Published in the Downtown Idea Exchange
Presented on this
website with permission of Alexander Communications
Column Index
1. Downtown retailers shouldn’t settle for good enough
2. Time-squeezed Americans need convenient downtowns
3. Creating a people-watching niche
4. The politics of downtown redevelopment projects
5. Making membership buy-ins easy
6. Retail raptors and raptor niches
7. Nail, hair and skin salons: bane or boon?
Downtown retailers shouldn’t settle for
good enough
By
DANTH, Inc.
Published in the Downtown Idea Exchange, July 2003
I’ve been in the downtown revitalization field for more than 25 years, and the people who consistently give me agita are, to use a term coined by Herbert A. Simon in his Models of Man, the “satisficers,” meaning the merchants who want to earn personal incomes or store revenues that are just “good enough.” The reason for my heartburn is that downtown revitalization means change, and satisficers are anti-change agents who dread innovation and shun any risk!
Unfortunately, too many of the downtown independent merchants I know are “satisficers.” Satisficers can be contrasted with maximisers, who seek the biggest, or with optimizers, who seek the best. Satisficers, behind all their typical merchant complaints, are doing okay financially and won’t put in the time and effort required to make more money. In my experience, satisficers are the root of a whole syndrome of downtown problems, such as poor marketing, weak merchandising, marginal customer service, and downtown manager burnouts.
No desire to grow
The satisficer’s perspective is exemplified by the owner of
an apparel store in an urban shopping district in
Satisficers like bankers’ hours
Trying to expand downtown operating hours into the early
evening brings out the satisficers in droves. Based on my firm’s numerous
surveys of downtown trade area residents and field observations of store
operating hours, I estimate that a shop open from 10 a.m. to 6 p.m. on weekdays
and Saturdays is closed when 40 percent to 50 percent of all comparison
shopping trips occur. Even when informed of this, the satisficers insist on
closing by
I’ve found that trying to get satisficers to improve their marketing, merchandising, and customer service is also usually doomed in terms of numbers. At most, 5 percent to 7 percent of the satisficers can be “educated.” Although these numbers are small, you might convince one or two key merchants, so the educational effort can still be worthwhile. Also, because they usually are paying — and complaining — members of the downtown organization, you have an obligation to try. Politically it’s a smart thing to do.
Attracting the strivers
The best strategies for dealing with the satisficers problem are redevelopment and recruiting strivers. A number of my clients have pursued redevelopment projects in part to get rid of existing satisficer merchants and to bring in retail chains or independents who are strivers instead.
Strivers bring a competitive edge
Strivers are independent merchants who are intent on increasing or maximizing their sales and incomes, building a very successful store, or creating a chain. Many immigrant entrepreneurs and merchants committed to customer service, advertising, and good merchandising are strivers. Recruiting strivers requires a lot of time and effort to research good merchants in other locations and interview them and those who have worked with them.
I’ve found that this kind of recruitment is harder than recruiting retail chains, and ultimately more important, because it’s the quality independents who give a downtown its distinctiveness and competitive edge.
If you go to conferences on improving downtown retailing, the focus is always on attracting the chains — little is said about the strivers. It’s about time that this changed.
Time-squeezed Americans need convenient
downtowns
By N. David Milder
DANTH, Inc.
Published in the Downtown Idea Exchange, July 2003
I am writing this article in
Downtown leaders can learn much about the importance of
customer time management from the
Time pressures are good for downtown
Overall, the growing time pressures faced by the American consumer have been a positive force for downtown revitalization. However, unless downtown leaders take fitting actions, that situation can quickly erode. Appropriately serving the consumer’s time needs is an essential component of both customer satisfaction and creating an appealing downtown image. There are many functional areas where this can play out, but here are some of my observations about how time pressures are impacting downtown parking problems.
An intercept survey done in the Cedar Lane Shopping District
in
Providing parking for the time-squeezed
In most downtowns, the focus of parking studies is on the creation of more capacity, usually in the form of surface parking lots or decks. These parking facilities are best suited for shoppers who need to spend at least an hour on their trips — just getting in and of the facility and walking to and from their downtown destinations can take up a big chunk of time. Rarely have I seen comparable attention paid to the parking needs of shoppers who need just 15–30 minutes to accomplish their tasks. Downtown parking must be designed to support the consumer, whether he or she is in a browsing/shopping mode or in the “quick in, quick out” mode.
