Tuesday, August 15, 2017

Creating a successful open street

Last month, I got up on a beautiful Saturday afternoon to the sound of loud, popular music from a neighboring street. As I followed the music, I was brought to Tompkins Avenue in the residential neighborhood of Bedford-Stuyvesant, Brooklyn, where I was faced with gridlock traffic. Every car was being rerouted to Gates Avenue because, as it turns out, Tompkins Avenue was closed to vehicles for the annual Tompkins Avenue Merchants Association (TAMA) Summerfest.

TAMA Summerfest is a local open streets event organized in partnership by local Bridge Street Corporation and Tompkins Avenue Merchants Association, and this year it was in its 4th year running. Since its inception in 2013, the open streets event has more than doubled in size from only covering two blocks between Hancock Street and Putnam Avenue to a full four blocks between Hancock St and Monroe St.

All over the country, Open Streets programs have sprang in numbers from only 10 of such programs a decade ago to over 70 by the end of 2011. In New York, we call it 'Weekend Walks' – multi- block, multi-day events on commercial corridors supported by NYC Department of Transportation. They also entail closing traditional streets to automobiles and converting them into temporary public spaces for pedestrians and cyclists. As with other types of public spaces, a variety of activities is often programmed to occur on the street, for example, musical performances and catwalk shows on Tompkins Avenue. These programs often attract local residents in the neighboring areas but also increasingly attract visitors from much farther away, which might result in higher-than-normal foot traffic for local businesses lining the street.

However, as I found at TAMA Summerfest, the activities programmed on the street only work best for businesses when:

1. They relate to the services and goods already available at adjacent storefronts

I sat along Tompkins Avenue during the Summerfest observing users of the street and found that food vendors out on the street had a very organic relationship with the local bars and wine stores. The products offered were complementary so as visitors walked away with snacks in hand, they would venture slowly over to Bed Vyne Brew to get a cup of sangria, wine, or soda.

In addition, many of the established businesses on Tompkins Avenue were also active street vendors during the Summerfest and were creating physical outdoor extensions of their already existing or soon-to-be storefronts. As a result, many customers were seen venturing further into storefronts after perusing the small selection of products on display out on the street.

In fact, a study of open streets programs by Hipp et al, 2012, in St Louis supports this observation. 73% of participants in an open streets program in St Louis had spent money at a nearby business and 68% became newly aware of a store/ restaurant. These findings certainly bode well for the merchants on Tompkins Avenue.

2. Sprinkled throughout the corridor and not just concentrated on one end or another

Overall, areas along the street that were punctuated with a hub of activities found visitors lingering for longer periods of time. From my observations, I noticed parents would browse products in store windows while their children played in the bounce castles, and younger women were getting their nails done outdoors as their spouses finished their beers. 

In the same study of open streets in St Louis in 2011, each participant reportedly spent an average of 108 minutes on the route, which might have translated to increased expenditure at nearby businesses. 

However, on Tompkins Avenue, there was a distinctly inactive zone at the intersection of Madison Street (see diagram above). This was a result of no programmed activities in that area, aside from one vendor selling mobile phone covers. Not only was the product offered not complementary to the Chinese food stall behind it, it was sitting isolated from all the other activities on the street. Businesses such as Calabar Imports, a specialty home goods and furnishing store, located across from the Chinese take-out restaurant, did not appear to benefit from cross shopping as a result of the inactive zone. It's therefore important to ensure that an even spread of activities and street vending occurs along the open streets route to avoid a dip in vibrancy in the public space that might affect the foot traffic to the few businesses located around an inactive zone.

Aside from this single inactive zone, however, the Summerfest on Tompkins Avenue appeared to be a lively event that showcased local businesses on the corridor (new and existing!) and that seemed to work on the whole as a public space. There were pedestrians, cyclists, skaters and even parents with strollers throughout the corridor that afternoon. Merchants were interacting with customers in the open space, promoting products and services offered on a regular basis, and ultimately ensuring a return visit was in the works.

The 0.25 mile open street on Tompkins Avenue certainly had all the features recommended to encourage local economic and community development. Local businesses were set up as active street vending participants and the program was organized in partnership by the local merchants association and not-for-profit Bridge Street Corporation. Finally, the free public activities including the NY Public Library mobile library and music performances were critical in getting local residents to participate on the day itself.

I hope TAMA Summerfest continues to enliven the commercial corridor in my neighborhood for years to come and hopefully this brief social observation study provides an insight to how they might improve the positioning and programming of activities along the corridor in future iterations. 

Monday, August 14, 2017

Retail Mistakes in Santiago Calatrava's Oculus

No one is saying the space is not beautiful. Ok, maybe SOME people are, but in my mind, architect Santiago Calatrava added something very special to downtown Manhattan in his stunning, and stunningly overbudget, Oculus. Shopping there, however, is another thing entirely.

The Oculus doubles as a transportation hub for New Jersey PATH trains and as a Westfield shopping center and while it serves it's purpose, I was shocked at how poorly thought out the retail components of the project are. Getting urban retail right - particularly vertical retail - can be a challenge as a new Citylab article on the historic trials and tribulations of urban shopping malls makes clear.  Yet the article speaks to solutions that were clearly not put in place at Westfield World Trade Center. The aesthetics may be beautiful (though the leaky roof and wet marble fall are likely keeping attorney's busy), my experience as a shopper left me confused and frustrated. A few things I noted...

