Category Archives: Downtown Niches

TOUGH TIMES FOR THE MOVIE INDUSTRY — HOW IS YOUR DOWNTOWN CINEMA DOING?

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Some Background
As a result of DANTH’s 2008-2013 downtown trend assessment work, we became very concerned about the future of movie theaters in a lot of medium-sized downtowns,so we keep our eyes out for news about the movie industry. In my February 24, 2008 posting, “DOWNTOWN MOVIE THEATERS WILL BE INCREASINGLY IN PERIL”  I noted that according to a PEW survey:
“By a five-to-one ratio Americans view films more at home than they do in movie theaters. Move theaters account for only about 12% of the movie industry’s revenues”

And, according to that same PEW survey, this trend toward watching movies at home was growing. The implicit danger posed by this trend for downtown cinemas, that often are just scrapping by, is a relentless deterioration in attendance and revenues.  

Some Recent Observations in the NY Times
A recent article in the May 29, 2011 edition of New York Times had a title that grabbed my attention: “3-D Starts to Fizzle, and Hollywood Frets,” The reporters, Brooks Barnes and Michael Cieply, state  that: “The box-office performance in the first six months of 2011 was soft — revenue fell about 9 percent compared with last year, while attendance was down 10 percent.” That’s off of a 5.25% attendance decine reported by boxoffice.com for 2010. To give those delines some perspective, remember that a mere six percent drop in attendance back in 2000-2001 pushed most of the theater chains into bankruptcy.  The current drop in attendance and revenues might be explained by our stalled economy and/or rocketing gasoline prices, neither of which promise to soon disappear.

Many Hollywood big wigs, such as James Cameron and Jeffrey Katzenberg, have argued that 3-D movies would save the industry by bolstering audiences and revenues. But Barnes and Cieply also report that now “there is strong consumer resistance to high 3-D ticket prices” and “the novelty of putting on the funny glasses is wearing off.” While the best 3-D feature films still are doing well at the box office, 3-D films of more ho-hum quality are taking a box office beating in the USA.

Barnes and Cieply also reported that rentals in video stores during the first part of the year fell 36 percent. This fact would be consistent with the crumbling of the Blockbuster chain and a substantial growth in the streaming and downloading of films to home TV and computer screens through Internet services such as Netflix, Amazon and iTunes. The latter was a possibility DANTH’s trends assessment feared would be all too likely.

My Take-Aways
With retail gasping for breath in most downtown and Main Streets commercial areas, their entertainment niches have taken on an even greater importance than they have had in the past. Downtown movie theaters are often the cornerstones of these niches and the recent decline in attendance suggests they may be facing substantially increased financial stress.
Strengthening downtown entertainment niches in small and medium-sized communities will probably follow two strategic paths:

  • Buttressing the magnetism of the movie theaters through a package of improvements that includes: 3-D and IMAX screening capabilities; tie-ins with adjacent or in-house restaurants, bars, brew-pubs, ice cream parlors, etc.;  clean theaters, with comfortable seating and audiences displaying civil behavior
  • Developing non-formal entertainments, most importantly in well-activated public spaces and restaurants.

What’s Happening in Your Downtown?  

Please let me know what is happening in your downtown or Main Street district. If there are sufficient responses, I will report on them in special posting to this blog.

N. David Milder

The Arc of a Niche: The Bowery’s Home Lighting Niche

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The key intersection for The Bowery’s home lighting niche, which is about 50 years old.



The Bowery Mission, a remnant of a famed, if unsavory, past



Some home lighting shops on The Bowery 1 



Some home lighting shops on The Bowery 2



Some home lighting shops on The Bowery 3 



My initial thinking about retail niches was greatly influenced by my experiences shopping for antiques in Waynesville, OH and for lamps in shops along The Bowery in Lower Manhattan. It has been almost 50 years since I made my initial visits to these places. Their antiques and home lighting niches still exist, though they have changed over the years. 