One way to respond to the “quickie” shopper is to have some well-designated, on-street spaces metered for no more than 30 minutes. Effective enforcement will be necessary to make these spaces work as intended. A side benefit of these actions is the additional friction they create for downtown employees who feed the meters.
If quickie shoppers cannot find a space on the street within
steps of their retail destinations, then it is important that the downtown
prevent a long search for a parking spot. Easily identified and legible signage
indicating where the closest lots are located would be helpful — even more
helpful would be information about their capacity and, better yet, how many
vacant spaces they have. About a decade ago a transportation planner told me
about an electronic signage system for parking lots that could communicate
information about available spaces. Such signage systems are common in European
cities, but I have never seen or heard of one in the
Downtowns ignore consumers’ time pressures at their own peril.
- - - - - - - - -
Since the publication of this article the author has seen an
electronic signage system in the garages at The Grove in
Parking Availability
Sign at The Grove
Creating a people-watching niche
By N. David Milder
Published in the Downtown Idea Exchange, November 2003
Presented on this website with permission of Alexander Communications
About a year ago, I was sipping an espresso outside of the
Café de Flore on the Boulevard St. Germain in
Cafes as outdoor theater
It occurred to me that Café de Flore was not just a dispensary of food and drink but also an important entertainment venue. Right there, a lot of things were grabbing my attention and amusing or moving me. Most of all, it was the people I could observe — those sitting at nearby tables, the pedestrians strolling by, the waiters, and even some car drivers displaying rather unique maneuvers.
Gardens and parks
While the
In my opinion, this is what great public spaces do: they
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
Restaurants
Dining in a Parisian restaurant, to me, is like being in a show where I have a role. Because they are Parisian, they have a kind of exotic allure. And the presentation of the food, from the sommelier uncorking a wine bottle to a fish being filleted or crepes suzette being flambéed at your table, is filled with skillful, amusing, and theatrical performances.
Bringing it home
You don’t need a big cultural complex like
Downtowns in the
Downtowns that can successfully attract people whom the general population might consider strange, but nonthreatening, will also be entertaining. Such groups might include ethnic groups new to the community — almost always teenagers with their avant-garde clothing styles and body piercings.
Theaters, movie houses, and concert halls can be great for any downtown, but without the kind of people entertaining each other with activities like those described above, a downtown’s entertainment niche is liable to be dormant most of the time, when facility doors are closed. People-to-people amusements can occur all day long.
The politics of downtown redevelopment projects
©
by
An edited version of this article appeared in the
issue of the Downtown Idea Exchange. Presented on this website with permission of Alexander Communications.
An expanded version of this article will appear in “Making Business Districts Work: Leadership
and Management of Downtown,
Increasingly across the nation, the name of the game in downtown revitalization is shifting from district management to redevelopment. While downtown leaders usually welcome their growing involvement in redevelopment, all too many initially fail to recognize -- often, until it’s too late -- just how “political” such projects can be. Consequently they often are very reactive and ineffective when the inevitable political brouhahas emerge.
The fact is that redevelopment projects, by their very nature, usually motivate some residents and businesspeople to oppose them and often there are community groups ready to organize, mobilize and finance this opposition. So, if your downtown is serious about redevelopment, your leadership should be ready and able to politically navigate such situations.
Some Do’s and Don’ts
Here are some suggestions for handling a number of the political problems associated with downtown redevelopment projects:
The need for redevelopment in many downtowns, be they large or small, is undeniable. Moreover, for the first time in decades, there are scads of developers who are looking for downtown projects. Equally undeniable, is the need to have the community support these projects. While redevelopment projects, by their very nature, may engender conflicts, the key factor is not that such conflicts might occur, but how they are handled.
MAKING MEMBERSHIP BUY-INS EASY
By
An edited version of this article appeared in the
issue of the Downtown Idea Exchange.
