Monday, August 26, 2013

I just loved this article ("Strip Malls Turn Heads", Realtor Mag, July 2013) on how vacancies are declining at strip malls - which are basically the equivalent of neighborhood shopping districts. There were so many juicy nuggets of information that I took the liberty of extrapolating the take away's that I think are most appropriate for commercial district managers. These retailing principles apply whether you are trying to manage a strip mall or a neighborhood shopping district...

- Offer goods that people don't want to wait a day or two to get. 

  • “Even in the age of online retailing, there are some items you don’t want to wait a day or two to get.” 

- Combine destination and service. 

  • “Today, centers need to merge convenience with destination and services that can’t be obtained through an online channel. A good location isn't sufficient.” On some of the more successful corridors I am seeing more and more services. It makes sense, given that these are things that people cannot get online. 

- Placemaking matters.

  • Shopping centers must create “that right third place after work and home where people want to congregate. It’s by far the best way to increase traffic to the entire center". For commercial district managers, this means taking care to ensure your public spaces are safe and compelling places to spend time. Third-places also include coffee shops...and important addition to a neighborhood shopping district. 

- The importance of tenant mix.

  • “Choosing the right tenants is more important than getting the higher rent. If you create a dynamic mix in which each tenant shines and complements one another, you create an environment that generates more sales and traffic than each tenant alone. Ultimately, higher sales will generate higher rental rates.” I couldn't agree more. This is a critical message that commercial district managers must continue to hammer into the heads of property owners. Improving tenant mix in a commercial district is the equivalent of a tide that lifts all boats. 

- Even 1/2 block matters when retailers select locations. 

  • “Many tenants—even smaller ones—are willing to wait and even pay more for the right location". We never assume that every site within your district is the same as every other site. Instead, we like to do a block-by-block analysis to determine exactly which blocks are right fit for the right kind of retailer.  We've learned the hard way...some retailers will only take a corner location at a subway entrance. For others mid-block is fine. This is why keeping a prospect  database is key to successful retail attraction efforts. You may not have the right space for a tenant today, but in a few months you'll have just the right vacancy to suit a prospects needs and you'll need to a way to keep track of their preferences and conduct follow up as appropriate.

- Restaurants can and do function as anchors.

  • " only need one of the very popular, 2,500-square-foot restaurant concepts to anchor the property and create the increased traffic other tenants want”. No surprise here. Restaurants are effectively the new downtown anchor. 

- Focus on health and beauty. 

  • "Health and beauty retailers are one of the fastest growing retail categories today. Tenants like day spas, waxing, and massage keep shoppers around for several hours, especially baby boomers and others with more disposable income"
  • " is a sure-fire draw, particularly for the under-35 demographic"

- Consider a specialized niche...i.e. don't try to be everything to everybody. 

  • Is your strength an immigrant community? Then consider an ethnic niche. "Ethnically oriented specialty centers, which offer groceries, home decor, food, and even clothing for one large immigrant group"
  • Or maybe you are a family-oriented district? Do you offer a full range of activities and services for families? “Everything for the mom and the child is in one place,”

- Marketing....

  • "Loyalty programs and coupons distributed through social media and mail are another widely used retail promotional tool"
  • Tell the story of your retailers. "Customers are often attracted by the personality and personal story of the owner. Shoppers, especially younger ones, will go and support a favorite store by buying a $300 pair of jeans made locally rather than buying three less expensive pairs online”.

- Up-keep matters!! 

  • “Street appeal is absolutely key to making a center a destination” 
  • “Cosmetic appearance is the No. 1 thing that consumers comment on, and it’s an easy one to fix” 
  • "Painting and parking lot re-striping should be done at least every other year, extensive facade renovations are also necessary every seven to 10 years"


Seward Park Mixed-Use Development will transform more than six acres of underutilized land and transform them into a vibrant mixed-use development. Miriam Harris will speak about this and other projects. 
Update - Miriam cancelled briefly to accommodate a mayoral press event...which was then we are back on! Come join us for what promises to be a great conversation with fantastic networking!