Challenging Circulation Patterns. This picture was taken from the central "piazza". My first question was...how do you get from where I'm standing up to that overlook? The elevator doesn't go to the first floor and neither do the stairs. Hmm...

Yet another image, this time from the second floor. It's nice that the stairs float, but again, how do I get down to the first level of shopping? I couldn't find a single sign directing me to the escalators (which I did eventually find, but they were of course hidden from plain view in deference to the architecture, because really, it is hard to dress up a functional escalator). Finding ways to get from one floor to another was confusing and frustrating. Is this how a retailer wants their customers to remember the shopping experience?And what about those commuters who are in a rush? If the elevator doesn't go down to the PATH level, those customers have to double back to the middle of the piazza to find an escalator. When a few minutes may mean missing a commuter train, the answer for many will be "no way".

Poor Directional Signage. Here I am, finally, at the escalator and elevator on the second floor trying to get down to the first floor. It is nice that there is a sign directing me UP and OUT to a variety of things - the 9/11 Memorial, One World Trade Center, One World Observatory, and Greenwich Street - but not a single sign for where to go DOWN for more shopping.
Seemingly Non-Existent Store signage. Can you even tell what that store is selling? I had a very difficult time figuring out it out until I walked right up to the window (hint. Apple products. Ok, that was more than a hint). Perhaps the designers thought signage would distract from the design (they were probably right), but it also undermines retailers ability to raise awareness and drive foot traffic. 

It also strikes me that there is a mismatch between the most frequent potential customers (those going to PATH trains) and the retailers who occupy the stores, particularly on the piazza. While having an Apple store there makes sense, Hugo Boss and John Varvatos a little less so. To be fair, more accessible retailers can be found hidden, and I mean hidden (again, no signage directing you there) in the South Concourse.

While I don't know for sure, my sense is that high end brands were convinced to locate here for the vanity of it, but in the end, sales won't quite cover costs. The few times I've been there so far I have not seen many people shopping in any of the higher end clothing stores or boutiques. I'd be curious to see what happens at the end of some of the lease terms. I imagine turnover is likely. 

Wednesday, August 9, 2017

FREE Resource! Tips to Make Your P3 Pavilion Journey at ICSC Deal Making a Success

If you missed last week’s ICSC webinar on strategies for Public-Private-Partnership (P3) success at Deal Making events, no problem! A recording is available HERE. This is a great FREE resource for public and non-profit entities considering participating in Deal Making but not sure where or how to begin. 

And for those hoping to do more than just walk the floor, another good opportunity to consider are the ICSC P3 Pavilions that allow public and non-profit partners to maintain a low-cost, turnkey kiosk and have a physical presence on the trade show floor. These kiosks are part of a branded area dedicated solely to P3 public and non-profit partners. The goal is to use this area to raise awareness among all of ICSC members about the P3 effort and to help participating communities find interested partners, retailers and developers.

If you are thinking about attending ICSC, be sure to check out the webinar and consider snagging a kiosk early as they do go quickly. P3 Pavilions will be featured at five upcoming events. 
  • Chicago Deal Making, September 27 – 28 | Chicago, IL
  • Western Conference & Deal Making, October 2 – 4 | Los Angeles, CA
  • Canadian Convention, October 2 – 4 | Toronto, ON
  • Texas Conference & Deal Making, November 8 – 10 | Dallas, TX
  • New York Deal Making, December 6 – 7 | New York, NY
The webinar has more information on how to apply. And if LOA can be of help as you prepare for Deal Making, please let us know!

Wednesday, August 2, 2017

Parking Lots to Public Spaces

In recent months we've talked a lot about parking issues downtown - whether to keep your lots and garages, how to keep and maintain them, whether to lower parking minimums. I assure you our rants about parking lots and garages are well-founded. If you need to be reminded, there are about 500 million parking spaces throughout the country occupying about 3,590 square miles, as last reported in 2012. Furthermore, in some cities in the U.S., parking lots cover more than 30 percent of the local land area, according to Eran Ben-Joseph, a professor of urban planning at M.I.T. who wrote "ReThinking A Lot." Often, these parking lots downtown are owned and/ or managed by municipalities which means they are in fact public land that should be enjoyed by the public.

Pike Place MarketFront (After)
Many cities have become privy to this fact and are increasingly taking a more human-centric approach toward parking spaces and lots and are turning them into the rightful public spaces that they should be. Many of these strategies often start with smaller, guerrilla tactics such as weekly farmers markets in parking lots, or seasonal cultural events, before getting buy-in from local communities to structurally transform the lots into public plazas/ squares, and even light manufacturing spaces (as in the case of Seattle’s latest Pike Place MarketFront). Architects have also increasingly been introducing green design to parking lots for decades now to improve the pedestrian environment downtown. They are incorporating more flora and fauna, and natural permeable paving materials that mitigate storm water runoff and urban heat island effects common in downtowns with high density.

Parklets are another common strategy being employed in major cities to reclaim parking spots for conversion into public spaces. This strategy, while helpful in building support among local businesses and residents to lower parking supply in downtowns, only manages to typically reclaim one or two parking spaces for a limited amount of time. When we start to think bigger, we are able to convert entire parking lots into larger public spaces such as public plazas and parks and we would be reclaiming on average 50-100 parking spaces in one fell swoop.

Here are some examples of parking lots in downtown areas that have been strategically transformed into public spaces. Each case shows that there are incredible social and economic benefits to be reaped from reclaiming parking spaces.