Over the past six months I have been active in helping to
plan the agenda for Downtown New Jersey’s annual conference and in “producing”
and moderating a workshop on how to reinvigorate
These concerns resonated strongly with me. For the past 16
months I have helped manage the Bayonne Town Center (BTC), a SID management
corporation in
Do No Harm!. One of the primary rules in medicine is, first, to do no harm. This is also a good downtown management operating principle.
According to city ordinance,
the plans for all façade and sign changes in the
Use Incentives to Implement
Your Strategy. Across the nation,
incentives are frequently offered by economic development organizations to
implement their growth strategies. They succeed by enticing developers,
retailers and major corporations to act in accordance with the organization’s
plans. Car makers and consumer goods companies (e.g., P&G) offer incentives
to increase sales. Incentives, can also help downtown organizations strengthen
their membership buy-ins, especially in such program areas as façade
improvements and marketing.
For many years, the BTC had tried to convince one particular business owner --who had a very large building façade at a very strategic location -- to improve his façade. In spite of the substantial financial incentives offered by the city, about $35,000, we could not get this operator to act. Recent discussions with the operator revealed that he was concerned about the uncertainties of the total costs, which might exceed $100,000, and how to finance the portion of the costs not covered by the city’s grant. The BTC offered to help pay, on a matching basis, for an architect who would do elevations and cost estimates for improving this façade (but no construction plans or documents) and linked him to low-cost loan funds available through the Bayonne Economic Development Corporation.
Over the past year, interviews with shop and property owners revealed that one of the strongest reasons why more of them had not undertaken façade improvements, despite the generous direct assistance provided by Bayonne’s Community Development Department, was that they had not reached the stage where they were ready to apply because they:
Moreover, these business operators are so busy that it is difficult for them, acting alone, to find answers for such questions. The BTC’s response was to try to make things easier for them:
The BTC has also developed a successful newspaper
advertising program. We are doing niche and coop ads where the BTC entrepreneurs
the ads -- making it easier for the merchants to participate --and pays for 50%
of the ads, which correspondingly lowers the advertising costs of participating
merchants. Eight of nine jewelry shops, for example, signed up for the Valentine’s
Day jewelry niche ad. Fathers Day advertising efforts are notoriously
difficult, but we were able to get 18 district businesses signed on for our
coop Fathers Day ad. A big coop ad at Christmas is anticipated. The Bayonne
Urban Enterprise Zone has agreed to provide $9,000 in this new fiscal year for
more niche and coop ads. This can be leveraged into an advertising effort worth
at least $18,000.
There are certainly many other elements to a successful membership buy-in strategy. Two of the most frequently mentioned are good two-way communications between the organization and its members and effective membership participation in the program planning process. Nevertheless, incentives can also be an effective element. It is a mistake to think about incentives solely in financial terms. Actions the downtown organization can take to make it easier for its members to participate in such programs as façade improvements and media advertising can be as or even more effective.
Retail Raptors and Raptor Niches©
By
DANTH, Inc.
An edited version of this article appeared in the
In a world full of Wal-Marts, Targets, Home Depots, Lowe’s,
power centers and super regional shopping malls, downtowns need strong and
aggressive retailers, not the meek retailers who fear competition. Recruitment
efforts, consequently, need to focus on more than just filling vacancies; they
need to target “retail raptors,” the merchants, large and small, who are not
afraid to compete for and win market share. Unfortunately, the very way that
many downtown organizations plan their recruitment efforts diverts them from
looking for retail raptors.
For decades, downtown managers have been taught that an
effective retail revitalization strategy must be based on a type of market
research that goes by various names, e.g., gap analysis, out-shopping, or
retail leakage. The basic goal of such studies is to identify the difference
between the supply and demand for retail goods in a particular trade area.
Demand is usually operationalized by measures of consumer expenditure
potentials, while supply is normally represented by measures of retail sales. A
gap (or leakage) exists when demand exceeds local supply. Recruitment efforts
then are focused on attracting retailers who can fill the gap by “recapturing”
local retail expenditures.
