Now is the Time for Cities to Plan Their Retail Future
Written by
Rickey Hayes
Retail Attractions, LLC
Even casual observers of the news media can’t help but notice the coverage on the retail industry over the last few months. Scores of national retailers have announced bankruptcy in 2008 and 2009. Retailers who were growing aggressively only a few months ago have stopped looking for new sites and are re-evaluating growth plans for the 2010-2011 development cycles. Unfortunately, the consensus among industry leaders is that it is not over yet. However, many in the retail and development communities understand the cyclic nature of their industry, and are quietly planning growth strategies for the future.
So what does this mean for a city trying to recruit retail in order to boost over-all quality of life and generate much needed sales tax revenue?
It means growing cities must understand the basics of retail development and how to pro-actively position themselves at the top of the list for when future retail growth opportunities present themselves. One of the first things a community can do is to analyze and verify their true Trade Area; once the consumers in that trade area are identified, specific sets of information must be communicated to the retail world. In the past, a “concentric ring” approach was used to determine the strength of a retail market. For many cities, a one, three, or five mile radius does not even begin to accurately describe their retail market and potential draw. Cities should be aggressive in defining and marketing their retail potential to site selectors, retailers/restaurants, and brokers.
Even in the current economy, many retailers and restaurants are still expanding, and working to fill their real estate pipeline for 2010, 2011 and 2012. But they are also paying special attention to their real estate decisions. National retailers are prioritizing their investments and picking markets where the best return is available. Fewer deals mean more competition and cities must be their own advocates to the retail marketplace.
To land new retail in your community, you need to be providing the right information. Things to include in your marketing strategies are:
• Clearly define and verify your trade area using third-party data
• Be able to identify and describe the consumers within your trade area
• Provide the most current demographics and psychographics to specific retailers you are targeting
• Realize the retail potential within your community
• Analyze leakage and then target retailers who could fill the missing niches
Retail Attractions, LLC provides its client cities with valuable data and strategies to harness their full retail potential. Communities that are aggressive in marketing themselves to the retail world will be strategically set when the economy begins to strengthen.
how often to you recommend new demographics? And for overall budget, is there a formula for how much or a % of what we should start planning to use for our growth?
we are a small but growing town in tx…
Hey Steve,
You want to keep all your data absolutely as fresh and up to date as possible, as for your budget I believe that you reap what you sow in terms of investing into your retail future…the more you invest the better the return.
Steve, don’t let the data be more than 6 months old for volatile indicators or more than a year old for more stable numbers. If you’re growing quickly, update more frequently. It’s a hard time right now, so close to the new census. Most data is based on extrapolations from the previous census. One thing we do for our clients (disclosure, here >> I often work with Retail Attractions clients on the data aspects of their needs, through Rickey) is get them on “human review” lists for demographic updates rather than depending on the algorithms. The faster you have been growing, the more of a margin for error there can be in extrapolated numbers.