Planning a downtown street fair? Five ways to avoid undermining retail sales for local businesses

It is not uncommon to hear merchants complain about the singular annual event or street fair. These activities are common among many downtown organizations trying to promote visitation, and to be fair, thoughtful downtown events are important to successful revitalization efforts. But if you ask some business owners, they may not be having the intended effect. Consider the case of the local barber shop whose regular customers avoid the area during downtown events. Or a flower shop that can no longer make deliveries because the street is closed. How do you avoid some of these common errors? And how do you execute a great event that helps local businesses?  I've rounded up a few examples of common mistakes and potential solutions. Is your organization doing any of these things?

The challenge - the main corridor of the festival is packed with
people but the sidewalk side where the business entrances are is empty. 

A better solution - don't block storefronts. Use existing downtown open space
between two retail streets for the market. This way, the events
serve as a link between shopping areas and helps to extend the average customer length of stay. 

A better solution - if you've got a single loaded retail corridor,
place the farmers market stands across the street to
create a double loaded corridor.  This enhances the density of
downtown offerings and encourages cross-shopping. 

A better solution - Don't block access to the sidewalk and local
businesses. Notice the gaps between the vendor stalls that allow for ease of
access between the sidewalk and the main thoroughfare. 

The challenge: Make sure to site your market where the downtown action is.
You want to ensure your market is in close proximity to
your downtown businesses, otherwise the opportunities for
synergy and shared customers are lost. 

A Response to APA17: The dangers of calling it a Modern Food Hall

One of the more popular sessions at the National Planning Conference last week was one titled “Modern Food Halls: Redevelopment Aid or Trend?” The panel discussion was led by Nicolia Robinson of Cooper Carry, an architecture, design and planning firm based in Atlanta, Georgia. Joined by her colleagues Sarah Jane Bonn and Daniel Sweeney, Nicolia led the discussion around one of the most talked-about trends in cities across the country. She opened the floor with a brief presentation on what the drivers of food halls were and attempted to distinguish them from what many of us recognize as food courts and markets.

Food Trends

In 2015, there were only 70 food halls across the nation. Last year, the panel cited that that number had risen quickly to 130, and by the end of 2017, we are expected to see more than 200 food halls across America.

This rapid growth in food halls, like restaurants, can be attributed to the rising trend of eating out amongst consumers. In an earlier post, we wrote about the fundamental and cross-generational shifts that have led to restaurant industry sales surpassing grocery sales for the first time in history. For food halls, the large proportion of millennials eating out more frequently is particularly driving its rapid growth and popularity.

On top of this, the panel claims that food halls are also meeting the needs of consumers who are seeking more “sophisticated and authentic flavors and experiences while dining out”. This has been echoed in recent media reports that claim consumers are “demanding more variety, better quality food while also seeming fatigued with the conventions and time investment of a multi-course, full-service meal” at traditional restaurants.

Defining Modern Food Halls

So what exactly is this food hall we’re all talking about? While the panel from Cooper Carry attempted to distinguish food halls from the traditional food court and market by delineating specific traits for each of these places, the lines began to blurry as they continued to dive deeper into case studies and examples. Before we begin to dissect the discussion around the definition of food halls, here are the characteristics the panelists attached to Food Courts, Markets and the newest hybrid, Food Halls:

Food Court	Market	Food Hall - Marries best of both food court and markets
Mostly national brands	Mostly local brands; mom and pop stalls	Both local and national brands (mostly local)
Fast food to fast casual	Ingredient-focused, produce-heavy stalls	Curated mix of tenants
Convenience		Plenty of gathering space (communal aspect)
Few retail options	Mostly Retail	Balanced retail and food

And here are the different ‘Scales and Types of Food Halls’ that have been observed by the panel:

Micro	Neighborhood	Destination
<10,000sf	10,000-30,000sf	30,000sf
Located in mixed use development, usually in difficult spaces to lease out to other operators

Food Halls

According to the panel, there are some key elements that make a food hall a food hall. First, there is often a heavily curated experience. The trouble with the ‘curated experience’ however has been that it is often targeted toward younger consumers that are more educated and have higher disposable incomes. After all, this is the demographic group choosing to live in urban, dense areas or in transit-oriented neighborhoods where these food halls are often located – key element number two.

