2017 saw record-breaking retail closings, and it looks like 2018 could break that record again. CoStar Group calculated that more than 90 million square feet of retail space is set to close in 2018. This number is easily on-track to pass the 2017 record of 105 million square feet.
As more and more stores close down, it’s leaving empty retail spaces across the nation. This “retail apocalypse” is hitting landlords hard and leaving them with a big question: “How do I fill these vacant spaces?”
The obvious first choice is to find new long-term retail tenants. But that’s not always an option in today’s economy. In many cases, filling your empty retail spaces requires some creative thinking.
Rent To Pop-Ups
Pop-up stores rent retail space temporarily, often for just a few months. Holiday retailers who set up in the months around Halloween or Christmas are a classic example. Another is tax-preparation companies opening for a couple months before April. New businesses might also lease space temporarily to try out a market before committing to a long-term lease.
Rent is typically lower for month-to-month agreements, but it’s often better than leaving your space empty. If you’re going to rent to temporary tenants, it’s important to have basic infrastructure in place. Pop-up shops want a space with restroom, Wi-Fi, heating/air conditioning, and lighting already in place. A neutral color scheme is also a good idea so incoming tenants can personalize things how they want.
Retail space is typically in a convenient location and has readily available parking. Those two attributes can make your vacant spaces a good choice for non-traditional tenants. Day-cares, churches, community clinics, and cultural groups might be interested in your space if they know you have something available.
Renting to clients that aren’t retailers might have an added bonus. The extra traffic can make surrounding vacant spaces more attractive to retail clients, and boost sales for retailers already in the area. There’s one case in Fort Lauderdale, FL, where a theater rented rehearsal space in an upscale shopping center. This boosted sales in surrounding stores and the new location also brought more publicity to the theater. Now, the 3-year lease is turning into a permanent arrangement.
Rethink Retail Space
A long-term solution to vacant retail space could involve changing how you present the retail space. If you had a large store move out, it might be easier to rent if you sub-divide it and market the new spaces to small businesses. And if you’re responsible for a larger retail complex with multiple vacant stores, shifting your marketing focus might help. Some former shopping centers in Seattle, New York, and Denver are finding success with food-themed malls. Other locations are shifting to mixed-use and renting our former retail stores as office space.
If you found this article useful, then you’ll probably like my book, City on a Hill. It gives a no-nonsense take on economic development. Click here to check it out. And if you’re looking for expert advice on how to market your vacant retail spaces, get in touch with us. We’ll be happy to help out.
One of the more popular ways to start a new retail development project is to enter into a public/private partnership. This type of partnership exists between a city government (the public party) and a retailer or developer (the private party). Public/private partnerships are built on the idea of shared control between private parties and city governments as they work together toward a retail development goal.
In order to achieve their goals, public/private partnerships need consistent, coordinated leadership. Whether it’s an individual or a small group, good leadership in a public/private partnership is essential to keeping everything moving forward as planned.
What does a leader do?
In a public/private partnership, the leader is responsible for defining clear goals and keeping the project moving toward those goals. They’ll help bring the right parties to the table, act as the bridge between private project managers and political leaders, and give other stakeholders a forum to share their thoughts on the project. They’re also working to coordinate the development process and keep everyone on-point.
The most effective leadership for public/private partnership isn’t a top-down approach where the leader’s just giving orders. A project like this needs a leader who facilitates and inspires others to keep moving toward shared goals. The leader acts as a point person, getting everyone involved in the project together and then following through with them until the project is completed.
Where do you find public/private leaders?
You’ll need to find someone that both parties agree on as the leader. The last thing you want is for a leadership choice to cause fighting between the two groups. Keeping with the idea of sharing control, it might be a good idea to appoint one representative from each group. Then they can jointly act as project leaders.
You’ll also want to plan for the possibility that leadership could change during the course of the partnership. Many political leaders, for example, are replaced after a 2- or 4-year term. You’ll need a plan for transcending political and administrative changes. That’ll help ensure the new leaders have the same commitment and goals as before so the project can keep moving forward without unnecessary restructuring.
How do you lay the groundwork for effective leadership?
Even the best leader can’t do much good if the groundwork for your public/private partnership is shaky. Take the time early on in the process to prepare for public/private partnerships. Make sure both parties do their homework and establish a solid foundation for good decision making in the partnership.
One of the best things you can do early on in the process of creating a retail development partnership is to bring in a retail expert. Here at Retail Attractions, we have extensive experience helping communities and developers come together in partnerships that benefit both parties. We can help you lay a solid foundation for your retail development goals and we’ll work with leaders to ensure your project reaches completion. Get in touch with us today to get started.