Fort Worth, TX– Sundance Square [Completed in 2013]

Sundance Square (Before - 2007) PC: GoogleMaps
Sundance Square (After - 2016) PC: GoogleMaps
Sundance Square now occupies land that once was home to two separate parking lots (each with more than 60 spaces) across from each other along Main Street in downtown Fort Worth. The Plaza now offers residents, workers and visitors a large space for events, programs and individual use. Public workshops were facilitated by PPS throughout the planning process. "Through the open discussions, it became clear that people mostly thought of downtown Fort Worth as an area to pass through, but not a destination in itself..." and there was no gathering space sufficient enough for large downtown events, which the community felt was important. The community also felt that "the neighborhood could use more places for food and other necessities" so this was addressed by activating the edges of the plaza with more ground floor commercial establishments. The restaurants on the ground floor also feature outdoor seating fronting the plaza and encourage active surveillance of the public space. In addition, the plaza also features water fountains that are interactive and fitting for the warm climate in Texas. 

Montreal, Canada – Joseph Venne Public Plaza [Completed in 2014]
Joseph Venne Public Plaza (Before) PC: GoogleMaps
The Joseph Venne Public Plaza is much smaller in size compared with Sundance Square. It only measures about 10,000 SF and was formerly the site of a parking lot with 20+ spaces. The parking lot's transformation was part of a larger neighborhood revitalization project in the Sainte-Marie neighborhood.

Joseph Venne Public Plaza (After) PC: Steve Montpetit
The site is located adjacent to historic buildings including the JTI-Macdonald Corp building, a well-known tobacco factory and also the CSDM, a French boarding school that was once used as a primary school for tobacco factory workers. The plaza therefore serves to connect the two historic buildings while providing an inviting space for students, workers and residents in the vicinity to gather outdoors in the warmer months. The space was also designed to be ecologically sustainable and today serves as a natural retreat for locals with its greenery, water fountain and wooden benches. 

Pike Place MarketFront (After) PC: GoogleMaps
Seattle, WA – Pike Place MarketFront [Completed in 2017]
Most recently, Pike Place Marketfront has been unveiled as the latest parking lot transformation. Measuring about 39,500 SF, the site was formerly a parking lot with structural remnants of the Municipal Market building. The site now not only features a 30,000 SF public plaza with views of the Puget Sound and Mount Rainier, but it's also the site of new vendor spaces and low-income senior housing. The project was led by the City of Seattle and the Pike Place Market Preservation and Development Authority and also engaged in a community planning process. 

Pacific Plaza Park (After)

Dallas, TX – Pacific Plaza Park [In Progress]
Finally, still in progress, is the Pacific Plaza Park in downtown Dallas. In March this year, Dallas City Council approved a development agreement to build the Pacific Plaza Park. The public space has been made possible through a partnership between the City of Dallas Park and Recreation Department, the Trust for Public Land and local non-profit Parks for Downtown Dallas. The park will site on the former site of a parking lot in downtown Dallas and will become the city's newest destination, bringing benefits to workers downtown seeking outdoor places to enjoy lunch, and also to nearby businesses by bringing in greater foot traffic.
Pacific Plaza Park (Before)

Tuesday, August 1, 2017

Why is retail important to building strong communities?

Whole Foods Market covers over 428,000SF of ground floor 
retail space in St Paul, MN.
Our work at LOA often entails diagnosing problems facing neighborhood retail corridors and offering recommendations and actions to take to revitalize these areas. More often than not, these retail corridors were once vibrant commercial districts that fell into decline following demographic shifts. This, as we all know, was a result of the flight that took place in the 60s and 70s as many middle to higher income families left urban neighborhoods for suburban homes. This shift led to urban neighborhoods falling into decay with increasing pockets of disinvestment and retail stores closing from the lack of residential and worker spending. Most recently, we have seen the trend impacting South Fourth in Mount Vernon, NY where retailers are struggling to attract local customers with poor sidewalk infrastructure, vacant lots and decaying buildings. Fortunately, this trend is beginning to reverse as more people move back to downtown neighborhoods and reap the benefits of living, working and playing in close proximity.

As this upward trend continues for urban neighborhoods, there is now an urgent need to revitalize the formerly vibrant neighborhood retail corridors that were home to a variety of businesses. Promoting and enabling neighborhood retail corridors can take the form of tenant recruitment and marketing strategies, however this assumes that the corridors already have existing physical assets to support existing businesses and attract new ones.

The typical market-led business attraction strategies may only serve to better inform commercial real estate agents and potential retail tenants about the untapped opportunity and market demand in these revitalizing neighborhoods. However, often, these neighborhoods themselves don’t have sufficient viable commercial spaces to support the retail tenants that might be interested in the market. This would then call for redevelopment and more specifically, mixed use developments that can both provide housing for residents hoping to move back to urban areas and provide commercial space for retail, restaurants and even offices.

In fact, the most direct intervention to promote neighborhood retail development is to develop new commercial real estate in the form of ground floor retail spaces and these may be led by the public sector, private sector, or even public-private partnerships. In fact, public sector-led projects can often “act as catalysts of further neighborhood development, with the expectation being that public investment in one or more key initial projects will lead to greatly increased private (unsubsidized) development activity.”

As urban neighborhoods start to get back on their feet with more ground floor retail, a myriad of economic and social benefits may also arise for local residents, particularly in areas that are still seeing a concentration of poverty or lower income families.
One South Market development in downtown San Jose.
Firstly, the presence of neighborhood retail at ground floor often has an incredible impact on overall neighborhood vibrancy and safety, and can create a positive image for the area. In fact, neighborhood retail has often been described as the ‘front door’ to a community, acting as a signal for the direction and types of changes occurring in the area. As retail offerings and storefronts improve, locals also will likely perceive the whole neighborhood as improving and becoming more vibrant.