Although this was not directly addressed by the panelists, several planners present in the room were rightfully wary of the implications of the food hall’s curated experience. Prices of meals at food halls, as one audience member noted, are often high compared to other available dining options. The noisiness and bustle of food halls also largely appeal to younger adults without children or elderly companions.

Panelists also noted that another key element is the detailed attention often paid to branding food halls as modern amenities and advertising them on social media. This seems troubling as it necessarily excludes certain groups of users from food halls, for example traditional older customers or non- English-speaking customers.

Finally, food halls are supposed to have a variety of authentic tenants. Although this was not clearly explained in the session, I would hazard a guess that this was in reference to locally-owned businesses with new food concepts.

There appear to be a number of problems or inconsistencies with the food hall as defined at the session. In fact, when the floor opened for discussion, many in the audience jumped at the opportunity to ask about the foreseeable economic and social impacts of food halls that was not addressed in the presentation. Issues raised by audience members included insufficient parking and seating space for large crowds, and finally, the elephant in the room – who are food halls for?

In response to crowded spaces, Daniel Sweeney quipped that while seating can be hard to find in these popular food halls, this can in fact be beneficial to vendors. The busyness of the food hall creates a vibrant atmosphere for visitors and makes the food hall appear to thrive.

 

However, when must the line be drawn before the crowds begin to cause discomfort for regular patrons, forcing them to find alternative options and potentially resulting in drop of sales for vendors?

In fact, Chelsea Market here in New York City already suffers this shortfall. As soon as the food hall began to primarily serve tourists and attracted crowds of out-of-towners (over 6 million national and international visitors annually), locals no longer found the shopping environment conducive for daily  needs. Today, many locals intentionally avoid this former neighborhood jaunt. It appears as though food halls run the risk of becoming a visitor attraction rather than a local neighborhood amenity. This very issue raised red flags for me when the panelists started to use Essex Street Market as a case study of a neighborhood food hall.

The Problem with the Food Hall Label

In the past few months, LOA has been working with the New York City Economic Development Corporation (NYCEDC) to create a tenanting and marketing strategy for Essex Street Market as it prepares to relocate to a new facility across Delancey Street. LOA developed a strategic market positioning statement for Essex Market that defined key customer segments before recommending strategies for attracting new tenants and vendors.

Essex Market is, by definition, a public market owned and managed by NYC EDC. It is not a food hall, nor does it aspire to be one. The market is New York City’s oldest public market following Mayor La Guardia’s efforts in the 1930s to clear the city’s streets of pushcarts and build a network of modern indoor public markets. For more than 75 years, Essex Market has been a fixture in Manhattan’s Lower East Side and an important source of affordable products for local shoppers, from Latino and Asian immigrants, to the new millennials who have recently began moving into the neighborhood.

The mission of the market remains to serve the needs of low and moderate income residents in the neighborhood and this can be observed by the mix of tenants at the market. Vendors such as Saxelby Cheese Mongers and Essex Farm Fruits and Vegetable for example accept EBT and offer products at low price points. Even as the market expands in size at its new facility, prepared foods vendors will remain a small percentage of the overall market tenant mix. Ingredients-based purveyors will continue to make up over 70% of the market, including specialty ingredients such as fresh coffee beans, American cheeses and traditional spices.

In addition, NYCEDC and the Essex Market management team, will continue to remain committed to scouting hyper local vendors to fill the remaining spaces at the new facility with preference given to vendor applicants offering farm-related or ingredients-based products. These tenanting strategies are intended to maintain Essex Market’s position as a public market with retail that contributes to the local community’s wellness through fresh, affordable food.

Although the panel had intended on showing the audience a positive example of a publicly-managed neighborhood food hall, they may have taken a leap altogether in labeling Essex Market a food hall. Let’s take a look at the criteria set by the panel for food halls and how Essex Market doesn’t quite meet them:

Food Hall	Essex Market
Both local and national brands (mostly local)	No national brands
Curated mix of tenants	Curated to the extent that EDC is maintaining 70% ingredients-focused, produce-heavy purveyors
Plenty of gathering space (communal aspect)	Yes in the new facility
Balanced retail and food	No - 70% ingredients-based retail

Given that there are already some implications associated with food halls, we need to be careful with the way we use the label. In a previous post on food-based developments, we began to explore some of these negative impacts.