As of mid-April, various companies are set to vacate more than 90 million square feet of retail space in 2018. This new number comes in the wake of department store chain Bon-Ton being forced into liquidation. RadioShack, Payless ShoeSource, and Toys “R” Us have also filed for bankruptcy protection. And other companies are scaling back their U.S. presence, including Rite Aid, Subway, and Best Buy.
Suzanne Mulvee, a senior real estate strategist at commercial real estate services firm CoStar, predicts Bon-Ton won’t be the last company announcing new closings this year. This doesn’t mean all physical stores are going away, but it does represent a massive shift in the retail industry.
So what does the “retail apocalypse” mean for you? Whether you’re a retailer trying to figure out how and where to build or a city that’s relying on retail growth, Retail Attractions can help you answer this question.
More Space Available
The retail closings are going to free up large amounts of retail space. Some property owners see this as a good opportunity to fill the spaces with more profitable tenants. But with so much space available, getting new businesses moved in is going to be highly competitive. Communities and property owners will need to know how to market their retail spaces in a competitive market.
After having seen so many retailers go under, other retailers and restaurants are going to be much more cautious when expanding into new areas. And that means it’s going to take a great amount of initiative and a well-planned strategy to recruit them for your community.
Another way that retailers are expanding more cautiously is by opening small-format stores. The smaller stores let customers experience the products in-person but focus on being a hub for in-store pickup, easy returns, and local delivery. Target, one of the few retailers actually expanding in 2018, expects to open 35 of these small-format stores this year.
Two Categories Still Growing
Rickey Hayes, the founder of Retail Attractions, says, “Two categories that will continue to grow [are] restaurants and groceries.” Even though there are online sites getting in on grocery sales and delivery services that bring the ingredients for quick meal-prep to your door, they still can’t beat the physical locations for convenience. People want to inspect their produce before they purchase it and make sure their perishable items don’t spoil in shipping. And if you don’t want to cook there’s no way to beat the convenience of a restaurant.
Search For Better Data
If you’re a retailer looking for smart ways to expand in today’s retail landscape, you’re going to need access to better data for finding emerging markets. The dynamics of retail have changed. And figuring out exactly how that plays-in to your business isn’t easy to do on your own. That’s one area where Retail Attractions can be a huge asset for your business.
Here at Retail Attractions, we’re keeping a close eye on the emerging trends in retail. Whether you’re a community looking to attract retail or a retailer wondering how to move forward, you need someone with a wider view who is able to accurately predict what comes next. Contact us today to learn more about how we can help you get through the retailpocalypse.
If you want to create a successful public/private partnership in a retail deal, it’s important that both sides do their homework. Whether you’re the public partner or the private partner, you’ll need to make sure that you’re preparing for the deal and that your partner is also doing their part to make sure that this deal goes smoothly.
Preparation before you sign a deal can make a world of difference in whether or not both parties consider the partnership successful. Both partners must be ready to invest in the project long-term and make a commitment to staying informed about their project for as long as the partnership continues.
It’s Not All About The Prep-Work
You’re not going to go into a deal without due-diligence to make sure that it’s a good idea. But do you know it’s also important to keep “doing your homework” as the project progresses?
Both partners need to go into the project with a good understanding of what is involved. And they also need to stay informed throughout their partnership. Whether you’re the public or private partner, you have to commit to staying informed about all the financial, social, and technical aspects of the project.
Sharing Your Information
As you’re gathering information about the project, you don’t want to keep it all to yourself. Both sides of the partnership should be doing their homework and sharing that information with each other. Retail development is a complicated process and good communication is essential to keep things moving forward.
Clarity and transparency should mark every stage of the partnership. And if you bring in a consultant like Retail Attractions, you should also share the work that they do. Your consultant can also help you come up with an information-sharing strategy that works for your partnership.
Communicate About Finances
Before you enter a partnership, you’ll need to do your homework regarding a joint financing plan. You’ll also want to find out about any limitations on your partner. For example, if you’re the private partner and you’re depending on public funding you might need to have a backup plan in case of budget cuts, administration changes, or emergencies that are outside your partner’s control.
Public/private partnerships allow for quite a bit of creativity in funding retail development. Both parties should be researching funding solutions and sharing their ideas with their partner. Once again, this is an area where a retail consultant can be a big help. They have experience working out development deals like yours and can offer suggestions for funding.
