entertainment or Tuesday night early-bird specials.

How do restaurants collect phone and/or email information?
But you can only use these cheap marketing tools if you collect data on your customers. One way to do this is to distribute a small form with the check. Interested customers can opt-in by providing their phone or email address to recieve information about events, specials and discounts available only to those on the mailing list. You can also ask customers to drop business cards to enter a raffle for a free meal. Be sure you are getting their consent when you do this - the last thing you want is an annoyed customer getting what they consider spam in their in-box.

Monday, April 12, 2010

Retail Forecast – Spring 2010

Customers Still Looking for Value
Although some say that the market is rebounding, customers are still looking for value in their purchases.

So, Who is Expanding?
Research conducted by RBC Capital Markets and Retail Lease Trac on retailers planning store openings in 2010 finds that of the top ten retailers planning to expand in 2010, three are dollar store concepts (Dollar General, Dollar Tree, and Family Dollar) and four are value-oriented food concepts (Quiznos, Five Guys Burgers and Fries, A&W Restaurants, and Burger King), with the number one retail spot going to Quiznos. [Retail Traffic, “Quiznos Leads List of Retailers Looking to Expand”]

For commercial district manager, the nice thing is that a majority of these retailers can be found along both pedestrian and automobile oriented commercial corridors.

Discount Apparel and Merchandise Remains in Vogue
Retailers that peddle discount apparel and merchandise are still finding opportunities to expand, and fortunately for us they are not shying away from urban areas. Kohl’s, a Minnesotta-based national discount retailer recently opened a new LEED-certified store in Rego Park, Queens, and they are looking for other opportunities in the New York market. They have developed a multi-story urban prototype store – Rego Park is three stories – and are flexible in store layout to meet local market demand.

Experts agree that expansion is still not that easy for many retailers – banks are still a bit queasy these days about lending money - but retailers that are well capitalized can take advantage of vacancies in the market. Many are signing leases or purchasing real estate at a fraction of the price they would have paid in the past. As long as property owners in your commercial district are comfortable with some form of market self-correction, they can position themselves to be competitive with retailers looking for well-priced space. But the bottom line is, landlords need to be flexible. If they speculate, their spaces may remain vacant for longer than is good for your district.

It’s Not Just the Chains
Smaller retailers are also looking to expand. In the New York market, Energy Kitchen, a mini-chain offering affordable healthy food ‘fast-food’ options, is looking to expand from 15 stores in the New York tri-state area to 100 stores in the northeast by 2014. They are looking for smaller spaces, from 1,000 – 2,000 sf that are already vented for cooking in and around gyms. Now may in fact be the time to approach regional mini-chains like Energy Kitchen looking to expand in your market.

Grocery Store Attraction Gains National Prominence

The need for grocery store and fresh food access has found a champion at the national level. New York State Senator Gillibrand is asking for $1 billion in loans and grants for grocery stores nationwide to building 2,100 grocery stores in communities that lack them nationwide. Gillibrand Asking for 2,100 New Grocery Stores (Crain's NY, April 12, 2010)

Non-profits have been prioritizing grocery store access for years - so this news is very exciting. In 2008, the Bay Area office of the Local Initiative Support Corporation (LISC has been championing grocery store access in underserved urban areas now for over a decade) sponsored a day-long symposium on this subject. A manual was created for that symposium, called "Grocery Store Attraction Strategies" that is an excellent primer for communities looking to attract grocery stores.

Another good resource comes from LISC's now-defunct Commercial Markets Advisory Service (where I served as Director for almost two years). While there we published a newsletter dedicated to urban supermarkets that can be downloaded here: Inner-City Grocery Stores, Myths versus Reality.

Grocery store attaction is also a growing priority for the City of New York (see my previous blog: New York City to Promote Grocery Store Development).

It looks like lots of communities are ready to jump on the bandwagon!

Monday, April 5, 2010

Ford Directs Grants Towards Arts Groups

Artists are finally getting their due. The Ford Foundation recently announced a $100 million commitment to arts organizations in recognition of how the arts and artists are often economic drivers in the communities where they reside. ("Grants Nurture Arts Space and Housing", New York Times, 04/04/10)

We all know the familiar story: artists and the institutions they serve move into a community bringing excitement and activity. With more people comes more commerce, including restaurants and retail. The cycle of activity often has the unintended affect of displacing the artists who started the effort. To counteract this trend, some of the Ford monies will be dedicated to creating affordable housing for artists. Ford recently granted Minneapolis-based Artspace Projects $1 million for an East Harlem-based project.

The story of many successful commercial districts often starts with artists who take the bones of struggling urban neighborhood, take advantage of affordable studio spaces and housing, and create a community. It's good to see an organization like Ford making sure that the artists themselves benefit from the economic activity they create.