As co-chair of the New York ICSC Alliance Committee, I am pleased to announce a conversation with Miriam Harris, Senior Vice President of Real Estate Transactions at the New York City Economic Development Corporation (NYEDC). NYEDC is New York City’s lead agency for public-private real estate development projects in all five boroughs of the City. As Senior Vice President at EDC, Ms. Harris has a keen understanding of what it takes to successfully partner with the City to bring a project from concept to completion. She is currently responsible for over 25 active projects including the 62 acre Willets Point Project in Queens, the 1.5 million square foot Seward Park mixed-use project on the lower east side of Manhattan and the 2 million square foot Cornell-Tech campus on Roosevelt Island.

The breakfast event will be held at ICSC Global Headquarters, 1221 Avenue of the Americas on Sept. 19th. Pre-registration is required to ensure you do not have problems with security. Seating is also limited, so please register ASAP. Registration fees: Members, $20; Non-Members, $35. Click here to register.

The ICSC Alliance Program is a program of the International Council of Shopping Centers (ICSC), the international trade association for the commercial retail estate industry. Alliance Programs are wonderful opportunities to network, share experiences and exchange ideas with commercial real estate professionals from both the private and public sectors. Needless to say...bring business cards!

If you want to know more, or to get involved in planning ICSC events such as these, please feel free to contact me at

Friday, August 23, 2013

Save Time and Resources. Start by going after the RIGHT retailers.

Not quite the kind of retail that
attracts young and trendy customers.
Devising a retail attraction strategy is a bit like threading a needle. Getting the thread through the needle requires a keen eye for details  or you will miss your mark entirely - and end up a bit frustrated to boot! In this post we make the case that diagnosis, analysis and market data are critical to ensuring you spend time chasing the right tenants, not the wrong ones. But knowing what kind of tenants to pursue is just one piece of the puzzle for commercial district managers, the other is getting buy-in from local stakeholders, including BID Board members, property owners and brokers, that your recommendations are sound and market-based. Having the right data and presenting it well is part of what it means to have an effective retail attraction strategy. Basically, when you know what kind of district you are, or can be, and you have the facts to back you up, you can be much more successful in selling your vision and attracting new retailers.

But getting to that point first requires answering a few questions. In our work, we typically begin our market research by answering the following...

1. Know what retail categories you can support and would make a good addition to your district. At its most basic, this involves looking at your market and retail leakage data and talking to your existing retailers. A more sophisticated analysis would involve focus groups and maybe even customer surveys. Surveys are useful when you have a lot of non-local resident customers (mostly because Census Data won't tell you much about their consumer preferences).

2. Know what price point is right for your market. Are you a high-end or value-oriented district? Missing the mark on price point can be the death knell for a local business. For example, we are working in one community that needs an electronics store - and a few years ago they got one. But it was a little too high-end for the local community and the store owner did not do much to change the merchandise mix and price point to reflect his customer base. Within a year, the store was closed and the owner in debt. Now, understandably, other electronic stores are hesitant about the market. This is the worst possible scenario, because while the market CAN support the right retailer they will all be hesitant because of the failure of one retailer who shouldn't have been there to begin with.

3. Know your district's "lifestyle segment". In the retail industry, retailers are categorized by "lifestyle". While the industry terms vary slightly depending on who you ask, generally lifestyle falls into three fairly self-explanatory categories, "conservative", "contemporary" or "trendy". Take a moment and think about the retailers you know and love. Where do they fall on the spectrum? Conservative retailers will sell you the basics, won't try to rock the boat with far out advertising or styles that will change drastically from season to season. People from many walks of life and many backgrounds may shop at this kind of retailer. On the other hand, contemporary retailers try to keep on trend, but within reason. Think Macy's or Banana Republic. Trendy retailers are a bit more avante-guarde and appeal to a smaller segment of the population. Think Brooklyn Industries or American Apparel. They typically need a larger trade area to survive, because they are pulling fewer customers from the general population and therefore need to attract people from a larger geographic area.