In fact, ground floor retail, when designed well with transparent facades and welcoming signage, can result in additional lighting on the streets in the evening. If the stores operate into the night, for example restaurants and convenience stores, then these businesses will also contribute to more eyes on the street with patrons and employees coming in and out of the stores. These traits although often negligible can certainly contribute to neighborhood safety and other quality of life factors.

Neighborhood retail can also serve to provide key services to residents in the immediate area, including medical facilities, daycare centers, hair and personal care salons, and finance and tax service centers. These services would be especially important in neighborhoods that are attracting young families with children and working parents. Over time, the easy access to these amenities can even influence the location decisions of more households, potentially inviting even greater retail market demand from local residents.
Shops + Lofts at 47 in Chicago,IL features 55,000SF of retail

In addition, the retail and offices that fill ground floor commercial spaces can often become main employers for urban neighborhoods. Shops & Lofts at 47 in Chicago, IL for example is a mixed use development with over 55,000 ground floor retail SF. It is currently occupied by a Walmart Neighborhood Market, Subway, Burger King, Associated Bank and Uncle Remus Chicken, and as of 2016, there were about 35 full time employees working in the single development. Other than retail, medical service centers located on ground floors are also well-paying employers (in fact, ground floor commercial spaces are often suited to large medical institutions seeking outposts for supplementary services such as eye clinics). Overall, retail and services in revitalizing urban neighborhoods provide great job and even entrepreneurship opportunities, particularly in lower income areas.

Finally, neighborhood retail is key in solving for food deserts. Often neighborhoods that have experience the decline and decay of previous decades have lost major anchor grocery stores and are now the face of healthy food equity gap. By creating new and well-equipped spaces for large and small grocery stores to enter the neighborhood, many more residents will be able to gain access to fresh produce and essential goods that were not so easily available. Some revitalizing urban neighborhoods have even seen immigrant business owners that are bravely entering new retail spaces, offering culture-specific grocery items and thriving.

Pinecrest project in Cleveland will feature ground floor 
retail, office, residential, and public plazas.
Retail is important to building strong communities in our neighborhoods as it contributes to street vibrancy, neighborhood safety, job opportunities, and access to key services and healthy food.  As we continue our work on neighborhood retail revitalization and leading development, or business attraction strategies in emerging neighborhoods, we need to maximize the benefits to local residents who will continue to live, work and play in these areas for years to come. 

For more resources, check out:
Beyard, Michael D., Michael Pawlukiewicz, and Alex Bond. Ten Principles for Rebuilding Neighborhood Retail. Washington, D.C.: ULI–the Urban Land Institute, 2003. http://uli.org/wp-content/uploads/2012/07/TP_NeighborhoodRetail.ashx_1.pdf

What difference can a few stores make? Retail and neighborhood revitalization. Rick Jacobus and Karen Chapple, 2010. http://communityinnovation.berkeley.edu/reports/Retail-and-neighborhood-revitalization.pdf

Monday, July 31, 2017

Will Amazon Prime Restaurant kill the dining industry?

In 2015, Amazon started its slow roll out of Amazon Prime Restaurant in Seattle. Its food delivery service is unlike that of startup giants such as Grubhub and UberEats. The service has since quickly spread across a few markets including Dallas, San Francisco, Los Angeles, Chicago, San Diego, Austin, Atlanta, Miami, Baltimore, Portland, and of course New York City.

If you’re an Amazon Prime member in any one of these markets (and it’s highly likely you are since Consumer Intelligence Research Partners estimated over 63 million Prime members in 2016), then 1-hour food delivery service is available to you with no delivery fee.

Furthermore, Amazon Prime Restaurants boasts only the best, quality local restaurants on its platform and claims to be assisting small businesses that have never entered home delivery services to finally enter the online delivery market. I was surprised myself when I finally opened Amazon Prime Restaurant on my couch last night and found Aita Trattoria on the list of restaurants delivering to my address. Aita’s is a local Italian restaurant in Clinton Hill, Brooklyn widely known for fresh, seasonal ingredients – which makes it quite the neighborhood dinner destination. I’ve lived in Brooklyn for almost four years now and have never been able to get a table without waiting 40 minutes so to find out that I can simply just click a button to order their delicious bucatini and wait in the comforts of my home was simply astounding. Furthermore, once an order has been placed, a nifty little feature on Amazon Restaurants allows you to track your delivery on a real time map so you’re not waiting cluelessly on your couch.

This discovery, while exciting, also led to me to worry around what this latest proliferation of Amazon’s services might do to the foot traffic in commercial corridors, and consequently the dining industry. Especially restaurants in neighborhood commercial corridors that mainly rely on local residents to eat out on weekends and weekday nights. After all, many of today’s commercial districts continue to be anchored by food and drinking places. Amazon, without even accounting for Amazon Restaurants and its sales, has already led to some decline in overall foot traffic. In fact, foot traffic fell by 32 percent among users of the Amazon App according to research firm Sense360, who also claim it’s been two full years since restaurants could report a decent traffic month.