Waynesville is about 600 miles away, so I have not been there in many years. But, a few years ago, I did some telephone interviews. Though the antiques niche there reportedly remains strong, it has changed because the industry as a whole has changed. Two significant changes are: 1) a lot of merchandise is sold on consignment in large antique malls, where the dealers do not have to be personally on site and 2) internet sales.
The Bowery is much closer to home, about an hour away via public transportation.  When I first visited the area, back in the 1950s, it was best known for its run down bars with cheap drinks, poor alcoholics down on their luck and a collection of flop houses. When I next returned to the area in the 1960s it was to look for lamps in a cluster of home lighting stores. By the late1980s,  this home lighting niche had grown enormously, with most shops between Houston Street and Canal St seeming to sell home lighting merchandise. On a visit in the 1990s I estimated there were between 75 and 100 ships in this niche. My wife and I felt that too many them appeared to be indistinguishable from each other in size and merchandise and that consequently the whole niche seemed less attractive.
Since then the neighborhood has changed significantly. Property values have increased and so have the commercial rents. The Bowery is showing signs of gentrification. The cheap bars and SROs are long gone. Chinatown has expanded enormously. 
The merchants have also changed. The number of home lighting shops is now back down to about 20 and they are clustered on a two block stretch going south from Delancey Street. A restaurant kitchen equipment niche has emerged.
The largest and best known home lighting shops are among those that remain. Though much reduced in numbers, the niche is still relatively strong. A 50 year run is not bad for a retail niche and it certainly is not yet over. The niche remains a regional draw for shoppers looking for home lighting.
I hypothesize that the contraction of this niche was due to a collection of factors:
  • Rents became unaffordable for most of the small, marginal shops. Given the huge increases in Manhattan’s retail rents it is doubtful that the borough will ever again see a retail niche of the size this home lighting niche reached.
  • Some shops just aged out — the owners retired and their businesses ended with their departures
  • Too many of the shops could not differentiate themselves except on price — and many could not afford to compete in this manner
  • A new niche was competing for the available retail spaces.

It is also fair to say that this niche has helped revitalize a badly decayed, disreputable area.

Movies Update

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For several years now, I have been arguing that the average downtown movie theater is in trouble as more and more people watch more and more films at home or even on their mobile devices. To counter this trend I have encouraged downtown theaters to rekindle “going to the movies” as a special occasion by adopting modern digital, 3D and IMAX projection systems and/or by

An article in today’s Wall Street Journal shows that 3D and IMAX are indeed having a positive impact on attendance:

  • “After a record-shattering year of revenues last year, when the box office soared beyond $10 billion for the first time in history, revenues are running about 10.3% ahead of the same point last year, with attendance up by more than 8%.”
  • “3-D has helped boost those figures. Last weekend, some theater owners significantly raised ticket prices—mostly on 3-D and Imax showings. In some cases, the price increases ran as high as 26%.”
  • “Consumers, so far, don’t seem to mind the higher prices, as long as they come with premium experiences.” And we are still climbing out of the Great Recession!

The Wall Street Journal: Movie Ticket Sales Mark Easter Records

AVATAR AND DOWNTOWN MOVIE THEATERS

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I have been an avid film buff since my Mom took me to see Anchors Aweigh in 1945. Though I liked James Cameron’s Terminator 2, one Alien was more than enough for me and I could not bring myself to see Titanic. Cameron, in my book, did not belong in the same league as Lean, Ford, Hawks, Lubitsch, Capra, Wilder, Spielberg, Cukor, Hitchcock, Coppola, Scorsese et al.

But, on Christmas Eve I went to see Cameron’s latest, Avatar, a 3D film, in all of its glory on an IMAC screen. I went despite my opinion of Cameron as a film-maker/director because I have been reading that the latest 3D technology would be the savior of movie theaters against the growing trend for people to watch films on their home TV screens, laptop computers and even small mobile devices such as iPods. I was particularly interested in how the 3D technology might impact on downtown movie theaters, many of which are relatively small, with fewer screens and less able to support badly needed investments. The primary question I brought to my viewing of Avatar was: Could the 3D technology produce a movie experience that was so unique that it could draw people off their couches or away from their handheld devices and back to movie theaters – especially those in downtowns?