If you’re ready to get some help doing your homework when preparing for or while in a public/private partnership, get in touch with us. Retail Attractions has extensive experience working with both public and private partners. And we’re ready to help you develop a retail deal partnership that will benefit both parties.
The exodus of young people from rural to urban areas can take quite a toll on the population of a small town, or even one of the smaller cities. But even though Millennials (a group that includes anyone born between 1981 and 1996) tend to migrate into urban population centers, it’s vital that small towns find ways to attract and keep young people in the community.
In October of 2019, a Politico survey of American mayors found that 85% list attracting Millennials as one of their top 10 priorities. Millennials are a vital part of the workforce. They’re future homeowners in your community. There’s a good chance they’ll start up small businesses. And they’re one of the key demographics to look at when planning for retail development. But how do you get them to want to live in your town?
Engage With and Consult Millennials
Millennials are going to be one of your best resources when figuring out how to market your community to them. Start out by talking with the Millennials who already live in your community. Invite them into your governmental process. Interview them in-person. Send out invitations to take short online surveys.
Don’t rely on TV or newspapers to reach Millennials. When you’re asking them to weigh-in on your community, you’ll need to reach out in a way that they’ll notice. Setting up a social media presence for your community is a good start. But by far the most effective way to spread your interest in working with Millennials is by word-of-mouth. Once you start talking with a few Millennials, they’ll share their experiences with their friends.
Invest In Millennial’s Priorities
There are some specific things that the average Millennial is going to look for in a community. Whether or not your community fits into their preferred lifestyle will play a huge role in determining their interest. In general, Millennials are looking for
– High-Speed Internet: Millennials are a generation that relies heavily on the Internet for shopping, socializing, recreation, and work. If they can’t get high-speed internet in your area, they won’t be interested.
– Affordable Housing: Affordable housing is another key concern for Millennials, and it’s one of the biggest assets a smaller town can offer. It’s typically much more affordable to live in a rural or suburban areas than a major city.
– Hang-Out Spots: Millennials like the option to spend time in locations that are not their home or work. Coffee shops, micro-breweries, and similar locations are a big draw for Millennials.
– Entrepreneurship Opportunities: A high percentage of Millennials either already own a small business or plan to start a business in the near future. If your community is supportive of small businesses, entrepreneurial Millennials are more likely to move in.
Connect With Institutions and Employers
City government isn’t the only institution that’s interested in attracting Millennials. Educational institutions and local employers also have a vested interest in bringing in young people. Since their goals align with yours, they can be some of your best allies. Schools can help bring in new Millennials and encourage them to stay local by sharing opportunities in the community. And employers can work on positioning themselves to attract and retain Millennial talent.
A strong Millennial demographic is going to support the community and business institutions that already exist in your city. And it can also help your small market community attract new retail development. Young people are the future of any community, so make your town a location where they’d like to put down roots.
When cities take on economic development projects, they often do so in partnership with the private sector. This has the potential to benefit both parties. However, public/private partnerships are complex things and require plenty of planning to minimize risks and maximize the rewards. Even after you’ve found a private investor for your city to work with, there are still a number of things to sort out before formalizing the partnership.
All the key players in public/private partnerships have to agree on the rules and structure for their partnership early on in the process. You’ll want to formalize how decisions will be made, establish effective policies, and come up with a plan for implementing your partnership goals together.
Define The Plan and Goals
You have to agree on the process you’re going to use to make, implement, and reassess decisions. That’s something to talk about early in the process before something comes up and the different partners have different ideas on how to handle decision making.
It’s important to come up with a formal plan of action that’s agreeable to both the public and private partners. This will include a timeline for implementing the project. You’ll also need milestones that each side can use to assess how well their partner is doing at moving toward the shared goals. Agreeing on your goals and the plan for attaining those goals will give you a framework for making decisions regarding the project.
Assign Roles and Responsibilities
As part of the plan for reaching your partnership goals, you’ll need to define the roles and responsibilities of each partner. Both the private partner and public partner have to agree on their individual roles and responsibilities before moving forward with the project.
You should incorporate a summary document outlining performance standards, clear metrics, and a plan for dispute resolution into the contract you sign as part of a public/private partnership. Documenting which party is responsible for what is a key step in making sure that decisions will be made effectively in your partnership.
Include Checks and Balances
There should be a certain amount of flexibility in a public/private partnership. Things aren’t always going to perfectly smoothly during the development project. You’ll need a system in place that lets you reassess decisions if they’re not working out. Both partners should have the opportunity to check on each other’s progress and propose modifications to the process if things aren’t working out as planned.
