The Future of Downtown Retail<br />Michael Stumpf, AICP, CEcD<br />Principal, Place Dynamics<br />
The bad and the good<br />The golden age of retail has come to an end<br />Demographics do not support the same levels of ...
Consider 150 years of retail evolution<br />Catalog Sales<br />Lifestyle Centers<br />Self-Service<br />Power<br />Center<...
Are we on the verge of a fundamental shift?<br />Perhaps the recession is a transition to something new…<br />Demographic ...
How is the shopper changing?<br />Shoppers are making permanent lifestyle and consumption changes…<br />A shift from “aspi...
People are interested in “buying local”<br />Why are people buying local products?<br />Desire for something unique<br />P...
The product selection dynamic is changing<br />Discounters, big box specialty stores, and grocery stores are scaling back ...
We are bored with the same old stores<br />A genuine downtown experience…<br />
Downtown vs. the mall<br />
Downtown can put the excitement back<br />Downtown can retain unique character<br />Authenticity - downtown is “the real t...
There is a need for neighborhood retail<br />Urban residential is a growing trend<br />Demographic preferences<br />Emergi...
Where will the growth be in retail formats?<br /><ul><li>Pet products and services
Home and garden
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Ida Presentation The Future Of Downtown Retail

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Presentation to the International Downtown Association on "The Future of Downtown Retail"

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Ida Presentation The Future Of Downtown Retail

  1. 1. The Future of Downtown Retail<br />Michael Stumpf, AICP, CEcD<br />Principal, Place Dynamics<br />
  2. 2. The bad and the good<br />The golden age of retail has come to an end<br />Demographics do not support the same levels of retail growth<br />Consumers no longer have access to easy credit and asset-funded spending<br />Retail formats and practices are changing<br />Consumer desires and interests are changing<br />Downtown is in a better position to capture future development<br />
  3. 3. Consider 150 years of retail evolution<br />Catalog Sales<br />Lifestyle Centers<br />Self-Service<br />Power<br />Center<br />Mall<br />Downtown and Neighborhoods<br />?<br />1860<br />1870<br />1880<br />1890<br />1900<br />1910<br />1920<br />1930<br />1940<br />1950<br />1960<br />1970<br />1980<br />1990<br />2000<br />Independent Business<br />Chain Stores<br />Mega<br />Chains<br />?<br />Walmart, Kmart, and<br />Target Open First Stores<br />First Chain Stores<br />
  4. 4. Are we on the verge of a fundamental shift?<br />Perhaps the recession is a transition to something new…<br />Demographic trends<br />Baby boomers retiring, spending less<br />Generations X and Y rising<br />Growing ethnic population<br />Urban growth and sustainability<br />Sprawl and affordability, environmental limits on growth<br />Retail consolidation<br />Shoppers are bored and dissatisfied <br />Watch for the counter-trend<br />The Internet<br />Increasing threats and opportunities for small retailers<br />
  5. 5. How is the shopper changing?<br />Shoppers are making permanent lifestyle and consumption changes…<br />A shift from “aspirational” shopping<br />Luxury, quantity, and conspicuous consumption are out<br />Value, quality, and simplicity are in – cash only<br />Shoppers have a growing interest in community<br />Post-recession spending will return to only about 85 percent of pre-recession levels<br />Shoppers will indulge on fewer but more meaningful items<br />These findings are consistent across all income levels and they are global<br />
  6. 6. People are interested in “buying local”<br />Why are people buying local products?<br />Desire for something unique<br />Perceived higher quality / freshness<br />Community-supportive purchasing<br />Centralized purchasing makes it difficult for chains to source local<br />Attempt to redefine the meaning of “local”<br />Promoting shopping at the “local” mall<br />Do “shop local” campaigns really work?<br />
  7. 7. The product selection dynamic is changing<br />Discounters, big box specialty stores, and grocery stores are scaling back on size and SKUs – reversing a trend<br />Top brands gain shelf space at the cost of less popular brands<br />Private label brands are surging, taking up more space in smaller stores<br />Loss of major outlets will make smaller retailers more important to the suppliers who are “left out”<br />Independents and small chains have a greater chance to differentiate themselves based on selection<br />
  8. 8. We are bored with the same old stores<br />A genuine downtown experience…<br />
  9. 9. Downtown vs. the mall<br />
  10. 10. Downtown can put the excitement back<br />Downtown can retain unique character<br />Authenticity - downtown is “the real thing”<br />A history and a story to tell<br />Architectural and design variety<br />Downtown has shops and restaurants that people will not find elsewhere<br />Downtown houses a diversity of uses and people<br />
  11. 11. There is a need for neighborhood retail<br />Urban residential is a growing trend<br />Demographic preferences<br />Emerging economics<br />Downtown populations tend to be underserved<br />Smaller, non-competitive stores closed<br />Large stores locate where traffic counts are high<br />Land assembly costs work against downtown<br />DOWNTOWN<br />
  12. 12. Where will the growth be in retail formats?<br /><ul><li>Pet products and services
  13. 13. Home and garden
  14. 14. Health / alternative health products
  15. 15. Products for the reluctantly aging
  16. 16. Goods from / targeted to ethnic groups
  17. 17. Green/sustainable/organic/local products
  18. 18. Experiential retail environments
  19. 19. Ready to go / anytime</li></li></ul><li>In a nutshell…<br />High quality, low price, unique or very special<br />Downtown is tied to independent retail<br />Downtown serves a neighborhood area that is gaining residential share<br />Mall malaise and chain saturation are causing people to look elsewhere for variety<br />Reduced chain SKU counts will create an opportunity for small retailers<br />Shopper interest in community and local buying favors small retailers<br />
  20. 20. We are bored with the same old stores<br />Shopping is a favorite activity<br />Consolidation has drastically reduced regional brands and is gaining momentum<br />Malls are no longer in fashion<br />Lifestyle malls are losing their luster<br />Some possible threats<br />Will the independents be lured to the malls?<br />Will the chains come downtown?<br />Are we making the same mistakes as the developers?<br />

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