Sure, restaurants still make up 15 percent of all retail sales and the expenditure data shows that U.S. consumers are spending more on dining in restaurants than on buying groceries but how much of these sales are actually made in person at the restaurant versus made online on the couch via Grubhub or Ubereats or Amazon Restaurants? Also, if the National Restaurant Association surveys are right and 8 in 10 consumers are dining out due to perceptions of convenience from not having to cook or clean up, then ordering more food online to be delivered within an hour to our doorstep would certainly fit the convenience criteria – especially if friends and family already live nearby and if the weather is bad outside. (I was certainly not going out to dinner last Saturday while the summer storms were in full swing.)

The proliferation of online delivery services for restaurants also means that the industry’s profit margins are getting smaller and smaller. As it is, real estate, labor and taxes already make up some of the largest share of operating a restaurant. Now, businesses will also have to worry about being charged by Amazon to deliver their food to stay-at-home customers. As Amazon has pledged not to mark up the cost of menu items, it is instead shifting the burden to restaurants in the form of an undisclosed percent charge of each order. Of course we already knew this – Grubhub, Postmates and Seamless all charge restaurants roughly 12-24 percent of checks to use their delivery services, however, Amazon is reportedly taking 27.5 percent of checks from partnered restaurants.

So while Amazon aims to keep the gap between diners’ cost of buying groceries and ‘restaurant dining’ minimal, small restaurants and eateries will bear the brunt of the costs with smaller profit margins and fewer people walking into their establishments and their neighbors’.

Thursday, July 20, 2017

Retail in Coastal Towns

The season for sun, sand and sangria is upon us. As families and young professionals along the coast flock to the nearest beach towns for weekends or even a few months, retailers are also following suit. The latest trend in these coastal summer towns is the clustering of pop-up retailers and restaurateurs that have already established themselves in the nearest metropolitan city.

In Montauk and the Hamptons, for example, we’re seeing brands and restaurants that we’re already familiar with here in New York City. In a 2017 Hamptons Guide released by Guest of a Guest, a NYC lifestyle site, more than half of the featured retailers and food and drinking places were outposts of NYC stores. Arbor, for example, an outdoor bar and dining area has reportedly returned to Montauk for a second summer. It is run by Den Hospitality and is an expansion of the Manhattan bar The Garett. Likewise with Eleven Madison Park Summer house, the outpost of Eleven Madison Park restaurant by Michelin-starred Chef and Co-Owner Daniel Humm. In apparel, go-to women’s summer clothing brand The Reformation opened this season in East Hampton. Here in NYC, it has stores in neighborhoods like the Lower East Side and SoHo.

These retailers unfortunately are driving short-term leases in these coastal summer towns through the roof and while this has been helpful for property owners and landlords that struggle in seasonal markets, the retailers disappear after Labor Day for the next 8 months leaving empty storefronts… and less-than-happy residents.

We all know that coastal summer towns are popular areas for second homes and while this leads to high housing vacancy rates*, they also often affect the retail and commercial markets. When the part-time population leaves the coastal summer town for 8 months of the year, the full time live-in population left behind can barely support the retail square footage that is available in town. On a visit to Montauk on a surprisingly warm weekend in April, I was welcomed into town by closed or vacant storefronts being renovated for summer tenants. I could not imagine being a resident of Montauk in the autumn and winter months with almost no retail offerings available on Main Street. (Of course, the picture is much different now in the middle of July.)

To make matters worse, seasonal customers often have very different lifestyle preferences, median incomes, and median ages than the live-in residents, which results in a segmented market demand in these coastal summer towns. This means that retailers that are solely attracted to coastal summer towns for the trendy young summer customer may often overlook the needs and preferences of the live-in residents –driving an even greater divide between the customer groups. A quick look at the demographics of Montauk NY, Chatham MA and Block Island RI, all popular coastal summer towns, quickly showed that live-in residents in these places are much older, more car-dependent, and more traditional in taste and “stick to the brands they know” (not exactly the experimental pop-up brand supporter).

Furthermore, live-in permanent residents by default need year-round convenience goods and services versus temporary art galleries or summer clothing stores that strive to entertain the visitor for a couple of weeks. Balancing the retail mix in these towns is hard but when retailers follow migratory habits of customers, it is often the resident that loses the battle.
The light at the end of the tunnel for these coastal summer towns, however, lies with the abundance of experience-based businesses. Food and drinking places, personal care service facilities, indoor fitness studios, and entertainment venues still make up the lion’s share of the retail mix in these towns and for the most part they stay through the year.

These businesses support the tourism and accommodation sectors, and more importantly contribute to an overall experience of relaxation and retreat that even residents crave on weekends. Through rain, shine, or snow, the live-in residents continue to eat, drink and play at these coastal towns’ niche seafood restaurants and indoor fitness studios. In Montauk, even Gurneys Resort and Spa has introduced indoor stand-up paddleboard yoga in the heated seawater pool of the hotel available in the cool seasons.

The experience-based businesses certainly are more apt to modify their services and amenities in these seasonal coastal towns and certainly can sustain the vibrancy of the towns year-round. The coastal towns themselves however need to ensure that their zoning codes and ordinances are supportive of such experience-based businesses especially when new and innovative indoor activities are introduced along commercial corridors of these towns that may not be an allowable use in the ordinance, such as yoga studios or art studios. In fact, in East Hampton, residents have complained that restrictions on establishments that serve food or drinks have dampened the opening of the more experience-based restaurants on Main Street.