4. Now combine price point and lifestyle.... With this information in hand, you can begin asking similar questions of your target customer. What kind of price point are they comfortable with (this will likely correlate with their income). Do they tend to shop at conservative, contemporary or trendy stores? In answering this question be sure you have an adequate cross section of respondents...if you are only talking to long-time residents and not new arrivals, for instance, your findings may be skewed. Psychographic data can also be helpful in illuminating these subtle distinctions. Our firm uses ESRI Tapestry Segmentation. (For more ESRI Tapestry Segmentation, go here.)

To communicate how all of these data points overlap, we created a proprietary matrix called the LOA Strategic Positioning Matrix (TM). This deceptively simple chart has evolved slowly over time and is based partially on the work of veteran retail consultant John C. Williams ("Getting Retail Right"), the author of some excellent books on retail that are must reads for practitioners in the field. In any case, in the past we often struggled with communicating succinctly how market data and retail opportunities overlapped until we developed this tool. Now, the more we use this the more it has become one of the most useful tools in our arsenal! In any case, by taking William's framework for retail to another level,  we have been able to more effectively describe a district and its customers to stakeholders, property owners, brokers, etc for the purposes of finding the most viable tenants.

In the next few images, I will share with you how we use this tool with our clients to help them refine their retail attraction efforts so that they target only those tenants that will help round out and improve overall retail mix. This strategy helps save communities from chasing tenants who are the wrong fit and conserves valuable human and capital resources.

LOA Strategic Positioning Matrix
The level of detail encapsulated in the LOA Matrix ensures that the retail attraction strategies we offer are extremely customized and reflective of the unique conditions of any given neighborhood. We've also found that the matrix can be very useful in dealing with key local stakeholders. Stakeholders can sometimes misjudge their district (surprise, surprise!). For example, they may think that the district is in a position to attract a much higher-end retailer than the market can truly support. This tool can help you quickly manage expectations and keep everyone on the same page as retail recruitment begins in earnest.

Here are of our recent projects that demonstrate how we use this tool.

Steinway Street, Astoria, Queens: Tenant-Customer Mismatch
Our analysis revealed the need to bring tenant mix in line with a rapidly changing demographic. Steinway Street merchants may have been the right mix for the neighborhood in the 1990's, but today the tenant mix is somewhat outdated. Younger, mobile professionals are moving in - and are spending their dollars elsewhere. Addressing these issues and meeting the needs of this growing population will be critical to ensuring that Steinway Street businesses are effective and successful. So how did we communicate this to stakeholders?

Diagram 1: Steinway Street - Existing Tenant Mix Analysis
We first mapped retailers according to two criteria, price point and lifestyle. The vertical axis maps Price Point, while the horizontal axis maps Lifestyle.  Every existing and potential tenant can be mapped on the Matrix. For Steinway, an extremely long corridor with a number of divergent identities, we did a block by block analysis to discern significant differences between blocks. In the Matrix below, each color blob represents a block along the street. As you can see, some blocks offer a mix that is solidly contemporary and mid-priced., including the strongest block on the street that includes a number of national popular priced chains such as The Gap, Express and Victoria's Secret. Other blocks are much more varied in offerings, lacking a clear identity for shoppers. For the most part, the offerings on the street are low to moderate in price and decidedly traditional and contemporary.

Diagram 2: Steinway Street - Residential Psychographic Analysis...a Mismatch was Obvious
We then analyzed the district's psychographic data and found that 95% of the market fell into two categories, "trendsetters" and "urban melting pot". ESRI defines each of these as follows: Trendsetters are young, diverse and mobile. They are spenders. Fashion-conscious, they shop at stores like Banana Republic, Gap, Nordstrom and Macy’s. They buy organic food, exercise regularly and own the latest electronics. Urban Melting Pot neighborhoods are ethnically diverse, made up of over 50% foreign-born residents. Fashion conscious, yet cost conscious, Urban Melting Pot residents love to shop. Macy’s is a favorite but they also shop at other upscale retailers, as well as warehouse/club stores, especially for clothes and jewelry.