“…when food-based developments do not serve the wider community, it stands to run into accusations of causing gentrification and rising property values. In Anaheim, California, where a former fruit packing and distribution center was transformed into a food hall dedicated to local vendors, it has quickly evolved into  a selling feature for new residential developments in the neighborhood. Broookfield Residential for example is hoping to “attract young buyers with units priced between $300,000 and $400,000” in a neighborhood that was once a sleepy town known only for Disneyland. Whether intended or not, the Packing House food hall in Anaheim has led to huge inflow of development into the neighborhood, raising prices of property in the area.

Furthermore, food halls that only serve ready-made meals or chef-made meals are often too upscale for the average customer. While they may help fill gaps in a food desert, prices often prevent lower income bracket groups from accessing these freshly-made and locally-grown foods since most prepared foods are not even eligible for SNAP benefits.”

For all of the benefits food halls claim to have as incubators for small, local businesses and chefs, there are plenty of other players in the industry that are simply abusing the trendy name for profit’s sake. Let's not call it a food hall, if it’s really a market or a food court. 

Fake News - Retail is not dead!

This past weekend we had the privilege of attending the National Planning Conference at the Javits Center here in New York City. There were over 600 sessions, discussions, and mobile workshops on topics ranging from retail and downtown revitalization to short term rentals and agricultural tourism. A theme that seemed to permeate many of these discussions was one of continued strength and adaptations in brick-and-mortar retail. City officials, architects, market consultants, and planners at various panels resoundingly agreed that retail was not dead in their communities, or in communities they were working for, and that there are still steps to take to support its growth. We've all read the recent reports on large national retailers like Macy's pulling back on storefronts and abandoning suburban shopping malls. However, this calamitous picture being painted in the media of retail's impending doom seems to be clouding the realities on the ground. As Steve Dwoskin, Vice President of Callison RTKL, aptly said in his session on The Reality of Planning for Retail, "It's Fake News".

Retail Trends
There are so many ways that retailers today are adapting to changing consumer trends and habits in order to sustain growth. At the same session, Kate Coburn a partner at HR&A, explained the importance of understanding the changing shopper demographics across the country and using that to retail's advantage. Millennials, as many of us know, currently make up the biggest proportion of the population with over 92 million of them here in the U.S. This group, combined with the growing Generation X-ers, are the shoppers that retailers need to watch and adapt accordingly to. More importantly, there is also a growing Hispanic and Asian population here in America that needs to be accounted for in retail market strategies and downtown retail tenant mix. Not to forget the high rates of urbanization that are also forcing retailers to rethink configurations of properties, store formats, and partnerships.

Here are some ways in which retailers, downtown organizations, and developers are adapting to these dynamic consumer trends:

1. Reconfiguring properties from single purpose malls to mixed use developments in more urban and transit-served areas
2. Changing store sizes and formats to fit downtown main streets rather than suburbs
3. Repositioning and retenanting resulting in many developments shifting reliance on department store anchors to entertainment and dining anchors
4. Focusing on experiential retail as a result of growing e-commerce competition
5. Targeting localized tenants that cater to diverse demographics in different localities
6. Using multimedia strategies and moving from traditional media to social media advertising

Ikea was an example of a retailer that has been seen to adapt to its changing consumer habits. Its original 400,000 SF model has since been shrunk to 100,000 SF stores in order to be able to fit into more urban places. Its aim was to "bring the Ikea home furnishing range and expertise closer to customers" who lived in urbanized areas. Although these smaller formats are not able to carry full product ranges, customers are still able to order from the Ikea online range for collection at dedicated collection points of smaller format stores - similar to Target's fulfillment centers that we wrote about last week. It's important to acknowledge, however, that furniture is one of few retail categories that has fortunately been less vulnerable to e-commerce. Make-up/ cosmetics, services like hairdressers and laundromats, and restaurants are some other categories that continue to thrive despite the growing shift toward online shopping because they all require in-store product experience and demonstrations before consumers are able to make purchases. Likewise, local businesses that offer authentic experiences are becoming most valuable in today's retail climate. 