The unstated assumption on which this analysis is based is
that it is easier for retailers to win “gap” expenditure dollars than non-gap
dollars. Implicit in this assumption is that the gap filling retailers really
will not have to fight too hard to win back this market share. Telling retail
prospects that they can fill a gap is tantamount to telling them that they can,
without too much effort or skill, easily succeed in your downtown. This
increases the probability that meek retailers will be recruited to plug the
retail gap: after all, the strong ones are not really needed and the meek will
be easier to recruit.
Out in the real world, there are many successful retailers
who could care less about retail gaps, leakages or outshoppers because they are
prepared to fight for -- and win -- market share. They can range in size from
mom and pop independents to large chains. These raptors certainly are not
mindless -- they really know who their customers are and what merchandise and
services they want. They usually are extraordinarily good at this and they
often invest substantial amounts of money to research this subject. The raptors
will look closely at demographic and psychographic data to see if a trade area
has their kind of customer. They are not too worried about the competition
because they are confident, based on experiences in other markets, that if
there are enough of their type of customers in the trade area, they can win
enough market share for their new store to make lots of money. For example,
Starbucks wants to know how many people in a market area will be willing to
spend $3.00+ for a cup of coffee and views other coffee houses as market
builders, not threatening competitors. Does anyone really think that Wal-Mart
really cares about gaps or retail leakages? Wal-Mart is criticized precisely
because it is the quintessential retail raptor -- it will come in and grab an
enormous market share whether or not a gap exists.
A traditional gap analysis can point out opportunities to
create new retail niches, but will totally overlook the opportunities to create
raptor retail niches out of strong existing downtown niches. For example, my
firm DANTH, Inc. recently did an economic development strategy for a very
attractive suburban community in NJ. A prior study had noted that in the home
furnishings area there was a sales surplus within the township -- local
merchants had more sales than local residents were spending for home
furnishings products. The prior study, producing a typical conclusion for a gap
analysis, saw no growth opportunity in home furnishings since there was no gap.
DANTH, to the contrary, saw home furnishings as a strong existing niche that
could expand its trade area and win a small, but significant share in a far
larger market area in which over $260 million is spent annually on household
furniture and equipment.
In fact, the ultimate goal behind a niche-based retail
revitalization strategy is to create such raptor niches, those that can win
market share in larger market areas. Moreover, in our experience, it is far
easier to take a fairly strong existing niche and make it grow by expanding
into new markets than it is to create a totally new retail niche.
I have done many gap analyses. I am certain that I will do
many more of them in the years to come. They can make insightful contributions
to a productive research effort on which a sound retail recruitment or retail
redevelopment strategy can be based. But, they should not be the sole analytical
effort. Downtown managers must also be able to identify, through relevant
research, opportunities to attract individual retail raptors and to develop
raptor retail niches.
Nail, hair and skin salons:
bane or boon?
By N. David Milder
DANTH, Inc.
Published in the
Downtown Idea Exchange,
Downtowns frequently complain that they are being overrun by nail, hair and skin salons as well as other personal service operations such as fitness centers and spas. For many years I, too, viewed clusters of these personal service operations as indicators of a weak downtown retail base and an eroding environment for pedestrians. Today, I have a much more nuanced view of “salons” and other personal service operations. In some downtowns these operations may pose considerable challenges, but in others they can be real assets worth nurturing. Let’s examine typical fears about these sorts of businesses, and the rationale for a reassessment.
Why salons are often feared as a bane
Opposition to personal service operations, especially salons, can be intense and sometimes provoke local government actions to constrain their growth. For example, elected officials in Nutley, NJ (pop. 27,360), and Maplewood, NJ (pop. 23,870), recently have passed ordinances prohibiting nail salons from being within 500 feet of each other — a zoning tactic used in other communities to disperse porn shops.
Opposition to salons and other personal service operations are frequently based on the fear that they:
· Reduce the number of retail venues and diminish the merchandise selection that the downtown can offer to shoppers. In some districts their growth does force out shops offering comparison shoppers goods, leaving the retailing to convenience operations, which indeed weakens the downtown.