In light of the constantly changing retail environment of coastal summer towns, flexibility for retailers is important. Outdated land use restrictions – particularly those that prevent businesses from testing new concepts and incorporating new offerings – limits the ability of retailers to diversify their revenue streams in the cooler seasons and to meet the demands of the year-round live-in residents of these coastal towns. 

Tuesday, July 18, 2017

Food Glorious Food

Last week, my dad came into town and I managed to grab dinner with him in the Flatiron District. After dinner, however, my dad was craving cappuccino. But by 8:30pm all of my usual coffee spots were closed and I was at a lost. I did a quick search for something other than Starbucks in the area and chanced upon a Toby's Estate Coffee & Espresso on google maps, around the corner from where we were.

When we got to Toby's, we realized the cafe was part of an even larger retail concept which included an outpost of Strand Bookstore and Club Monaco. I can drink coffee, read a book and buy a dress- the full experience! As retailers continue to modify and adapt their store formats (especially in urban areas) to offer more than just products, food and drinks are fast becoming the go-to formula to introduce a unique experience to customers. By outsourcing these types of services to other businesses, as in the case of Toby's, retailers are also sharing rent burdens.

Last week, Fung Global Retail and Technology wrote a cool article summarizing the different types of food services found in many of London's stores. From cafes to sushi bars in Topshop and Selfridges, I decided to look for the New York equivalents and here are a few popular examples of food experiences in traditional store formats:

In the UK, food service has been shown to play an effective role in encouraging shoppers to “stay longer, spend longer”. Brits who eat during a shopping visit dwell on average 27 minutes longer, and spend 18% more per visit, according to property management firm JLL. In London—where many shoppers are more affluent and the choice of casual dining is countless—stores that offer foodservice can see shoppers dwell only 10% longer, but spend 38% more on average, according to Intelligent Business Systems.

If the same effects were to apply here in the US, retailers searching for ways to drive sales might be well off finding a food and beverage concept that aligns closely with the existing brand and products in-store. 

Friday, July 14, 2017

Distance decay and other reasons why planners overlook the obvious when planning for retail

There is a universal premise in retail - if people can’t get to stores, they can’t shop. It’s a very simple concept, yet time and again this principle fails to get considered during the planning process - especially when it comes to retail. Through our work at LOA, we have come across our fair share of projects that left us, let’s just say, confused. There was that 14,000 sf isolated retail in a mixed-use building located about .2 miles from a nearby shopping district. If that distance wasn’t bad enough, the space was located at the bottom of a hill on a street that dead-ended at a highway. Or what about that urban grocery store adjacent to a major expressway? While it was certainly visible, it was not accessible because there was no nearby exit ramp. So every day thousands of cars would see the big sign for the shopping center and drive right by because they couldn't get there. Let’s just say that the developer of that project skirted bankruptcy. 

Over twenty years we have witnessed our fair share of “don’ts”. Over time, our experience has led us to the conclusion that planning strategies are often based on an imaginary trade area, rather than a real trade area. Trade area is the area from which a store or district will pull (think "gravity" here) the majority of their customers. We take the question of trade area very seriously because it under girds every single piece of data a market research firm will provide to you about your district. Get this wrong and you might as well throw that report away.

At the most simplified level, the ability to predict a district's gravitation pull – or trade area – is directly related to two characteristics. One is the distance (or accessibility, but I'll get to that in a minute) of a district to its customer base. The other is the number and total square footage of retail offerings - what can also be referred to as mass. These two principles, mass and distance, are taken from science. In science we know that the greater the mass of an object, the more of a gravitational pull it has on other objects. The same goes for commercial districts. A district with a greater number of offerings (whether it be in the number of businesses or total SF) generally correlate to a larger trade area. I often say that people will travel 1 minute for every 4 minutes of activity. This 1:4 ratio means that if someone travels 30 minutes, they want at least two hours of activity to make the trip worth while. This is simply another way to discuss the relationship between mass and distance. 
120 linear feet of law office creates significant distance
decay between one end of Main Street and the other. 
Conversely, the shorter the distance between two objects, the greater the gravitational pull and higher interaction between those two objects. More recently we’ve been studying how these ideas relate to “distance decay”. Distance decay refers to the idea that the farther apart you pull two objects, the less interaction you are going to get between those two objects. Here are a few examples of distance decay in practice.
  • The distance between a shopper and a store. The farther a customer has to travel, the less likely they are to patronize a business. We should also keep in mind that “distance” is a loaded term. Lots of things impact how far people perceive a place to be. If going somewhere requires driving around in circles looking for parking, there will be a perception that a distance is greater than if parking is easily available. 
  • The distance between two stores. The further apart those two stores are located, the less likelihood a customer will shop at both during a single visit. 
  • The distance between a parking lot and stores. If there are things to do and see along the way, this distance feels shorter. 
The perception of distance is important here too. More than a few things can make distance feel longer to the average shopper, including:
  • Feelings of insecurity - loitering, trash that make a walk uncomfortable and therefore feel longer
  • Lack of shade trees on a hot day
  • A street pockmarked by parking lots 
  • Nothing interesting to look at - blank walls along the sides of buildings
  • Lack of transparency in storefronts - nothing to see as you walk down the street
The list goes on. 

Our work often centers around ways in which we can reduce distance decay - whether that distance is real or perceived by the customer. This might include way finding or storefront signage or mid-block crossings to name a few. 