What cities can do to create a supportive system for all types of retail to thrive

1. Provide appropriate spaces for retail
• Cities can often provide tax incentives to landlords and property owners so that they may renovate and provide viable retail spaces. In our work, we 've often seen downtowns struggle with high ground floor vacancy rates and yet long lists of potential tenants. This is often the case because tenants and small businesses do not have the capital to rehabilitate and fix up the vacant spaces in order to make them viable for business
2. Be strategic about co-tenancies
• A block-by-block tenanting strategy should be developed by merchants associations or downtown organizations in order to effectively cater to communities living in surrounding neighborhoods and also to increase retail diversity
• Curating retail mix can only be effective when property owners are involved in the strategizing. However, this often requires that cities provide financial incentives for them to be active in such discussions.
3. Grow customer base close to retail corridors
• Provide diverse housing options that meet full range of household incomes needed to support a variety of retail
• Encourage flexible spaces of employment (office and manufacturing) near retail corridors that encourage strong daytime worker populations with a range of income and interests
4. Right-size parking and vehicular areas
• With the increasing use of shared car services like Uber and Lyft, and with retail moving to urban places, parking requirements no longer hold the same weight as they did. Retailers in urban areas are instead seeing the need for drop-off areas more so than large swathes of parking. Some downtowns are even revisiting parking requirements for retail uses given the changing environment.

Ways to support small businesses through zoning
More specifically, zoning can be an effective tool in supporting the growth of retailers and small businesses. A panel discussion opened by Arista Strungys, Firm Principal at Camiros, Ltd, dived into some tried and tested zoning modifications and tools that have lowered barriers to entry for businesses. The session cautioned municipalities about out-of-date use structures that were often the biggest barriers to small businesses thriving downtown. According to the panel, building flexibility into zoning and land use ordinances is key to supporting small businesses, including retail. This flexibility can be achieved by establishing a generic use approach rather than specific use approach and also tailoring uses to different districts. The former encourages readability of the ordinance by eliminating pages and pages of descriptions that outline every specific use allowed. Instead of listing retail categories such as 'Clothing Stores' or 'Book Stores', the ordinance simply says 'Retail Goods Establishments' to build in flexibility for allowed uses. Tailoring uses to districts, on the other hand, is best represented in a 'Uses Matrix' like the one below. This approach also encourages readability of the ordinance and eliminates the cumulative structure of traditional ordinances.

Eastern Neighborhoods Zoning Guide - Sample Use Matrix

Finally, monitoring new types of uses is also key to being flexible for businesses. Robert Azar, Deputy Director of the Department of Planning and Development for the City of Providence, Rhode Island showed how his City was encouraging small businesses by introducing newer use types in the ordinance including Residential-Commercial/ Residential-Professional uses that encourages live-work spaces downtown. By doing so, the City is using these new permitted types as a calling card for itself - inviting newer types of businesses downtown such as micro craft breweries and specialty food producers and retailers.

For all the news articles and media bombardment of brick-and-mortar retail declining, there is also a strong movement at local levels to grow retail in dense, urban areas through a myriad of financial and regulatory tools. If your town or city is also doing something innovative to adapt to the changing retail trends and consumer habits, let us know! Get in touch at info@larisaortizassociates.com

Why commercial rent control is such a hard sell

On a recent visit to Utica, NY as a presenter at "Main Street Boot Camp", a workshop sponsored by the New York State Office of Community Renewal, I left the hotel for lunch. Downtown Utica is stunning. But the streets were quiet. It was cold and rainy and I didn't have much time, so I turned left out of the hotel and ended up at the first restaurant I saw. A local pizzeria. I walked in and at once regretted it. The space was dark, the food under the heat lamps looked unappetizing, and while there were a few people inside, it was fairly empty. The restaurant had clearly been there for awhile. I walked up to the counter and asked about salads (which were not listed on the menu). The woman behind the counter handed me an old menu and I saw the options were limited. I was embarrassed to do it, but I turned and left without ordering.  I thought for sure I could better.  I walked another two blocks in the drizzle and stumbled upon another dining spot. It had transparent windows and from the outside I could see the place was buzzing. This time I opened the door and the line was backed up all the way to the door. There was not a single place to sit! After waiting in line for ten minutes, I was told that the kitchen was so busy that it was going to take another twenty minutes for my lunch. Unfortunately I didn't have the time. So I went back to the hotel - now three blocks uphill - and ate a mediocre buffet at the hotel restaurant.