Laying the groundwork for a successful public/private partnership is a tricky thing. When you’re working out how to establish a decision-making process that’s going to serve both partners, it’s a good idea to get some professional help. Here at Retail Attractions, we specialize in helping both sides in a retail development deal define their goals, understand their responsibilities, and establish a successful partnership. Contact us today to schedule a consultation.
Retail development and tourism development are often planned independently of one another. But if your community has the potential to bring in tourists that’s definitely something to consider when planning retail development. And if your community’s retail offerings can appeal to non-residents, then developing a plan to bring in tourists is key to increasing city revenue.
Considering retail and tourism together is simply good business. Ideally, your community’s retail and tourist offerings should work together to support the local economy. Here are a few tips to make sure you’re doing just that.
Understand Tourism In Your Community
What attracts visitors to your area? That’s the first question to answer when considering the link between retail and tourism. Retail on its own can draw in a certain number of visitors, but tourist attractions are also going to be important.
When answering the question of why visitors should love your town, think about what makes your community unique or extraordinary. What do you have that other communities don’t or that is better than others can offer? Natural attractions such as lakes and rivers should go on your list, as well as outdoor activities. And don’t forget to include attractions with historic or cultural significance, including local festivals. Tourist attractions like zoos, theme parks, etc. should go on the list as well, along with unique local businesses and artisans.
Compare Tourist and Resident Shopping Patterns
It’s important to know what types of visitors are currently being attracted to your community and what your tourism potential is. But it’s also important to understand your resident’s needs and their retail habits. As you’re planning for tourism, you have to be careful to meet residents’ retail needs as well.
In some cases, there will be quite a bit of overlap between residents’ and tourists’ shopping patterns. This means that the difference between residents and tourists won’t have much of an impact on your retail development strategy. But in situations where there’s a wide gap between the two demographics’ needs and interests, you’ll want to attract retail that can cater to both groups of people.
Appeal To Your Tourism Niche
Once you understand what your community has to offer and what the tourists you’re attracting want, then you can focus on developing your joint tourism/retail development plan. This is where you’ll answer the question, “What products and services complement local attractions and appeal to your tourists?” Answering this question will help you discover your niche in the tourism industry and set you apart from the competition.
It’s easy for a community to feel overwhelmed planning retail development on its own, and even more so when you take tourism into account. Hiring a professional retail consultant will make things much easier. Retail Attractions can help with analyzing tourist and resident demographics, developing an actionable plan, and attracting the retailers you want. Just contact us today to get started.
Your community needs retail. It helps bring in visitors, creates jobs, serves your local population, and increases tax revenue. But just knowing you’d like to bring in more retailers isn’t enough. You also need to know which retailers are missing and how to get their attention.
Having a clear plan is key to retail expansion. And to come up with that plan, you’re going to need a whole lot of very specific information. The easiest way to get that is to work with a professional consultant.
Finding Market Gaps
You probably already have some retail in your city. Even small market communities usually have a gas station or grocery store. And larger markets often have a variety of shops and restaurants already in the community. The question is, what else do you need?
To answer this, you’re going to need to find market gaps in your community. A gap in the market means there’s some need that consumers have which isn’t being met. You need to identify those needs and find a retailer or retailers who can fill the gap. Plus, you’ll also need to look at sites available for development and figure out what you can offer potential retailers who might build in your community.
Running The Data
Without up-to-date demographic data and market analysis, as well as an intimate understanding of how retail works, it’s very hard to figure out exactly which retailers would be best suited to your community. It’s unreasonable to assume that every city government should have someone on staff who’s an expert in retail development. It’s much easier, and more financially sound, to hire an expert consultant when you’re navigating a new retail project.
Retail Attractions has massive amounts of up-to-date data and analytics. These tools give us an advantage in figuring out what demand there is for certain types of business within your community. We can drastically shorten the amount of time your city would otherwise put into data gathering and analysis.
Once you’ve identified what sort of retail your city is missing and which retailers would best fill your market gaps, it’s time to reach out to them. Here, you come up against another challenge. You need to convince retailers to listen to you when you ask them to build in your community.
Retailers take on a big risk when they commit to building in a new market. They want to make sure that there’s a very good chance their new development project is going to succeed before they commit to building in your city. Hiring a trusted retail consultant with a solid reputation, like Rickey Hayes, means developers are more likely to take your community seriously as a good location for development.
Are you ready to take the next step towards expanding retail development in your city? Contact us and we’ll work with your community to figure out which retailers you’re missing and start bringing them into your city.