Avatar plain blew me away! It is a watershed in movie-making and one of the most impressive films I’ve seen since Lawrence of Arabia. Watching it you keep asking yourself what kind of mind conjured this reality up and what technologies are putting it on the screen so realistically and so competently? Your immersion into a totally strange, yet coherent, detailed and comprehensive new world is staggering – so much so, that the storyline, which is too often hokey and filled with 60’s political stances, seems acceptable. I intend to see Avatar on a regular 3D screen to determine how much of this impact was due to the huge IMAC screen and the immersive experience it supports, though published film reviews also report about the strong, unique viewing experience Avatar generates on normal 3D screens.

Avatar definitely created a type of experience that I would abandon my easy chair and ignore the four full length films on my iTouch to enjoy again in other movies shown at my local cinema.

However, this experience may be due as much or more to computer-generated, special effects that are not 3D related. For example, the Na’vi, a humanoid race at the core of the film, are completely realistic, with little evidence of contrivance. The biggest grossing movies for the last 10 years (Transformers 2, The Dark Knight, Spider-Man 3, Dead Man’s Chest, Revenge of the Sith, Shrek 2, Return of the King, Spider-Man, Harry Potter / Sorcerer’s Stone, The Grinch) all were either heavy on computer generated special effects or computer animated. These movies are costly and studios are making about 15% fewer films than last year, probably as a result.

The studios’ emphasis on big budget, high tech films that are sequels or remakes increased attendance at movie theaters in 2009 by close to 8%, according to data published by boxofficemojo.com. With recession restrained ticket prices remaining steady, box office receipts increased by about the same magnitude as attendance. That would place 2009 as the fifth highest in attendance over the past 10 years, still 8% less than the peak in 2002.

It appears that evidence is starting to accumulate indicating that downtown theaters that can show films using 3D and other digital special effects technologies will be able to compete with home theaters and personal film viewers such as the iTouch and iPhone.

But, I doubt that 3D or other digital special effects can be used to enhance the viewing experience for movies such as Casablanca, The Maltese Falcon, On The Waterfront, A Streetcar Named Desire, Annie Hall, The Godfather or the vast majority of lower budget films such as Juno, Education and It’s Complicated, that have recently been turned out by independent production companies. The “indy” films have been a source of strength to some of the most successful movie theaters in large urban neighborhoods and medium-sized downtowns. The audiences at these often packed theaters are overwhelmingly composed of the almost 25 million Americans aged 55 or more who go to the movies every year.

But, the competition is also getting stronger. High tech innovations are also increasing the lure of home entertainment equipment. Tim Bajarin, of Creative Strategies, who I think is the best in the business on computer related markets, sees 3D television taking hold soon, while DVDs rapidly are being displaced by on-demand streaming of movies. (See: http://www.pcmag.com/article2/0,2817,2357490,00.asp).

Consequently, I think that downtown cinemas need to not only be capable of digital projection and showing 3D films, but they also need to:

  • Make watching a movie with others in an audience a very pleasurable and therefore desirable experience. This not only means clean and comfortable seats, clean floors, good sound equipment, etc., but the enforcement of rules that are absolutely intolerant of patrons acting without civility to those around them
  • Integrate the movie-going with unique eating and drinking opportunities such as a quality restaurant, a coffeehouse, a first-rate ice cream parlor or a brew pub
  • Court and pamper the 55 year old + audience. It has accelerating growth.

N. David Milder

The New Normal for Downtown Retailing: I. Introduction

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Across the board key Federal officials, renowned economists, and powerful business leaders agree that our Great Recession finally has bottomed out. The latest GDP data support this view. For downtown leaders this is a very appropriate time to ask: “What’s next?” Are we returning to the same challenges and opportunities downtowns faced prior to the recession? Or to conditions similar to those of the earlier parts of the decade? Or are we facing a “new normal”, with its own array of fresh challenges and opportunities that we must learn about and deal with?

The evidence points toward a new normal. Responding effectively to this situation will require some insightful, hard-nosed analysis and then a lot of innovative and practical problem-solving. This is absolutely not the time for puffed-up marketing, fluffy analysis or laissez les bon temps roulez attitudes, but there are still viable paths for growth and redevelopment.