My take away? It was pretty clear that the pizzeria was no longer meeting the needs of the local customer base. The business owner hadn't invested in the storefront or the interior appearance in quite some time. The place was stale, and felt like it. On the other hand, a healthier food concept down the street could barely meet demand.  And while I can't say for sure, it's more likely that the owner of the pizzeria is the one griping about high rents. As a public sector partner, differentiating between these two kinds of businesses when applying public policies is exceedingly difficult. How can you ensure that limited public resources - resources that could be going to schools and parks and public resources - are not being utilized to help business owners who quite frankly should be doing a better job. And to make matters worse, some communities are pursuing policies that might even penalize success. Imagine that the small, local restaurant was so successful that it rapidly spun off a few additional restaurants. Don't we want that kind of small business growth? Yet sometimes well intentioned policies like "formula ordinances" (policies that limit stores that share a "formula", including menu, decor and offerings, i.e. chains) are put in place that effectively prevent businesses with too many stores from locating in certain defined districts. While these policies may have their time and place, these two businesses should give us pause before we employ such blunt tools to solve for problems that require much more nuanced approaches.

This pizzeria was in clear need of updating, inside
and out. It was my first lunch option. And despite
not knowing whether I would find another lunch
spot down the street, I took the chance. 

This bakery/cafe, about a block away, was
packed to the gills at lunchtime.
They were clearly doing something right. 

Inside the bakery/cafe, patrons were standing around
waiting for tables or for their orders.

Round Up: The Banking Shift, Global Growth Hotspots, Placemaking = Environmentalism?, Crowdfunding vs Grants

Four Trends Driving the Shifting Demand for Traditional Bank Branches

Gone are the days of seeing an overabundance of banks on every corner. Demand, technology, and customer mix are changing things up. Likely to have lasting impact on commercial corridor retail mix.

The Global Growth Hotspots of the Future Are Here

The takeaway of this Bloomberg piece is that urban emerging markets will see the greatest concentration of growth and will become "major contributors to economic performance."

Is placemaking a “new environmentalism”?

This piece bids the question whether placemaking is becoming a way of protecting the human habitat. Yes we need to build our environment to incorporate human growth but it proposes that it can be sustainably done.

Why You Should Consider Crowdfunding Your Neighborhood Project (Instead of Writing a Grant)

Grants can be tedious and impersonal to the community. This little tidbit shares ideas why crowdfunding a neighborhood project could be the real solution.

WAIT! Before you Build that Downtown Parking Structure

For any of you well versed in the concerns of downtown merchants, parking availability often looms large. It is rare that we do a downtown analysis where merchants don’t complain about parking. Over the years, many downtown communities have turned to structured parking as a solution to these real or perceived parking woes. Sometimes it has worked. Many times, it hasn’t. We are here to say please think twice before deploying this solution because structures are expensive, difficult to maintain adequately, and are not the panacea that merchants and others think they might be.

Most of these structured lots were developed over the past two decades as a well-intentioned response to competition from malls and shopping centers, with their seemingly endless oceans of free parking. Now that we have had some time to see whether some of these structured lots have had the desired impact, the analysis lays bare the challenges associated with developing, managing and maintaining these structures so that they remain an amenity, not a disincentive, to downtown shopping. Here are a few common pitfalls.

Parking garages sometimes exacerbate safety concerns, especially among infrequent downtown shoppers

Did you know that infrequent downtown visitors are 30-50% more likely than frequent visitors to feel insecure when using downtown parking structures?

The graffiti in this lot does not make users comfortable in this environment. 

In our work we have surveyed residents in communities with downtown structured parking and have found stark difference in how downtown parking structure are perceived by those who shop downtown versus those who don’t. Two New York suburban downtown communities where we have conducted surveys, one in Westchester County and another in Long Island, offer similar lessons. In both communities, non-shoppers (those who visit downtown less than once a month) were nearly twice as likely as shoppers (those who visit downtown more than once a month) to feel insecure when using downtown parking garages. Also, non-shoppers were about 30-40% more likely to feel insecure when using downtown surface parking lots. As downtown's struggle to attract and retain new shoppers, we need to understand and overcome the hurdles that keep people from coming downtown in the first place. And the parking garages in these downtown communities aren't doing us any favors. 