So you’re in charge of encouraging retail development in a small market community. You want the increase in traffic and tax revenues that expanding retail will provide. But you’ve also learned that attracting retail isn’t as simple as just contacting investors and developers. You need to show them that your town is the best choice for their next project.
Smaller cities face some unique challenges in attracting retail development. It’ll often take longer to accomplish your goal than a similar project would take in a medium- to large-size market. And you’ll have to get more creative in achieving your goals. But that’s certainly not a reason to give up. In fact, attracting retail to towns with a population under 50,000 is something we do all the time here at Retail Attractions.
Understand How Retail Works
The first key step in attracting retail to your small market community is educating yourself. The more you understand how retail works and what retailers expect from your community, the better prepared you’ll be. Our blog is a great resource for information like this. Here are a few posts to get you started:
- Be An Opportunity, Not A Risk
- What Are Retailers Looking For?
- 3 Key Roles Your City Plays In Retail Site Selection
Know Your Data
It’s vitally important to know your market data. Make sure your city has up-to-date and correct information regarding your trade area, including stats about the people who live in your community and those located close enough to shop there. That includes information on population growth, disposable income, and potential customer bases. You’ll also need information on your city’s regulatory climate and your willingness to partner with the private sector.
But even more important than data is knowing how to use it. Without a story, data is just numbers. And in a small market community, data can actually harm you if you don’t know how to present it. That’s why it’s so important to get expert help in collecting and presenting your city’s demographics.
Start Small, Then Expand
Patience is definitely a virtue when it comes to retail development. Even when Rickey was working in Owasso, OK and conditions were perfect for retail expansion it still took 10 years to retail the market. You can’t expect your small market community will turn into a booming center of retail overnight. Setting a series of smaller goals over the course of several years is more practical.
For example, let’s say your small market community is located on a highway. Adding a QuikTrip near the exit from the highway to your town will pull in a lot of business. Once you’re pulling in traffic, there’s an increased chance that you can get a couple of fast food chains like a Taco Bell or Chicken Express to open locations nearby. Those will also drive a bunch of sales and the tax from those will lead to an increase in revenue for your city.
Hire An Expert
One of the biggest challenges facing a small market community is getting retailers to actually see you as a money-making location. You need a way to stand-out from the competition. This is where having a retail expert on your side can make the most difference. It’s one thing to submit data to a company. It’s another for the decision makers to hear that your town is a prime location from a contact they know and trust.
Retail Attractions has extensive experience bringing new retail into small market communities. In fact, most of our clients are towns with a population less than 50,000. We’ve enjoyed a high success rate in helping small market communities increase their retail revenue. And when you work with us, Rickey Hayes will put his network of connections to work for you to help bring big business to your small community. Contact us today to get started.
Companies choosing a new location for retail development aren’t the only ones involved in site selection. If you want them to choose your city you have to play a role as well. Developers are looking for proactive cities ready to provide the sort of information and assistance they’re looking for in a successful partnership. You’re their best source for information about the community and local politics, and the only ones who can prove your city knows how to market its attractions.
Local Knowledge Guru
You know more about your community than real estate professionals and site selectors. Your local knowledge isn’t readily available to them and could influence their decision whether or not to build in your city. But unless you make it a point to share this information, they’ll be in the dark.
It’s up to the city to share key info such as unpublicized plans for road widening, infrastructure improvements, residential subdivisions, and other mixed-use commercial deals. Call attention to publicized plans as well, just in case site selectors overlooked that information. You’ll also know about things like local liquor laws and building codes that developers will want to know about.
Few things are more frustrating for outside investors to navigate than local politics. If there’s political instability in your city, many investors will think the location is too much hassle. Developers see small to mid-size markets as a more risky venture for retail and restaurants, so this affects those markets most.
A united community is highly attractive to potential investors. Developers would much rather work with a city that’s focused and working together than one that’s divided. They need to know they can count on your community to work with them. It’s also easier for them to work in communities that have streamlined the permitting processes and other regulatory requirements.
In-City Marketing Expert
You need to prove to potential investors that your city can make a good first impression. This often begins with the website. Many cities have old websites that are difficult to navigate and cluttered with out-of-date information. You don’t want people researching potential retail development locations to overlook your city because of a negative first impression. Instead, contact us for website consulting, design, development, hosting, and maintenance services tailored to your city’s needs.
The easier you can make it for developers and site selectors to find information about your city’s growth plans, navigate local politics, and market a new development in your community the better. But you still have to catch their eye in the first place. Let Retail Attractions help. We have the contacts within retail and third-party objectivity needed to market your community successfully. Get in touch with us today and we’ll help you grow your city.