· Inhibit window-shopping and strolling by downtown visitors because their windows lack merchandise and are thus deemed not interesting to look at (more on this later).
· Are willing to pay high rents and thereby make it more expensive for new retailers to enter the district and existing retailers to renew their leases
Why salons should be seen as an asset
While vacationing in Beverly Hills, CA (pop. 33,780), a few years ago, my wife Laura — knowing of my then low-regard for personal service operations — pointed out how many hair, nail and skin salons as well as spas and gyms we had seen as we strolled the downtown area. We did a quick count and stopped at 35. Discussions with relatives and friends who live in California evoked knowing smiles. These establishments, they said, were key elements in the way that Beverly Hills operates. The wealthy like shopping, but love having their bodies pampered. And shopping and pampering often go together. I concluded that if the personal services were such an asset in such a chic district as Beverly Hills, then I should reconsider my attitude towards these operations. Here is what my reassessment brought to light:
· The unique strength that downtowns can have is their ability to generate large numbers of multipurpose trips. Financial, insurance and real estate services have long been key assets in many downtowns, be they small or large. But personal service operations, such as the salons of famous hair stylists, skin salons and spas also have long been important attractions in some of the greatest American and European downtowns.
· This appears also to be happening in much smaller, less glamorous, and lower profile downtowns as well. For example, an Elizabeth Arden Red Door Spa will be anchoring a major new redevelopment project in Cranford, NJ (pop 22,580). In the Bayonne Town Center, Bayonne, NJ (pop 61,840), a “pamper niche” containing 33 businesses based on gyms, spas, hair salons and nail salons draws lots of people to the Town Center from Bayonne and beyond.
· Nationally, the demand for such personal services has seen very strong growth. According to the U.S. Census Bureau, between 1997 and 2002, revenues from hair, nail and skin care services jumped by 42 percent nationwide. Revenues from "other personal services" increased 74 percent over the same time period. Meanwhile, retail revenues have been stagnant at best. Downtown leaders would be crazy to ignore such a growing market opportunity.
· Personal service operations usually have much smaller market areas than comparison retailers. The latter can be in another town and still capture the same shoppers, but the salons and spas usually need to be in or near a downtown to tap their customers.
· Many downtowns have few income-producing residential units above their retail-prone commercial spaces. In others, such residential units are rent controlled. This means that landlords must rely on their retail spaces to obtain their desired revenues. This creates a pressure for high commercial rents. Quality retailers can easily find competitive locations to suit them and so rarely pay high rents. The personal services have fewer locational options, so they are more likely to pay the higher rents.
· A hemorrhage of comparison retailers is a serious problem that requires strong intervention. If this is happening downtown, it’s not because nail salons crowded them out. And while a zoning response may limit or prevent nail salons, it still allows other service operations such as hair salons and real estate offices to open. Often, the underlying problems are more structural and their resolution involves ways of providing more income for landlords, e.g., by removing rent controls or providing incentives to create revenue -generating above the store residential units.
· Many districts find themselves with an over supply of retail-prone commercial spaces that is in poor condition and difficult to rent to quality retailers. Much of this poor quality space also cannot be supported by local consumer retail spending power. In such instances, the entry of personal service operations can function to lower the overall vacancy rate and generate foot traffic.
· While personal service operations may not offer merchandise in their windows, they often can provide great “informal entertainment” attractions: people in motion behind the windows, getting pampered, working out, kids demonstrating discipline and grace in the martial arts or ballet. These establishments can be real assets as downtowns rely increasingly on entertainment.
· Salons and barber shops are often key social institutions, where people gather to socialize and gossip as much as to have their bodies pampered. In many traditional downtown area neighborhoods, the best way to distribute a newsletter or flier is to leave it in the hair salons. Such operations can help a downtown establish itself as the community’s “central social district.”
What to do?
Knee jerk opposition is wrong. Each instance in which personal services exhibit strong growth must be closely examined, as they are often unique. Often, a profusion of salons and other personal services can be a real traffic generator and a strong downtown asset. In other instances, they can be a symptom of tough underlying problems relating to property ownership and retailing. In such cases, it is important to respond to the causal factors and not just their symptoms.