The other thing to keep in mind is that retailers know about these safety concerns and take them very seriously. In an industry where margins are increasingly affected by on-line shopping alternatives, even the slightest impediment to shopping undermines retail sales and makes it hard for businesses to make a profit.

Location matters

This one is simple. If the lot is not in the right location, don’t do it.  And by the “right” location I mean a spot immediately adjacent, or visible, to where the activity is. If that proves impossible, be absolutely sure that the path from parking structure to the “action” is well lit, nicely landscaped and feels safe for people to walk. In this case, it is the female customer that you have to keep in mind. I once had a very short conversation with a drugstore operator who looked at a site plan for a mixed-use affordable housing project with parking in the rear (done, of course, to maintain the street wall). The problem for the operator was that the parking did not provide a direct line of sight from someone’s parked car to the entrance of the drugstore, and two entrances was not an option for the operator given their prototypical layout. The CVS rep said point blank, my female customer wouldn't feel comfortable in that environment, so I can't even consider it. 

Not all landscaping is made equally. This passage from Main Street to a rear structured parking lot has
large bushes that might raise concerns - especially from a woman walking alone at night. 

A passage to rear surface parking that is a bit more welcoming. There is lighting, the shrubs have been trimmed and do not allow from lurking, and the benches mean that on any given day people might be sitting offering "eyes on the street"/

This downtown structure in a small town in Puerto Rico is two long desolate blocks from the main Plaza. Most of the shopping activities occur on the other side of the Plaza, making this location not particularly appealing for shoppers who do not intend to spend alot of time downtown.  

The two walk block from the Parking Structure to the main Plaza offers pedestrians very little engagement. 

Maintenance and Operations matters

For those of you who have worked in the public sector, you know the deep dart secret of capital funding. It is much easier to get something built than to maintain it. Maintenance requires an annual budget appropriation. Getting a one time infusion of capital to build something is often a lot easier. Keeping the elevators in these structures running, removing graffiti, making sure payment is simple and not too confusing for the first time user, all requires keeping track of the structure and making regular investments in maintenance and operations. To address this issue, many communities have resorted to creating parking authorities that ensure that the revenue from the parking structure is plowed back into an organization that manages and maintains the structure. Unfortunately, many communities see the line item for maintenance as an easy thing to cut in lean times.

Infrequency of Use

While this is mostly anecdotal, the utilization rates of many of garages we have seen is often a lot lower than anticipated. We often see many, many vacant spaces when visiting downtown parking garages. The cost of building these spaces is typically a significant public commitment, so the waste is really palpable.

So when does downtown parking make sense?

Yet despite all these concerns, sometimes downtown parking structures do make a lot of sense. For example, when you have a downtown anchor, such as a theater that is attracting large numbers of people at the same time, structured parking located in the immediate vicinity of the theater can making the experience much more palpable to the theater goer. New York City’s Theater District heavily depends on structured parking options for the many theater-goers for whom public transportation options are inadequate (not to mention less appealing way to get home for the many who have traveled quite some distance in fancy clothing and high heels).

Attractive signage announces the walkways to the downtown
surface parking areas behind the Main Street in South Orange, NJ

Other alternatives include organizing and rationalizing downtown pocket parking lots. In South Orange, NJ the many small lots in downtown are managed by a parking entity. Moreover, connections to the small lots parking are visible from Main Street and maintained by the downtown BID. Another good example is Great Barrington, MA, where rear surface parking is comfortable, landscaped and walkable.

We’d love to hear more about your downtown solutions. Please share them with us at info@larisaortizassociates.com.

Target's Reinvention

E-commerce has changed the way that many of us shop, and as a result,  retailers with brick-and-mortar stores are having to reinvent the wheel in order to continue capturing consumer demand. The latest retailer to reveal its new approach to omni-channel retailing is Target.

Although Target announced that it would continue to heavily invest in its digital outreach, it is also doubling down on its physical stores and creating flexible-format stores that can better "offer guests an elevated experience, while ensuring fast, easy pick ups for online orders". That's right, Target's formula is to elevate its physical stores as fulfillment centers.

In 2017, Target is expecting to completely remodel 110 stores and open 30 new small-format stores to expand its footprint into dense urban neighborhoods, including in the Cambridge where we are currently working on a citywide retail strategy. Here in New York, we're seeing new Target stores opening across all boroughs and just last week, it was announced that Target was planning a store right here in Jackson Heights.

