Monday, September 11, 2017

Can fashion week and cultural events help local businesses?

Nur is an associate at Larisa Ortiz Associates

This week, the trendiest in fashion and the most influential in social media befall the streets of New York City to witness the series of events that showcase exclusive fashion collections of some of the world’s most revered designers. Over 200,000 models, photographers, stylists, designers, artists, celebrities and attendees are estimated to visit NYC annually in the Spring and Fall as a result of New York Fashion Week (NYFW). According to NYCEDC (2013), NYFW generates approximately $900 million in total economic activity each year, including more than $550 million in direct visitor spending – retail, eating and drinking places, hotel stays. According to another Fordham University report, on average, each attendee is reported to spend about $650 during the 8-day event. (But we all know that’s probably not even close to what Kim Kardashian will be spending this week.) The economic impact of such a large-scale cultural event is undeniable, however, what does it really mean for small, local businesses?

The types of businesses that offer products and services directly related to the cultural event, and in this case, Fashion Week, will of course see the greatest impacts. Hair salons, make-up stores, apparel stores are some of the more obvious examples. Attendees of NYFW are going to need new last-minute outfits, blow outs and make up done by professionals so businesses that offer these services are likely going to see high returns this week. Furthermore, if the right influencer happens to walk into the business for a hair-do, that’s free advertising in the form of Instagram and Snapchat stories.

Small product launches intended to coincide with the larger cultural event can also drive foot traffic to local stores. Rihanna’s launch of her new Fenty Beauty product line at the Sephora store in Times Square last Friday, for example, led to massive crowds of fans queuing up outside the store even past midnight.

Food and drinking places are another retail category that will likely feel positively impacted by NYFW. Fashion magazines and blogs often feature restaurant guides leading up to NYFW and this will be most impactful on places located close to fashion show venues (think pre- and after-show bites). This year, the main venues like Skylight at Moynihan Station and Made @ Milk Studios are located on the west side of Manhattan, in Tribeca, Chelsea and Midtown. Restaurants and cafés in these “fashion-centric” neighborhoods are already seeing hoards of fashion icons and NYFW attendees grace their establishments throughout the week and will likely benefit from greater traffic even after the event through social media and blog features.

Although the trickle down spending at local businesses from attendees of cultural events are super beneficial, there are limits to the types of businesses that can attract these customers. Like much of our experience in downtown and commercial corridor retail market analyses, there are also specific types of customer segments that presumably attend various cultural events such as NYFW or Afropunk Fest, a music festival celebrating the cultural cornerstones of afropunk through music, film, skate, and art.

For one, the NYFW attendee is much more likely to fall in the ‘Urban Chic’ and ‘Trendsetter’ customer segments established by ESRI Business Analyst, a data service provider specializing in market research. With middle to high range median household incomes, these groups of predominantly White ‘customers’/ attendees are young and choose to ‘spend their disposable income on upscale city living and entertainment’ (ESRI, 2016). They are also fashion-forward and image-conscious and therefore keep up with the latest styles and trends through up-to-date technology.

Meanwhile, Afropunk Fest attendees may be more diverse – they can be ‘Trendsetters’, as described above, or they can also fall in either ‘City Strivers’ and ‘Set to Impress’ segments. These ethnically-diverse customers, while also image- and fashion-conscious, tap into local popular music scenes and work around these interests with lower median household incomes. They remain sociable consumers who exhibit boldness in their purchasing decisions but also seek affordability.

Given these particular traits, nearby small, local businesses need to be actively aware of the types of visitors attending these cultural events and appropriately adjust and adapt marketing tactics, store design and format, and product offerings to fully take advantage of visitor spending.

Many bars along Myrtle Avenue, located less than 10-minute walk from Commodore Barry Park for example, have partnered with the organizers of AfroPunk Fest as venues for after-parties and post-show events. During the weekend of AfroPunk Fest, these bars and even soul food restaurants feature musical acts and performances that complement the artists performing at AfroPunk Fest in order to be able to attract the same customers/ attendees in the later hours of the day. These events are often free-of-charge and accessible to all. Other music venues throughout Brooklyn have also jumped on the same boat and changed themes for the weekend of AfroPunk Fest, including the famed Bushwick club Baby’s All Right.

Unfortunately, the US Open, another big sports and cultural event in NYC, falls short of having the same impact on Main Street Flushing despite being an affair that attracts 700,000 attendees to the area annually. Located at Arthur Ashe Stadium in Flushing Meadows Corona Park, Queens, the US Open is still so physically isolated (about 30 minute walk from Flushing Main Street and closed off by Van Wyck Expressway and Grand Central Parkway) that the trickle down spending is unlikely. Furthermore, the event barely makes an effort to integrate with the surrounding community as it functions as an insular village during the weeks with food vendors and bars serving sponsored vodka and beer all operating within the confines of the tennis center.

While living in a city with a year-round active calendar of cultural events is enviable, it is not always the ideal ecosystem for businesses that we wish it was. Fortunately, some events such as NYFW and Afropunk Fest, have demonstrated that large-scale cultural events can bring some benefits to the local retail and business environment when:

1) Products and services on offer in local businesses are directly related to the cultural event. E.g. Local bars and entertainment venues benefit from music festivals while apparel boutiques and hair salons benefit from fashion week.

2) Event venues and the main streets or retail cores are physically connected and accessible. Visitors must be able to easily access these places before or after events.

3) Events and festivals are carefully integrated socio-economically with local businesses and residents through programming and price points

While we can hope that more cultural event organizers become conscious of their community impacts and encourage attendees to spend their dollars at local salons, boutiques, restaurants, cafés and bars, small, local businesses also need to take the time and effort to be aware of these events and appropriately adapt offerings and marketing tactics throughout the year. 

No comments:

Post a Comment