Why you must consider the regional retail landscape

If your competitors are changing, growing, and improving, then you have to do the same, just to stay in the same place. I find in the city that the average retailer located in a neighborhood commercial district is under-focused on creating a destination business, on providing reasons for people to visit his/her store. Few neighborhoods have enough population to successfully support a business without that business having to appeal to customers from outside the neighborhood.

I find it aggravating that suburban developers understand the value of recreating the "urban experience" in a way that is safe and easily consumed, without having to be in the city. Meanwhile developers in the city ignore the value and qualities of the urban setting and neighborhood commercial districts.

This is reprinted from the August edition of George Whalin's Retail Management Letter:

Inventing a Downtown that Never Was!

With developers building fewer enclosed regional malls in recent years, lifestyle shopping centers have become the growth engine for the shopping center business. Recently I had the opportunity to spend some time in a lifestyle shopping center that was designed to replicate the downtown shopping districts of the past. The developers, Forest City Enterprises, created a faux downtown atmosphere attempting to make the entire area feel as though it had been built many years ago.

Opened with great fanfare in November 2004, located in Rancho Cucamonga, approximately 50 miles east of Los Angeles in an area known as the Inland Empire. For years, the area was hardly an Empire, with narrow roads, a few scrubby trees, some desert, and a sparse population. Recently, Rancho Cucamonga and its surrounding communities have exploded in growth with a proliferation of freeways, homes, and lots of people. According to the 2000 Census, the population of San Bernardino County was just over 1.7 million. Through the first years of the new decade, the area continued to grow. This massive growth provided major opportunities for shopping center operators and retailers.

Located just off Foothill Boulevard (the old Route 66), Victoria Gardens is a 1.4-million-square-foot, open-air shopping complex spread over 12 square blocks. It is surrounded by apartment buildings, parking lots, and space for future condominium and townhouse development.

One of the ingredients for success in any shopping center is the mix of stores. Unfortunately the Victoria Gardens store mix offers little to distinguish it from dozens of other Southern California shopping centers. Let's see, there's a JC Penney, two Macy's, The Gap, Coldwater Creek, GUESS?, Victoria's Secret, Eddie Bauer, and American Eagle Outfitters. There's a Coach store, Gymboree, Ben Bridge Jewelers, Bath & Body Works, Champs Sports, Stride Rite, Pottery Barn, Williams-Sonoma, and a Hallmark Gold Crown store. Nothing unusual, but 150-plus well-known stores give customers plenty of choices.

Why two Macy's? The Macy's purchase of May Department Stores was not long after Robinson-May opened in this center. It's been reported that Macy's unsuccessful attempt to sell the May location required them to adhere to provisions of the lease and continue operating the space as a department store. The duplication does cause confusion among some visitors.

Victoria Gardens does host a better-than-average selection of restaurants. The Cheesecake Factory, Fleming's Steakhouse, P.F. Chang's, T.G.I Friday's, and Yard House operate along with a food hall with ten quick-and-easy meal establishments including Ben & Jerry's, Hot Dog on a Stick, and Panda Express. And finally, the 12-screen AMC movie theatre helps make this an entertainment-oriented destination.

The goal of the developer was to create the atmosphere of a small, old-time downtown. So here and there, you'll find a number of signs representing the kinds of independent merchants you might find in such a place. Some might consider these signs a nice touch, but in fact the store mix includes less than five independent or locally owned establishments. There's a hotel sign but no hotel. I believe the signs fail to achieve the feeling the developers wanted.

In an effort to make this a destination for everyone in the community, a cultural center was added that includes a branch library, playhouse for local theatre productions, and celebration hall rented out for birthday parties and other special occasions. A very nice center courtyard provides a place for kids to play and others to sit, relax, and enjoy the warm California days.

With attractive tree-lined streets, plenty of parking, lots of places to sit and relax, music playing inside and out, and a well-laid-out shopping, eating, and entertainment environment, Victoria Gardens attracts a good crowd. This is in spite of the less-than-innovative mix of stores.

Like most major shopping centers, Victoria Gardens is now surrounded by smaller strip centers and such destination-type stores as Sears Grand, REI, and a 180,000-square foot Outdoor World opened by Bass Pro Shops in July. Outdoor World stores (now numbering 43 throughout the U.S. and Canada) typically attract as many as 90,000 visitors annually making them a very popular tourist destination and give another boost in traffic to the area.

With the success of Victoria Gardens, there's little doubt we'll see similar lifestyle centers springing up around the country. I do hope in future projects, developers take a closer look at the tenant mix and include a number of smaller, innovative retailers to add some spice to the mix. And if they can't create a legitimate facsimile of old-time shopping, I suggest they abandon the tacky signage.

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