Though much remains to play out (e.g., gasoline costs and consumption), in coming email blasts and postings to my Downtown Curmudgeon blog and DANTH, Inc’s website, I will start to detail some of the characteristics of this new normal. Among the topics I will discuss are:

  • The biggest single new factor that downtown merchants have to face is the rise of the “deliberate consumer.” Americans are poorer and feel less affluent. Consumer credit is harder to get and to keep. Also, the housing piggy bank is kaput. Shoppers are more value conscious, more calculating and less impulsive. They are still buying — but differently.
  • Capturing consumer expenditures now requires an even higher level merchant skill set than before the Great Recession
  • Increasingly important to this skill set is a “social marketing” component that has face-a-face and online dimensions
  • Downtown merchants will struggle to define what “value” means to the consumer – it does not always have to be low price
  • Many retail chains that liked downtown locations have either folded, been severely weakened or stopped putting new stores in downtowns. As a result, more than ever, the strength of a downtown’s retailing will depend on high quality independent merchants.
  • Baby Boomers are now retiring in increasing numbers, but are poorer, more frugal and finding it harder to sell their homes. Those that do “gray” our downtown residential projects will likely provide less lift for nearby retailers than previous “empty nesters”
  • Even after we climb out of the recession, doing downtown redevelopment projects as we did over the past 10 to 15 years will be far more thorny because of legal constraints, political challenges and difficulty in finding tenants and financing
  • A significant number of downtowns will have their growth constrained not only by malls or big box retailers, but also by nearby downtowns that already have been successfully revitalized
  • Young single knowledge workers have ignored and will continue to ignore living in most small and medium-sized downtowns. Some of these downtowns, however, are attracting artists and crafts people because of their comparative low costs, good quality of life and decent access to major arts markets
  • A surprising new factor: the luxury retail market will be weakened for some time to come, with diminished middle class “trading up” and “treasure hunting” shopping, and guilt constrained luxury buying. Also, significantly fewer at the top of the income ladder have a positive assessment of their personal finances – it is at the lowest level in 20 years. Many of the suburban “lifestyle downtowns” are vulnerable to the impact of this trend
  • Affordable luxuries will come back first. Larger mass luxury purchases requiring new credit lines will lag
  • Home and hearth niches will recover slowly following the housing market, with big ticket items lagging the most. Nevertheless, HDTVs, other “cocooning” related merchandise and children’s furniture will do relatively well.
  • It is far more difficult for downtown merchants to finance new locations, inventory, facade improvements, etc. Retailing will be stronger in districts where downtown organizations can help merchants cope with these problems
  • Low-price powerful warehouse retailers continued, even during the Great Recession, to increase sales and their market share. Downtown merchants have typically been poor at playing the low-price game. Big box and supermarket chains are more serious about rolling out smaller stores with a scale more appropriate for downtowns. Although contrary to their commitment to small independent local operators, should downtown leaders consider recruiting some small format, national, low price retailers?
  • Through the recession sales continued to increase for food away from home establishments. Downtown eateries that provide comfort food, good value, friendly service and a venue for friends and family to meet will continue to do well. Their strength also shows the continued importance of convenience and quality family time for dual income households and those with children
  • Non-comparison, convenience retail has been a steady rock for the vast majority of downtowns – e.g., food markets, drug stores, etc. – and will continue to be in the foreseeable future
  • There has been a significant decline in Americans’ participation in the arts, especially attendance at legitimate theaters, concert halls, museums, art galleries, etc. The recession deepened, but did not induce the decline. The audiences for these arts venues have become significantly older. Middle and lower income and younger folks are increasingly “cocooning” and consuming arts performances at home electronically.
  • Shops and restaurants that featured locally grown or produced products tended to fair much better than others during the recession and they will have increasing strength as the economy improves and the sustainability movement gains traction
  • Though online retail sales tanked more on a percentage basis during the recession than regular retail sales, “backdoor retailing,” both electronic and brick, will increasingly define successful downtown merchants
  • Ethnic downtowns did comparatively well during the recession. They will continue to fare relatively well because of population growth, upward mobility, unique sourcing of merchandise, language and cultural affinity. Also, they provide access to dense populations for many retail chains that see ethnic markets as untapped growth opportunities
  • More and more communities want downtown commuter rail stations. These stations will be cornerstones for strong downtowns – and their retailers
  • Another and perhaps most important cornerstone will be establishing the downtown as the community’s central social district with well activated and attractive public spaces and popular eateries having pivotal roles


Your comments are welcome.

