Developing A Winning Retail Strategy

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Developing A Winning Retail Strategy
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Connecting Communities to Retail
Development

• It is increasingly complex and challenging
• for communities and retailers alike to
• explore, initiate and structure
• relationships yielding the successful
• results they both want and need

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ICSC Same-Store Sales
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Rising Vacancies
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Declining Rents
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Challenges Facing Communities

• Paradigm shift in retail real estate industry
• Retail crisis resulting in dramatic loss of tax
  revenue
• Budget shortfalls constrains communities ability
  to invest and reinvest in retail
• Store closings, bankruptcies liquidations
  rapidly rising
• Projects are stalled, even at a standstill
• Major demographic shifts
• Retailer push back

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Building a Sustainable Retail Base

• Fundamentals of retail real estate development
  paramount
• Pursue a market based approach to retail
  attraction
• Determine what your community can support
• Package information to create a powerful
  competitive position
• Garner political will and local support
• Collaborate with local industry leaders
• Develop relevant tools and incentives to support
  existing and new retailers

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Where to Begin

• Collect basic economic data about your specific
  geographic market - get from your city
  demographer, or large brokerage firm to determine
  potential retail demand
• Create a vision for the retail area, work with a
  retail professional/consultant to confirm to
  create a merchandise mix and implementation
  strategy
• Identify key retail street/area, collect retail
  square footage numbers - net rentable sq.
  footage, lease information, build a database with
  contact information, photos, etc.
• Create simple marketing materials to support
  findings and help sell the vision to owners and
  potential retail clients
• Begin recruiting retailers who fit the mix

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How to Create a CollectiveRetail Vision

• Understand your market, create your story
• Create a strategy for retail- what do you want
  and how will you get there
• Meet one on one with every property owner to help
  sell the vision and get buy-in
• Work to collect information on every
  property/lease hold information
• Educate, communicate and market the vision to get
  community/policy leader buy-in

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The Market Based Approach

• Effectively Use Data and Information to Build a
  Market Based Approach
• Determine what your community can realistically
  support.
• Package information to create a powerful
  competitive position and keep it current and
  accessible
• Track retail and market trends

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Manage Expectations
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Retail Site Selection Factors

• Traditional
• Three primary factors
• Demographics
• Income levels (household and disposable)
• Competition
•  
• Secondary
• Market segmentation
• Traffic patterns and travel times
• Daytime population and available and affordable
  workforce
• Cost of land
• Tax burden

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Site Selection

• Unexpected Real Estate Barometers
• Urban - transit oriented development
• Gentrification
• High density areas
• Aging populations
• Overlapping markets -
• Walkable environments
• Minority populations
• Women the mom factor

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The Retail Strategy

• Prioritize retail targets by sector
• Prioritize sites and nodes based on probability
  for success
• Identify specific retailers to pursue based on
  demand and retailers needs and growth objectives
• Brand marketing concepts, messages, tools
• Proactive measures and actions to enhance market
  awareness, interest, and relationships
• Allocate resources to support retail attraction,
  investment, and retention

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Build Your Brand

• A Brand
• Helps determine perception of the community
• Can move a community from old industry to
  new?
• - Michael Porter says we can
  (Competitive Strategy 1980)
• Can re-position the conversation about your
  community over time
• Branding needs to become part of the ongoing
  dialogue with PR, community relations, growth,
  and acquisitions

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Build Your Brand
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Competition among cities is like riding a
bicycle if you dont pedal, youll fall off.
The City of Brotherly Love"
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Rethinking Retail
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Retention vs. Attraction
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Recruitment vs. Retention

• Recruitment
• Actively and systematically recruit new prospects
  to ensure leads in the pipeline
• Create a strong story - from market demographics
  to the retail vision
• Create tools for your retail
• toolbox
• Hand holding nurturing
• Measure your success
• Retention
• Knowing what is going on - how your current
  retailers are doing,
• Business assistance and education programs

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Tools Incentives

• Tax abatements and rate reductions/deferments
• Rent subsidies
• Loan programs, grants for operations
  improvements
• Tax Increment Financing
• Façade and infrastructure improvement programs
• Retail and business training
• Coordinated buying and marketing initiatives
• Strategic merchandising planning
• Tax holidays and free parking

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Retail Attraction Toolkit

• Retail marketing and attraction strategies
  utilizing traditional and nontraditional tools
• Implementation Programs                      
  Policies, programs  and incentives
• Site inventories                       
              Project profiles
• Comprehensive editorial coverage           
  Advertising and direct mail campaigns
• Interactive Websites and portals General
  marketing  and project brochures
• Social networking                        
            GIS mapping customer profiling,
• Database Management Plotting             
  Customized tradeshow booths 
  marketing        
• Custom mapping
• Demographic reports that demonstrate market
  strength and potential and showcase consumer
  preferences (standard reports, expenditure
  reports, graphic profiles and psychographic
  analysis)
• Competitive analysis that shows how sites and
  communities compare to others

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Innovative Uses of Space

• Service oriented retail
• Civic uses
• Social services
• Medical facilities
• Commercial tenants
• Educational facilities
• Non-profit organizations

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Animate The Street
Pop Up retail Short term leases Retail
incubators Art Exhibits Storefront advertising
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Best Practices for Success

• Strengthen data collection, organization, and
  accessibility
• Develop and maintain inventory of available sites
• Strengthen presence in the national marketplace
• Collaborate with transactional professionals
• Establish protocols for marketing new retail
• Create case studies documenting retail successes
• Develop an arsenal of retail-oriented marketing
  tools and information

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Be Optimistic

• Overzealous markets are correcting
• New models are emerging
• Greater focus on green retail
• Entrepreneurs increase in downturns
• Strengthen relationships with investors,
  retailers, and owners
• Fine tune your business model