The size of an average existing Target store is approximately 130,000 sf. However, the new urban and smaller-format stores will only be a fraction at an average of 20,000-30,000 sf.According to Target, the smaller format stores are intended to both reach urban dwellers who tend to be more affluent but also expand the brand into areas that are currently under served by Target. It is also hoping to use this opportunity to also reach many tourists from around the world who shop in dense urban areas like New York City.

Keeping in line with Target's formula to offer an omni-channel retail experience, these stores will feature two entrances - one with exciting displays of exclusive brands and seasonal products and the other with a quick Order Pick-up and grab-and-go food and wine/liquor shop. The former entrance is clearly for a shopper who is willing to spend valuable time browsing the store, while the latter serves as a convenient escape route for the shopper who is avoiding shopping. This second entrance for hurried shoppers is expected to have self-checkout lanes and dedicated Order Pickup Counters. Reserved parking spaces in some locations will also be conveniently located outside this second entrance to allow Target associates to deliver online orders to customers in their cars.

The split personality of these new Target stores is further emphasized in the in-store technology and store design. Elevated, cross-merchandise product presentations are expected to encourage browsing and are designed to amplify Target's exclusive lines of products - from furniture to apparel. Meanwhile, Target store associates will be equipped with new technology to search inventory, take payments from a mobile point-of-sale system and arrange deliveries all conveniently from the sales floor. 


Target will also be upgrading its grocery departments in its new store formats by increasing fresh produce selections and grab-and-go meal options. It appears as though Target is trying to venture into the world of grocery stores. The grocery departments will be located on lower floors and is expected to meet the demand of office workers in urban locations such as TriBeCa or Herald Square in New York City. 

The Rise of Transit Retail

Bugis MRT Station.

Growing up in Singapore, transit stops were never simply places to catch a bus or get on the mass rapid transit. They were often also convenient places to pick up a quick sandwich, ice-cold bubble tea or even groceries. All across Asia, transit stations have been popular retail hubs for decades. Stations often offered a diverse mix of convenience retail and in some cases go so far as becoming shopping destinations in themselves.

The concept of transit retail, or retail at transit stations, is a “new frontier for retailers” in other parts of the world, particularly here in the U.S. Many chain retailers and commercial real estate brokers here are only beginning to view transit stations as viable locations for small format but high volume convenience stores. According to a recent report released by CBRE on retail expansion, one-fifth of brands from the Americas and the Middle East are targeting travel hubs as an emerging format for expansion, whether it be airports, commuter train stops, or railway stations.

Forms of Transit Retail

Transit retail does come in a variety of forms. They can be found:

Turnstyle Food Hall at Columbus Circle. Photo: Cristina U.

a) Before the turnstiles as in the case of Turnstyle at Columbus Circle, or

b) After the turnstiles like the newspaper kiosks on the platform of the West 4^th subway station here in New York City

West 4th Subway Newspaper Kiosk. Photo: Jens Schott Knudsen

They can also be found at-grade or below-grade, depending on the design and structure of the transit station. Personally, I have always had the greatest appreciation for the retail options found below-grade located just before the transit turnstiles. Thunderstorms during the monsoon seasons in Singapore were common so thousands of commuters like me would often seek shelter at these subterranean retail outlets, sometimes for up to an hour! This form of transit retail was also particularly useful on the hottest days of the year, and I would imagine will be equally functional during the extremely cold winters we face here.

While below-grade retail has the added benefit of providing shelter from extreme weather conditions, at-grade retail storefronts better serve surrounding neighborhoods and its residents. In London, the Earl’s Court Station served by both the Circle and District Lines best illustrates the opportunity that at-grade retail storefronts have to seamlessly connect transit to the rest of the neighborhood. The retail spaces that front Earls Court Road and that also mask the station from the high street, offer residents of the neighboring garden houses convenient retail and amenity including pharmacies, take-out restaurants, groceries, and financial services. While I was in college, I lived a block away from the transit station and always found myself picking up a couple of oranges or a bouquet of flowers from the local grocer situated by the station exit on my way home.