When we mapped these lifestyle segments, taking into account the median income of each segment and their various characteristics, what jumped out at us immediately was the significant mismatch between the merchandise mix and the residential market. This data confirmed what many stakeholders - and a consumer survey - had told us, that Steinway Street was inadequately serving the local market. Not only was the tenant mix stale and in need of fresh retail offerings, but the current mix was actually undermining the success of street. In seeking new retailers, we clearly outlined a strategy for our client that included a focus on retailers whose price point was moderate (not cheap) and offerings that were a mix of contemporary and trendy (not conservative). As part of our exercise, we also scanned the local market and used our own growing list of New York based regional businesses to suggest over a dozen retailers that fit this profile and were located in similar urban markets. Moving forward, the low vacancy on the street will require significant partnership with property owners to help them understand the importance of retail mix and to ensure that they fill spaces with appropriate retailers as vacancies come up.

Grand Street, Williamsburg, Brooklyn: A Tale of Two Customers
Grand Street is a very different animal. What we found after mapping the residents in the community is that there are two kinds of customers with very different needs and expectations. The first is a low-income resident who resides in public housing. The second is a young artist or professional - again back to that "trendsetter" lifestyle segment. These two customers have some overlapping needs but not not many, making it challenging for retailers to meet this set of divergent expectations. Our stakeholder interviews also bore this out. Some retailers reported struggling to meet the needs of both kinds of customers and were nervous about cultivating a higher end look or merchandise offering for fear of losing their core customer base.

Another interesting element to this analysis was spatial. When we looked at a map of the district, it was clear that one end of the street met the "high rise renter" needs, while the other end of the street meets the "trendsetter" needs. Of course, our retail recommendations included a block by block strategy that recognized the distinct differences in these customers and the desire of certain retailers to locate on certain blocks on the street.

We are excited to share this with our followers and would love feedback and thoughts! This tool is very much a work in progress - but we hope you enjoy the thinking behind it!!

Monday, August 19, 2013

Can Commercial Districts play the Social Media game?

It is not uncommon to see social media handled poorly by business improvement district organizations. I follow lots of twitter accounts and facebook pages, and I often see posts related to the organization or staff, but little that might compel customer visits...the real reason the organization is in business to begin with! When using social media, it's always helpful to remember exactly who your audience is and what value add you are offering them. Your twitter feed should not be about promoting your work (like anything, there are some exceptions of course), it should primarily be about promoting the businesses and the activities you sponsor that are intended to drive visitation to your district. There is a fine distinction here that makes all the difference.

As many of you know, I often look to what the Shopping Center Industry is doing to cull ideas. The way I see it, if Shopping Centers spend their resources testing ideas to attract shoppers to their stores - we might as well learn something from it and save the hassle of having to reinvent the wheel. To that end, the August issue of Shopping Centers Today had a great feature on the changing role of social media and offered two innovative ways that shopping centers have leveraged “followers” online...see below and enjoy! 

Growing your twitter with "Follow Friday's"
Miracle Mile Follow Friday Billboard
The Miracle Mile Shops in Las Vegas hosts “Follow Fridays,” during which the Twitter profiles six randomly chosen followers of the Miracle Mile’s Twitter handle are displayed on the mall’s LED screens on the Las Vegas Strip. Every Friday, @MiracleMileLV sees an increase in Twitter followers inspired by the opportunity to see their name on the big screen. In less than a year since its inception, the “Follow Friday” campaign has helped the Miracle Mile shops gain 64% more Twitter followers and 51% more Facebook fans.