N. David Milder

Apparently, The Recession Is Not Saving Movie Theater Attendance

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In past blog postings I have argued that movie theater attendance is being significantly eroded by the growing ease of watching movies at home, where — as a Pew survey showed – Americans now watch most of their movies.

But in the first three months of 2009 attendance jumped 13% over the previous year and observers in the news media were claiming that depressions and recessions induce higher movie theater attendance as folks are looking for affordable entertainment. In an April 18, 2009 posting, I cautioned against jumping on this analytical bandwagon, noting that movie attendance in 2008, definitely a recession year, was the lowest since 1997.

More recent attendance data, as reported in an article in the Wall Street Journal, (see:Lauren Schuker, “Summer Box-Office Sales Cool Down – WSJ.com,” http://online.wsj.com/article/SB124924166209699671.html#mod=testMod.) indicates a reversal of this trend: “Attendance for the summer season, beginning on May 1, is down by 4.36% compared to the same time last summer, with revenue edging down by 0.77%.” This means that movie attendance has dropped to a really low level, since the 2008 stats were the lowest in over a decade.

N. David Milder

Is Our Great Recession Saving Downtown Movie Theaters?

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About a year ago, I wrote that downtown movie theaters were increasingly in jeopardy because people were more and more watching movies at home. Lately, I have been asked if I still believed downtown cinemas were in trouble, since recent media reports indicated that:

  • Nationwide, movie attendance was up 21% in the first seven weeks of 2009
  • The National Association of Theatre Owners claims box office numbers climbed in five of the seven economic downturns that occurred over the past 40 years.
  • It is well-known that movie attendance rose sharply at the height of the Great Depression
  • The stocks of the movie theater chains lately have risen substantially.
First, it should be noted that a seven week attendance pattern ought to be treated with caution, especially when it is contrary to a longer term trend.

Total U.S. & Canada Admissions
Year Admissions
2008 1.363
2007 1.400
2006 1.395
2005 1.376
2004 1.484
2003 1.521
2002 1.599
2001 1.438
2000 1.383
1999 1.440
1998 1.438
1997 1.354

Source: National Association of Theatre Owners

Total admissions in the USA and Canada for the full year of 2008 – when we where already in recession – was the lowest since 1997.

But, the primary reason that I still think downtown cinemas are in trouble is the behavior of highly regarded Hollywood moguls such as James Cameron and Jeffrey Katzenberg and the movie theatre chains. Cameron and Katzenberg both believe that the future of the movie theater business rests on 3-D movies because “going to the movies” has to once again become a special occasion, quite different from watching a flick at home. The movie chains have been investing a lot of money in more IMAC screens and now they are trying to raise between $700 million to $1 billion to convert enough screens—at $100,000 a shot –- to 3-D.

Some smaller, but savvy movie theater operators are doing such things as running “dinner cinemas,” where you get both a good film and a quality meal. Others are opening restaurants or brewpubs next door.

The downtown movie theaters that are really endangered – regardless of how they are drawing now – are those that cannot turn watching a movie into a special occasion. That is the key for the future. Dirty sticky floors, uncomfortable seating, inadequate restrooms, uncivil patrons, run of the mill films, etc., are not characteristics of a special occasion that will draw film viewers from their homes, but far too many downtown cinemas have them. Improving these theaters will not be cheap. Nor will it be cheap to provide them with 3-D equipment.

I do not know whether 3-D is the silver bullet. Here in Kew Gardens, we have a six screen cinemaplex that has absolutely no off-street parking, but it has been packed every weekend for many years. It is located in a densely populated neighborhood and features current “indy” films to an audience that rarely has a teenager in it – I’d say most patrons are over 40. Larry Houstoun reports similarly successful small cinemas near him in downtown Philadelphia. Indy flicks for seniors or IMAC or 3-D or whatever that makes going to the movies a special occasion is what counts!

If downtown organizations want their independent cinemas to survive they will have to help the operators again provide a venue where going to the movies is a special occasion.