Robert Gibbs, author of “Principles of Urban Retail Planning and Development” likes to say that people stop walking if there is 50 feet or more of a dead zone. Just 50’ can create significant distance decay such that two businesses will be unlikely to share the same customer. This distance is incredibly short – much shorter than most people realize. As you can imagine, this issue comes up extremely frequently in our work. We recently did some work in a community in North Carolina where a rapidly expanding law firm was taking over storefronts along the most vibrant stretch of Main Street – ultimately occupying 120’ linear feet of storefront(!) with office space. This precise issue came up for me many years ago when, as a Project Manager for the NYC Economic Development Corporation during the 125th Street rezoning (2008) we incorporated a restriction that would limit banks to 25 linear feet of store frontage. Since then other communities have followed suit, including Cambridge, MA where we recently completed a retail study. They too limited banks to 25' linear feet in some commercial districts. 

So while there are solutions to the very real problem of distance decay, many planners first have to recognize that this is a problem worth addressing. 

Friday, June 30, 2017

"Signs" of the Time: How Downtown Signage Can Drive Retail Sales

Marketing experts say that it takes 7 to 12 contacts to turn a prospect into a customer. Yet in our experience, many downtown's fail to take advantage of the opportunities they have to get in front of customers - namely through signage that captures attention. Here are a few recent examples we've come across through our work that illustrate how signage can help raise awareness of both downtown and local businesses.

Business signage - or lack there of
Visible signage is an important part of a business' marketing strategy. Consider this - an exterior sign is visible 24 hours a day and 365 days a year – raising awareness of a business even when that business is closed. Yet some communities have over regulated signs - believing that fewer or smaller signs are in "good taste".

What is down there? Hard to tell, right?  The lack of visible signage limits exploration and
make distances seem much farther away than they are, keeping customers from walking down the street. 

On the other hand, "blade" or "protruding wall" signs can help orient a pedestrian by giving them important visual cues that there are businesses down a corridor.

The businesses in touristy Great Barrington, MA do a great job of
offering signs as a form of "breadcumb" that pulls pedestrians along the street in exploration of new stores. 

Signage that isn't doing it's job
A downtown cultural anchor is a great asset - but what if most people don't know it's there?

Can you spot the Marquee for the Clemens Center in downtown Elmira?
Hint, hint - it's on the right.
During the daytime, this heavily trafficked road carries more than 12,000 vehicles.
These are 12,000 daily impressions that are being neglected. 

Cultural institutions in particular benefit from highly visible signs that also offer opportunities to promote upcoming events, like this gateway marquee marking the entrance to Downtown LA.

Painted Signs on Walls
A blank wall can be a great opportunity to help connect businesses with potential customers.

Freestanding Signs & Sandwich Boards
Many communities place restriction on sandwich boards without taking into consideration how effective they are at driving business to local stores.

This hand painted sign also reinforces the
brand of the store. You can't walk past this store
without noticing it. The lovely window display doesn't hurt either. 
This level of clutter isn't necessarily productive. Regulations can be written to
limit the places of A-frames to an area immediately in front of a business. 

Thursday, June 29, 2017

Round Up: Neighborhood Renaming Prohibition, India Retail Expansion, Urban Lifestyle Centers, "CityTrees", Too Much Parking

New York Senator Wants Realtors to Stop Renaming Neighborhoods

This Next City story questions the right of the real estate industry to change neighborhood names to their likely benefit. I remember the BoCoCa (Boerum Hill, Cobble Hill, Carroll Gardens) debacle a few years ago in South Brooklyn as residents vehemently resisted this name change. How enforceable could the Neighborhood Integrity Act be?

Over 50 global retailers to enter India in 6 months, likely to open about 3,000 stores

Small and mid-sized brands look to expand in India, now a very promising market on the rise with an "open retail policy and huge gap in the market for branded products." 

Making the move from the regional mall to the urban lifestyle center

The move marks an ongoing shift from enclosed regional mall or large suburban-style retail center to more urban lifestyle-focused mixed-use. National chains are adjusting to a smaller-format and community engagement.

Moss-covered CityTree has the same air-purifying effect as 275 regular trees

Not just good for the air we breath, but the CityTree could be a commercial corridor marketing tool. 

Downtown Akron is one-third parking lots: Akron Downtown Vision & Redevelopment plan asks for ideas on challenges

One-third is high but not unusual for the Midwest. Akron saw a high level of community engagement in response to an input seeking session and follows their Phase 1 session last year. 

Monday, June 26, 2017

Beauty Store Survival in the E-Commerce Age

The beauty store is proving that, for some retail categories, shopping in-store remains very much a social experience. Around the country, beauty stores are transitioning into places that inform, educate, and entertain, according to founders of Bluemercury, a leading luxury beauty retailer.

Beauty stores are also quickly responding to the changing habits of their consumers who crave convenience and rapid service. Bluemercury, for example, is often located in an urban and dense location, probably next to a Starbucks, so that the busy mom or working professional can easily grab coffee and then grab lipstick in one seamless trip.

Today, overall spending on makeup and beauty supply is being boosted by an influx of new brands and products creating more dollars to go around amongst retailers. In fact, spending on beauty and personal care is growing more quickly globally compared to spending on apparel and footwear, according to market research firm Euromonitor International. This may be attributable to the fact that the beauty industry also has the added benefit of not being a seasonal industry, which keeps prices relatively consistent throughout the year. Although shades of make-up change by season, products remain the same and things like facial wash and shampoo remain the same throughout the year. This is antithetical to the season-dependent clothing and accessories category.

The $80-billion-a-year U.S. beauty industry has been growing 4% annually since 2010—much faster than other areas of retail – and Hispanic and African-American women are making up a large share of this market.