Designing at- grade and street-fronting retail bays however requires paying attention to local architecture. The retail-cum-station façade at Earl’s Court features buff glazed faience with green trimmings and all of the original windows of the station head house. This architecture allows the station to seamlessly weave itself into the old residential neighborhood with an ‘unbroken [historic] wall for pedestrians’.  

Tenant Mix at Transit Stations

In terms of tenant mix, transit retail mostly consists of grab-and-go items such as newspapers, magazines, coffee, packaged food, drugs and cosmetics. In a study by Yeates and Jones (1998), findings corroborated that retail tenants more likely to be located near commuter rail stations include coffee kiosks, quick food stands, and dry cleaners. Other typically observed tenants include banks, convenience stores, and pharmacies.

At more up-scale and new-build transit stations, the retail component is becoming more advanced, and is often transforming the stations themselves into retail and dining attractions or destinations. According to Robert Cervero, professor and chair of city and regional planning at the University of California Berkeley, this is very much like the Scandinavian model of TOD where the “transit station is not just a logistical node but also a place to go, in and of itself.” In some cases, transit retail outlets have also become hosts to special events and celebrations that bring in customers beyond just commuters.

The Oculus in New York City is a popular example of a transit station that has itself become an architectural centerpiece and also a shopping destination operated and managed by Westfield Corporation, the brand name of shopping centers worldwide. Oculus not only features the typical transit retail mix with its Starbucks and take-out restaurants, but also boasts European boutiques, jewelers, full-service restaurants and even an Apple store within its 365,000SF space. Pop-up retail merchandiser units or carts measuring about 48SF allow experiential and transactional retail concepts to change seasonally, encouraging fashion forward and trendy shoppers to visit. Likewise in Chicago, at the Ogilvie Transportation Center in the West Loop, MetraMarket is a 100,000sf street-level restaurant and retail development that offers neighborhood service and retail outlets such as CVS and CityFresh Market but also destination food hall, Chicago French Market.  

Benefits of Transit Retail

The mix of retail enables commuters and also neighboring residents the opportunity to have a one-stop shopping experience on the way home or on the way between places. As more people move from car-dependent locations to transit-served areas, the consolidation of trips—in other words, one-stop shopping—becomes a “sought-afterlifestyle factor” (CBRE, 2016).

Transit retail is also beneficial to transit authorities that are looking for an alternative revenue stream beyond just fares. In Hong Kong, the MTR rail corporation reported that in-station retail generates approximately $270 million annually. And in London, Transport for London, the city’s mass transit system operator, reported over $95 million in gross rental income in 2013 (NAIOP, 2015). As long as transit authorities negotiate leases on a triple-net basis and keep their role to the minimum of receiving checks and overseeing contract compliance, they will stand to gain form diversifying their revenue stream. While transit authorities may be concerned over littering and station cleanliness following transit retail, many testimonies have been given that counter that apprehension. Metropolitan Atlanta Rapid Transit Authority (MARTA) and Chicago’s Metra affirm that customers and tenants have respected the cleanliness standards given by the transit agencies. In fact, according to Denise Whitfield, MARTA’s manager of concessions, “riders respect the cleanliness of the system” and there has been no litter impact since the first phase of MARTA’s retail program was introduced in 2010 (NAIOP, 2015).

Finally, retailers definitely stand to gain from ‘captive consumers’ who have no choice but to stay at transit stations while waiting for a train or bus to board, or until the weather subsides. The critical mass of daily customers and the highly-trafficked locations at transit stops ensures that an adequate amount of minimum daily traffic supports retailers. Of course, the minimums may differ by geography. Where minimum daily traffic is not sufficient near transit stations, then retailers and transit authorities must ensure that there are other activities generating even more traffic in the non-commute periods.

Designing for transit retail

All over the world, transit retail formats are growing rapidly whether in new station developments or in old retrofitted stations. Paris’ Metro and London’s Underground are leading the innovative rehab pack by converting old subterranean mezzanines and ticket booths into small but viable retail spaces. Other transit systems may also soon discover that there are similar opportunities in underused spaces that can be converted into retail spaces for lease. 

Other resources:

Yeates, M., & Jones, K. G. (1998). Rapid transit and commuter rail induced retail development. Centre for the Study of Commercial Activity, Ryerson Polytechnic University. Retrieved from http://173- 254-37-135.bluehost.com/JSCR/IndArticles/Yeates_N298.pdf