Recession Evils: Rumors and Facile Solutions

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In a recent newsletter of Red Bank’s RiverCenter, Nancy Adams properly admonished the rumor-mongers who, faster than the recession, can bring down a good business operation. I congratulate Nancy for her spunk. And in contrast to Lou Grant, a lot of us like spunk! I am so glad she told those idiots to shut up!

Let me take up a cudgel against an equal danger – the town leader, manager or guru who thinks they are on to an easy answer for coping with our Great Recession. For instance, since November I have been hearing on and off about how good the student market is for retailers. This flies directly against what I have leaned about student shoppers since I started to study them for a project in Elizabeth, NJ back in the late 1990s. Before the dot,com bubble burst, the teen/tween market was an important growth engine for many downtowns – especially in urban wear. But with the dot.com bust, these youths lost their biggest income – what mom and dad gave them. And a lot of shops that targeted this market were badly hurt. Also, this market is notoriously fickle – a shop or chain that is red hot today can be in the crapper tomorrow. Finally, the potential size of this market is limited – the amount that teens and tweens can spend simply pales in comparison to how much retail spending their mothers control!

Then, if you look closely at what is happening today, you have to wonder some more. You can bet your bottom dollar that as this recession deepens, these kids are going to get less and less from their parents. And do you really think these kids are now getting part-time jobs to cover their retail buying habits? Moreover, if you look at some recent data, the story is a mixed one; some retail chains that target the teen/tween market are doing really well, but others, many that were hugely popular with these young shoppers, are not.

Below are some same store sales comparisons for retail chains that like teen/tween customers. The data are from Barbara Farfan at About.com:

Same Store Sales –Dec 2008

+13.5% The Buckle, Inc.
+ 12% Aeropostale
+ 10% GameStop
+ 4.3% Hot Topic Inc.

- 1% Urban Outfitters
- 10% Pacific Sunwear
- 12.3% Zumiez
- 12.5% Wet Seal
- 17% American Eagle Outfitters
- 24% Abercrombie & Fitch

Same Store Sales –Jan 2009

+ 14.7% The Buckle Inc.
+ 11.0% Aeropostale
+ 6.0% Hot Topic
+ 2.0% American Apparel

- 11.0% Pacific Sunwear of California
- 14.8% Zumiez
- 20.0% Abercrombie & Fitch
- 22.0% American Eagle Outfitters

Same Store Sales –Feb 2009

+ 21.0% Buckle, Inc.
+ 11.0% Aeropostale
+ 10.8% Hot Topic
+ 4.8% Torrid (Hot Topic)
+ 3.0% Urban Outfitters

- 6.6% Wet Seal
- 9.0% American Apparel
- 13.0% Zumiez
- 23.9% Arden B (Wet Seal)
- 30.0% Abercrombie & Fitch

The Buckle, Hot Topic and Aeropostale are indeed doing well and it would be great to discern a winning formula they share. Hot Topic is hot because it sells the clothing that the vampires or zombies wear in some book series that tween and teen girls now adore. Gamestop is hot because it resells computer games to the avid gamesters. But, Ambercrombie’s, Amercian Eagle, Zumiez, Wet Seal and Pacific Sunwear are not flourishing. And Amercian Apparel and Urban Outfitters – some retail analysts thought they were immune to this recession – are up and down. This market segment still does not sound to me like a rock downtowns now can build their retail upon.

The Apparel Niche and the Home & Hearth Niche: The Growing Importance of Independent Operators

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Introduction

The apparel niche and the home & hearth niche may seem unrelated, but they share several commonalities:

  • They are both particularly important to downtowns
  • They are both facing challenges, and
  • They will both be relying on the success of independent operators for their future well-being and growth.

Apparel

First, let’s consider apparel. This niche is important to downtowns because women are our most prominent and powerful shoppers (making 80% of the purchases for the home and family). And clothing, shoes and accessories purchases for themselves and their children are an important part of women’s purchases. As we’ve reported in previous blasts, time-pressured mothers are willing to accept higher prices from downtown vendors if they can shop quickly and easily close to home. In addition, a successful apparel niche adds diversity to the downtown mix and stimulates interest in strolling and window shopping.