How are beauty retailers reinventing to survive this e-commerce era?

Leverage social media
Fortunately, beauty consumers are also discovering new make-up looks online as they do with clothing and accessories. Many beauty retailers are getting a boost from the rise of the selfie as consumers are referring to looks they see on Instagram, Snapchat or Pinterest as inspiration for product purchases. According to Shelley Haus, vice president of brand marketing at Ulta Beauty, “Social media is shaping consumer behavior… Scrolling through Instagram, the pictures and videos bring things to life in a way that’s super absorbable.”

Sephora has even sponsored Snapchat filters that create instant makeovers to the subject in the photo. This makes the product relatable and appealing to users. Sephora also targets its Snapchat filters at specific locations within proximity of a store so that in can help capture foot traffic. Customers who may not realize they’re near a Sephora store then become aware when they turn the geofilter on.

Maintain brand exclusivity
In an age where everyone assumes they can buy almost anything on Amazon, it seems almost impossible for retailers to keep up with online Amazon sales. Ulta Beauty and Sephora, however, have managed to keep the e-commerce giant Amazon at bay by maintaining brand exclusivity. Many higher-end makeup companies distributing their products through Ulta or Sephora have little product overlap with Amazon ensuring that customers must often make purchases off of the Amazon site, according to the analytics firm L2.

This cooperation/ partnership with higher end brands is also being strengthened across all channels through combined ‘prestige brand boutiques’ whose sales rose 7% last year, according to NPD Group.

Provide satisfying in-store experience
Most importantly, beauty stores are continuing to expand beauty and makeover services provided so that customers continue to shop in-store. First and foremost, beauty stores are providing places to play with special vanity lighting and make up testing stations. This is especially important to customers who are buying a product for the first time and wish to test and sample products. Makeup shades, for example, may appear differently on screen than on the face.

More and more, beauty stores are also providing a wider range of services including full-service salons and in-store brow bars. This allows customers to learn the latest makeup application techniques that may be harder to do/ more time consuming to do online. Ulta, for example, does not charge for makeup consultations while Sephora holds free make-up classes throughout the year.

Here's more on the top three beauty stores expanding throughout the country, read on and find out what they have to offer and what they're looking for!

1.    Ulta
Description: All-inclusive stores carry over 20,000 products from over 500 brands – everything from mass-market brands to high-end cosmetics, all in a format that lets customers try before they buy
In-store services: Beauty services include nails, waxing, blowouts (Ulta launched Drybar in 400 of its stores in 2016) and salon services include facial, hair, make-up
Ulta also maintains loyalty through a successful shopper-rewards program, Ultamate. It is one of the nation’s biggest loyalty programs, with 20.6 million members—and members account for an astounding 80% of its sales.
Growth: Same-store sales rose 14.3 % for the latest period while digital sales grew 71 % in the first quarter of 2017, to $104.3 million from $61 million. Strong online sales are largely incremental to its brick-and-mortar business, with 8.6% of loyalty members now shopping across all channels
E-commerce strategies: Paid search, display advertising, paid social
Current Locations: Ulta is widely- known as the ‘strip mall secret’. Ulta’s preferred neighbors were retailers like T.J. Maxx and Target—because of the middle-class shoppers they attract. In NYC, Ulta Beauty can also be found in regional shopping centers such as Rego Center and The Shops at Atlas Park. However, its fourth store is due to open in the more urban setting of Upper East Side as it changes its co-tenancy strategy toward Trader Joe’s and Whole Foods.
Customers: Millennials, Gen X and particularly, Latinos. Customer dwell time is estimated to be at least 15 minutes per visit.
Expansion Plans: Looking to expand from 1,400 to 1,700 locations across the US, or 100 per year.
Site Requirements: 12,000 SF (10% taken up by salon stations)

2.    Sephora
In-store services: Other than the typical beauty and salon services, Sephora stores also boast high tech features like iPad stations that offer beauty classes and virtual makeup try-ons
Omni-channel game: Launched the ability for customers to purchase Sephora online and pick up their order at a J.C. Penney store the same day, planning to introduce a new online feature that will enable customers to book a makeover with a Sephora beauty consultant.
Customers: Urban,  high-end
Site Requirements: 1,500 -2,600 SF (or up to 5,000SF)
Expansion Plans: Sephora inside J.C. Penney began in 2006 and after this expansion the company's makeup, fragrances, skin and haircare brands will be available in almost 650 J.C. Penney stores in 2017.

3.    Bluemercury
Description: Upscale, neighborhood alternative to department store beauty stands. Its focus lies in offering products with natural ingredients.
In-store service: Spa services include skincare treatments, esthetic treatments, and body care treatments. Bluemercury is also known to invest heavily in knowledgeable service staff. Employees develop expert product knowledge and are offered benefits for longer-term employment.
Current Locations: Dense urban areas, customers live within 5-mile radius/ 15 minute drive in the case of suburbs, co-location with take-out and fast-casual eateries and caf├ęs
Customers: Broad array of customers – “50 percent of customers are coming for a solution to a problem or a product with a specific attribute.” However, product prices vary from mid to high and may appeal more to younger professional woman. Customer is also looking for a more relaxed environment than Ulta or Sephora
Site Requirements: 2,500 SF
Expansion Plans: Currently has 140 stores in the U.S., with 3 new stores opening every week – looking to expand up to 24 more bluemercury stores in 2016 and 18 bluemercury shops within Macy’s stores