Get in on the Competition Trend..."Love It of Lose It" Campaign
Vancouver mall Metropolis at Metrotown’s “Love It or Lose It” campaign encourage people to upload pictures of themselves in different outfits to the mall’s Facebook page, where other fans could vote on which people’s outfits they like best—and worst.   At the end of the four-week campaign, users with the most “love it” votes received mall gift cards for a shopping spree, while users with the most “lose it” votes also received mall gift cards for a shopping spree—and a free hair makeover and style consultation. Shoppers were not the only winners—Metropolis at Metrotown’s Facebook page drew 10,500 visits, 41,000 page views, and the fan base grew by 17%.

Summer Associate Nicole Leighton contributed to this article.

Friday, August 2, 2013

Pittsburgh Neighborhood Unveils Strategies Aimed at Drawing Tourists to Local Businesses

The best part of my job is seeing recommendations come to life - and this week I got that in abundance! For the past two years, our firm has been working with LISC MetroEdge on a program called Corridors of Retail Excellence (CORE). The program is special because it requires close collaboration with a local community organization in the design and execution of strategic corridor improvements. Once a number of strategies are selected, the program will fund up to $30k+ towards a series of short-term, catalytic projects. What makes this program even more unique is that during the course of the program, a dedicated "scribe" (i.e journalist) chronicles the outcomes with news articles (see previous post on the scribe program) that are then posted on the program's website and widely distributed to local media outlets. After testing the program in Richmond Virginia and Rhode Island with HUD Section 4 monies, a full-blown pilot program was funded by PNC and six selected corridors in three cities were selected (Philadelphia, Pittsburgh and Chicago). I am fortunate to have had to opportunity to lead three programs in the neighborhoods of Lawrenceville and Mount Washington in Pittsburgh, and East Girard/Fishtown in Philadelphia.

Yesterday was the press event for Mount Washington, a community in Pittsburgh that is renown for its amazing view of the City, accessed by funicular cars that crawl up the side of a steep incline. When our team visited Mount Washington over 18 months ago, our discussions with our on-the-ground partners Mount Washington CDC centered around the fact that 1.5 million visitors visit annually for the view, but few walk down the streets and patronize local businesses. The reasons are myriad, from the bend in the street that makes it hard for visitors to see what is down the street, to the lack of an inspiring retail mix that offers limited reasons to wander. As we spent the day on our diagnostic tour speaking with business and property owners, it became clear that there were a few fairly low-cost, high impact activities that might help turn the tide. Additionally, we recongized the need to measure the impact of our work (a critical but often overlooked element of commercial revitalization) and began collecting baseline metrics, in this case pedestrian counts, that would allow us to measure the impact of our efforts over time. The program recommendations included a mix of immediate activities, including vertical "blade" signs for some of the businesses that would cue visitors to business activity down the street. We also proposed a printed business directory and an online interactive smartphone application that would allow locals and visitors alike to find and patronize local businesses. Finally, in a effort to improve tenant mix over the long term, MetroEdge analysis was used to develop a comprehensive retail attraction package that will be part of a comprehensive retail attraction effort led by MWCDC. Here are some fun pics from the event and some of the fantastic local coverage that the project has received, coverage that served multiple purposes, including raising the profile of the local businesses and driving additional traffic down the street. I'll be excited to share the results of our second round of pedestrian counts at the end of the summer! 
Vincent Deandrea of Deandrea Designs in front of his new sign. Vincent has already noted an increase in foot traffic since the signs were installed. 

It takes a team!! For nearly two years, I have worked closely with Jason Kambitsis (right), Executive Director of Mount Washington CDC and Sarah Dielman-Perry (center) of PPND. It was great to celebrate with them! Yes, that's me on the right. :)

The retail recruitment package was incredibly creative and included these lux boxes with individual cards outlining key assets in the community, as well as a wooden USB drive with data included. In addition, nearly 7,000 district directories will be distributed at local businesses - these directories are also tucked in to the marketing package and help to communicate to new businesses the extent to which they receive free marketing if they locate to the district.

Vickie Pisowicz, owner of Grandview Bakery in front of her sign. These signs also include an international icon in a nod to the many non-English speaking visitors that travel to Pittsburgh every year.