But apparel has been an at-risk niche for the past two decades. While the industry has grown, it has grown at a pace much slower than other retail sectors. Additionally, major retailers like Ann Taylor, the Gap and Chico’s – the kind of trophy apparel shop that many downtowns have targeted as their dream tenants – are not opening new stores as they suffer reduced sales in a difficult economic climate.

What to do? We all know of downtowns where there is more than sufficient unmet demand for apparel within a ten-minute drive shed to support a new store with $300,000 to $400,000 in annual sales. Such revenue may be too low for a national chain, but very adequate for an independent operator.

These new merchants will need a great deal of support from the downtown organization in finding affordable space, negotiating leases and perhaps even “sourcing” their merchandise. To succeed it will help that these merchants:

  • Be a local resident – for instance, a local mother – with a network of friends and colleagues in the community
  • Represent and market to a specific and strongly populated ethnic group in the community
  • Be opening a very high-end shop that provides an exceptional level of pampering and customer service
  • Be able to solve the problem of sourcing attractive merchandise

In many instances, an independent operation apparel niche is not going to be recognized or realized without the proactive intervention of a downtown organization. Your organization can help foster such a niche by:

  • Having market research performed to identify opportunities
  • Indentifying and cultivating possible entrepreneurs
  • Helping the entrepreneurs form a viable business plan, find appropriate affordable space, find loans or investors, etc.

Home & Hearth

For decades, revitalization advocates have searched for a type of retailing that can thrive in downtown locations despite the presence of nearby malls and big box discount retailers. DANTH has found that home and hearth niches are very often the answer.

Home and hearth niches are groups of shops that feature goods and services that enable shoppers to make their homes more comfortable, more entertaining and more beautiful. They include retail establishments selling furniture, carpets, antiques, table top goods, window treatments, hardware, electronics, art works, picture frames, tiles, appliances, kitchen and bathroom equipment, plumbing supplies, telephones, and gardening equipment. This niche can also include architects, plumbers, carpenters, contractors and service firms that deal with lawns and septic tanks.

Usually, the firms in this niche are overwhelmingly independent operators or small regional chains. They usually don’t need vanilla box spaces.

The home and hearth niche is very dependent on the housing market and the niche’s current economic woes have traced the decline in home values. But DANTH believes that demand for this niche’s products and services soon will begin to grow as consumers start to put more money and attention into fixing up their current homes instead of buying new ones. Home Depot and Lowe’s have already pivoted their marketing in this direction. Economic conditions have also sent Americans into more “cocooning” in their homes which is leading to strong sales of flat screen TVs and other home theater accoutrements.

Plus, the long-term trend for this niche is very good, showing that businesses in the home and hearth sector have grown at a pace greater than GAFO in eight of the last ten years for which data are available. DANTH expects that as the current housing crisis is resolved and household formation again rises, sales in home and hearth stores will follow suit. Now, as the market is bottoming out, is a good time for downtown organizations to strengthen or build their home and hearth niches.

Another positive for this sector is that downtown organizations will need to do less work in attracting and building this niche than with an apparel niche – since less home and hearth business owners are “newbie’s” to the industry. The downtown organization can take on a more traditional business recruitment effort without having to provide the large amount of business development assistance that independent apparel operators will require.

This posting was condensed from my longer report by Mary Mann. To read the full report on Apparel and Home & Hearth Niches, visit www.danth.com.

RETHINKING DOWNTOWN ENTERTAINMENT NICHES: Non-Formal Entertainment and Work-as-Entertainment

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Thesis: In a contracting economy populated by time-pressured consumers, downtowns need to rethink their entertainment niches to include and foster informal entertainments that are low-cost and convenient.

Most economic development experts have come to agree that entertainment niches are good fits with the assets of many downtowns and such niches have indeed flourished across the nation.

While “formal” entertainment facilities such as concert halls, legitimate theaters, rehabilitated movie theaters, sports stadiums and arenas can generate subsidiary economic benefits and make towns more attractive to residents, visitors and workers, they are often expensive to build and many small and medium downtowns do not have the means or the capacity to develop such large-scale formal entertainments.

