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Visitors to Williamsburg, Virginia, the historic town dating back to the Colonial era, can walk in the footsteps of the country’s forefathers, shop at the general store, and eat at a restored tavern. But only a few minutes away are several fast-food establishments, a lifestyle center, and an outlet mall.
It just goes to show that no matter the century, there has always been a need for community-minded locations to drive local traffic.
“Retail provides a sense of a place that gets people out of their house to come out for shopping and gathering,” said Lacy Beasley, president of Retail Strategies, an advisory firm that destinations employ to help spur business development.
Despite technological advances that allow consumers to shop at a moment’s notice from their device, brick-and-mortar establishments remain invaluable to communities and brands trying to build shopping bases.
Rumors of the death of the shopping mall are greatly exaggerated, according to Beasley. While some retail centers have closed and notable chains have filed for bankruptcy, brick-and-mortar stores are not disappearing. However, they are evolving and, in doing so, shaping the future of communities, particularly those with populations under 50,000.
Millennials and younger generations consume information differently than their predecessors. Many don’t recall a world without smartphones, all-encompassing tools in almost all of our lives.
Having constant access to the internet, email, and social media channels has made Millenials and Gen Z particularly valuable customers for tech-savvy brands. However, research shows that just because these consumers can buy clothes or do their grocery shopping online doesn’t mean they do so.
Recent research shows that e-commerce accounts for only about 16 percent of total retail sales. This strongly suggests that while shoppers use internet searches, social media, and celebrity recommendations to research brands and services, consumers still value tactile experiences that only in-person shopping can bring.
More often than not, consumers want to choose their own produce, test the feel of a chair, or see for themselves whether a sweater or shoes fit. As a result, it is incumbent on retail brands to employ an omnichannel approach that entices shoppers with digital campaigns but relies upon the in-store experience.
This pattern presents opportunities for municipalities, many of which depend heavily on retail sales tax collections. But there are challenges as well.
Traditional shopping malls are struggling in mid-sized and smaller communities, in part, because the rent structure is prohibitive to making a profit. Locations with outdoor-facing doors that don’t require walking past the competition and are visible from streets and highways are considered more desirable. The traditional mall structure has become less of a draw for future tenants.
“The retailer just wants to go where they can be most profitable,” Beasley said.
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Vacancies at new construction sites may be noticeable to community members, but they do not tell the whole story. In fact, the number of store openings is outpacing closures, according to Beasley.
Brands are using digital-first strategies, like offering rewards for downloading and using mobile apps for ordering, to drive foot traffic to physical locations. Known as the “halo effect,” a brand’s online sales in the area increase by 6.9 percent when a brick-and-mortar store opens. Conversely, closures of physical stores result in an 11.5 percent decrease in online sales.
With retailers eager to maintain or expand their physical presence, forward-thinking communities can attract nationally known brands. Beasley explained that the presence of one popular location can benefit several others, as well as the host community.
Image Source: Adobe Stock
“Retail would rather be in the parking lot of their competition than on the opposite end of town,” she said. “The more retail synergy you have, the more it grows your retail trade area. So people are more likely to come in and shop in your community.”
Beasley points to the example of Maryville, Missouri, a community of 10,633 that worked with her company to enhance their presence among potential retail partners. Despite their size, Retail Solutions helped the city bring Starbucks to the area. The draw, in part, was the presence of Northwest Missouri State University, which expanded the potential profit margin. The school has over 9,000 enrolled students and is responsible for much more traffic.
Soon after Starbucks came to fruition, Maryville scored another major victory by luring Marshall’s, which filled the vacancy left by a JCPenney, providing the community access to popular brand clothing at affordable prices.
“They have new tax revenue and new quality of life,” Beasley said of Maryville.
Communities looking to spur growth must start with doing their research, Beasley advised. Key information points include knowing the demographics of your city and the surrounding area and understanding who your communities’ store owners are. That way, local officials can identify promising locations to fill vacancies and drive business.
Armed with key data points, civic leaders can tell their story to thriving brands – like Ulta, TJ Maxx, and Five Below – to convince them to open a brick-and-mortar store.
Referring back to Williamsburg, Beasley stressed the value that vibrant shops add to destinations. “Since the beginning of developing communities, retail has been at the heart of it all.”
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