In addition, data from the Bureau of Labor Statistics indicate that most American households began reducing their expenditures for formal entertainments even before the current economic downturn. With the vise closing on the discretionary income of most American households, it is reasonable to assume that entertainment expenditures may be among the first to be reduced. When you factor in the time pressures experienced by the modern household (and detailed in previous reports), formal entertainments seem likely to get further squeezed. In addition, as DANTH noted in our assessment of the future of downtown movie theaters, watching films at home and other home entertainments are eroding the downtown movie theater audience.

The good news? Downtowns of all sizes can develop vibrant niches based on informal entertainments to capture the potential lost audience for these formal entertainments. In a contracting economy populated by time-pressured consumers (research indicates that time –pressed families are increasingly looking for entertainment opportunities that last about 45 minutes rather than the two to four hours usually demanded by formal entertainments), downtowns can compete for time and dollars by providing low- or no-cost entertainments that are close by and do not require long car trips and expensive amounts of gasoline. This entails “rebranding” entertainment as something other than – or in addition to – theaters, arenas and the like. In this scenario, entertainment is “anything that amuses observers.” Reinforcing such informal entertainments can help to bolster the economic health of downtown – its housing, retail, office, and, yes, its formal entertainments.

Public Spaces

Great public spaces provide opportunities for people to engage in activities that they enjoy and that also interest and amuse nearby people-watchers. Think of the ice skaters drawing the ever-present crowds above the rink in Rockefeller Center. Similarly, in Manhattan’s Bryant Park, lounging patrons watch chess players – as well as each other. In Greenport, NY, a much smaller community, a carousel and waterfront location create a wonderful public space where people can watch and be watched by other people. Other downtowns have fostered entertainment with facilities such as:

  • model boat ponds
  • children’s pony rides
  • tables where people can play chess, checkers, or dominoes
  • Wi-Fi hotspot to access and cruise the Internet on laptops
  • places to catch the sun — a favorite pastime for office workers and young tourists in the spring and summer
  • places to buy food and eat lunch alfresco
  • outdoor cafes for sipping coffee and eating snacks
  • slot car racing for kids
  • interactive art installations that capture and play with people’s images, make music or move


Visitors will “perform” if the opportunities are there. Informal entertainments are usually public and usually priced right – either free or, when there are fees (e.g., to ride a carousel), affordable. They are also “sticky” activities. Retailers can feed off of the traffic the informal entertainments bring in, as demonstrated by the busy pedestrian traffic on the street next to Mitchell Park in Greenport, NY. Informal entertainments are also liable to be open when the public would want to use them as opposed to theaters, concert halls, etc. Most often they are child-friendly – and therefore mommy-friendly, too.

Work-as-Entertainment

Often overlooked is the delight and amusement people can derive from simply watching other people do their jobs. In particular, people have shown a great interest in watching craftsman and artists at work. Historical villages such as Williamsburg (VA), Sturbridge (MA) and Old Town (San Diego, CA) have long had many “demonstrations” by blacksmiths, glass blowers, bakers, weavers, etc. The Miami Ballet rehearses in a ground floor studio with a storefront window, which always attracts crowds of passersby and helps build the company’s audience. At the Torpedo Factory in Alexandria, VA – one of the most successful and innovative downtown retail projects in the nation – each artist and craft studio has windows and often open doors, so the public can watch the artists and craftsman as they create. At the Simon Pearce retail store at The Mill in Quechee, VT, visitors to this converted mill/retail location can watch glass being blown, ceramics being thrown and decorated and fabrics being woven, and then enjoy a meal with views of a waterfall.

This posting was condensed from my longer report by Mary Mann. To read the full report and find the complete sources for “Rethinking Downtown Entertainment Niches,” visit www.danth.com.

In addition, DANTH has created photo albums relevant to informal entertainments and work-as-entertainment that can be downloaded now, free of charge, from the Internet:

For the album on informal entertainments, visit:
http://picasaweb.google.com/dmilder/InformalEntertainmentActivities

For work as entertainment, visit:
http://picasaweb.google.com/dmilder/WorkAsDowntownEntertainment

For photos of the Torpedo Factory, visit:
http://picasaweb.google.com/dmilder/TorpedoFactory121607351PM